TITLE:
Fiscal Policy and the Informal Sector in Developing Countries: The Case of Gabon
AUTHORS:
Medard Mengue Bidzo
KEYWORDS:
Informal Sector, Taxation, Gabonese Economy, Regime Change Model, TAR, Tax Rate Threshold
JOURNAL NAME:
Modern Economy,
Vol.10 No.7,
July
26,
2019
ABSTRACT: Tax pressure is pointed out as one of the main
causes for the development of informality. To the extent that the informal
economy is perceived, inter alia, as a response to excessive and inappropriate
public regulation. The purpose of our study is mainly to verify such a
relationship in the context of the Gabonese economy thanks to the estimation of
a model with changes of regimes of the individual time series at the Hansen [1]. Overall,
the impact of tax repression on the informal economy differs depending on the
level of the tax rate. In other words, there are two growth regimes in the
informal sector conditional on a tax threshold of 7.10%.