Abstract:

The aim of this article is to measure the volume of the shadow economy in Turkey and reveal the tax evasion. In the analyses made on the money demand model used by Tanzi (1980, 1983), the size of the informal economy was estimated through the model used. The unregistered volume and trend in Turkey were estimated with the ARDL model based on quarterly data between 2005 and 2023. The dimensions of the informal economy were revealed from the findings obtained with the help of the model. Possible tax loss was estimated based on the estimated size of the unregistered economy. According to findings, informality was estimated to vary between 16% and 68% compared to national income in 71 quarters between 2006 and 2023. The informal economy, which entered a decreasing trend after 2015, is estimated to be 16% in 2023.There is a tax loss ranging between 3% and 11% as depending on the size of the shadow economy. The findings obtained are compatible with national and international studies on Türkiye.

Keywords: