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Volume Issue
Volume-3,Issue-7  ( Jul, 2017 )
Paper Title
Tax Evasion and Economic Growth: Evidence From Mauritius
Author Name
Bhavish Jugurnath, Hema Soondrum, Akshay Seedoyal, Himanshu Kisto
Faculty of Law and Management, University of Mauritius, Mauritius
Taxation is a very crucial lifeline of a government towards the development of an economy. Tax evasion on the other-hand is the illicit act of not paying taxes which as a consequence impacts government expenditure and ultimately impacts the economic growth. So, eventually the aim of this paper is to analyse the impact of tax evasion on the economic growth of Mauritius given that tax evasion now represents a third of the entire global financial income. Basically, it was found that tax evasion was fuelled by factors such high tax rates, trust in the government, measures and regulations that are too neglectful but most important of all it affects the economy of a country at large. In this study, the determinants were scrutinised through the relationship of different factorsmentioned above with regards to tax evasion. Hypothesis testing and factor analysis were used to determine to what extent each and every determinants were interrelated. As a result it was found that high tax rates, trust in the government and regulations had a direct relationship with respect to tax evasion. It was also tested that more stringent and rigid government measures impacts directly behaviours vis-a-vis tax evasion. It is also worth noting that government along with the Mauritius Revenue Authority should implement awareness campaign through regular seminars about the consequences and sanctions against tax evasion. Keywords: Tax Evasion, Economic growth, Hypothesis testing
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