TAX EVASION THEORETICAL ANALYSIS

Tax evasion not only erodes public revenues. It also undermines strategic objectives in terms of equality and social cohesion breaking with the horizontal and vertical equity that characterize a good tax system in addition to causing distortions in economic growth due to the generation of externalities and unfair competition that this phenomenon entails. This situation justifies the measurement of this phenomenon for two very important reasons: First because of the possibility that exists to achieve improvements in the quality of the design of the Tax policy aimed at creating a system that guarantees a minimum level of social welfare; and second because it constitutes an indicator that can be used strategically in the decisions made by the Tax Administration.