Taxation Commons^™

To advance understanding of the reasons for informal sector entrepreneurship, this article evaluates the determinants of

cross-country variations in the extent to which enterprises are unregistered when they start operating. Reporting the

World Bank Enterprise Survey data on 67,515 enterprises across 142 countries, the finding is that one in five (19.9%) of

the formal enterprises surveyed started-up unregistered, although this varies from all enterprises surveyed in some

countries (e.g. Pakistan) to 1% of surveyed enterprises in Slovakia. To explain these cross-country variations, four

competing theories are evaluated which variously assert that nonregistration is determined by either: economic

under-development and poorer …

1.          Introduction

2.          Rationales for a preventative approach

Responses were received from 45 authorities with responsibilities for tackling undeclared work in 25 Member States (MS), most of whom were labour inspectorates or Ministries of Labour. The issues covered: obstacles to tackling undeclared work at the cross-border and national levels; the use of bilateral and multilateral agreements, and the use of complaint reporting tools in Member States