An econometric analysis of the underground economy and  tax evasion in Kuwait

Awadh Ahmed Mohammed Gamal

QR Code Link :
Type :	article
Subject :	HB Economic Theory
Main Author :	Awadh Ahmed Mohammed Gamal
Additional Authors :	Jauhari Dahalan K. Kuperan Viswanathan
Title :	An econometric analysis of the underground economy and tax evasion in Kuwait

Place of Production :	Tanjong Malim
Publisher :	Fakulti Pengurusan dan Ekonomi
Year of Publication :	2020
Corporate Name :	Universiti Pendidikan Sultan Idris

Abstract : Universiti Pendidikan Sultan Idris

Up to now, no individual study on Kuwait with respect to the underground economy and tax evasion has been conducted using the recent adjusted form of currency demand function model (CDFM) before. This paper estimates the size of underground economy behind tax evasion from 1991: Q1 to 2010: Q4. It applies the Zivot-Andrews (ZA) procedure for the stationarity analysis, and Gregory-Hansen (GH) long run cointegrating technique for estimating the underground economy based on the adjusted currency demand function approach. While the general-to-specific technique is used to estimate the short-run error correction model. Toda-Yamamoto test is also used to explore the causal relationship between the underground economy and the non-oil tax revenues' variable. It finds that the averaged sizes of the underground economy and the tax evasion to the official gross domestic product (GDP) in Kuwait constituted about 24.95%, and 2.83% respectively.

This material may be protected under Copyright Act which governs the making of photocopies or reproductions of copyrighted materials.
You may use the digitized material for private study, scholarship, or research.

Back to previous page