Tax evasion, corruption and COVID-19 health risk exposure: a cross country analysis

PurposeThe purpose of this study is to examine the relationship between tax evasion and COVID-19 public health risk exposure in both high-corruption countries and low-corruption countries.Design/methodology/approachThis study uses cross-sectional data from 138 countries. Tax evasion is measured usin...

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Bibliographic Details
Published in:Journal of financial crime 2021-09, Vol.28 (4), p.995-1007
Main Author: Yamen, Ahmed Emadeldin
Format: Article
Language:English
Subjects:
Coronaviruses
Corruption
COVID-19
Criminal statistics
Dependent variables
Economic development
Economic growth
GDP
Gross Domestic Product
Health care expenditures
Health risk assessment
Health risks
Hypotheses
Informal economy
Macroeconomics
Medical research
Pandemics
Population
Public health
Research design
Risk exposure
Tax evasion
Variables
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Summary:PurposeThe purpose of this study is to examine the relationship between tax evasion and COVID-19 public health risk exposure in both high-corruption countries and low-corruption countries.Design/methodology/approachThis study uses cross-sectional data from 138 countries. Tax evasion is measured using the shadow economy size (light intensity approach) as calculated by (Medina and Schneider, 2018). The SolAbility COVID-19 public health risk exposure index (CPHRE) is used to measure COVID-19 health risk. Also, the corruption perception index from transparency international is used for measuring the level of corruption.FindingsThis study finds that the level of tax evasion is positively related to CPHRE. Also, the results revealed a positive relationship between corruption and CPHRE. Furthermore, this study examined the moderation effect of corruption. The results indicate that the positive relationship between tax evasion and public health risk exposure is significant in low-corruption countries, but it is insignificant in high-corruption countries. These results imply that the severity of corruption can increase COVID-19 health risk exposure more than tax evasion.Practical implicationsOur findings are alerting the policymakers for the negative noneconomic consequences of tax evasion and corruption. It provides evidence that tax evasion and corruption can increase CPHRE.Originality/valueAccording to the author’s knowledge, this is the first study that examines the relationship between tax evasion and COVID-19 risk and that tests the moderation effect of corruption.
ISSN:1359-0790
1758-7239
DOI:10.1108/JFC-10-2020-0220