Giraev, V. K. The Model for Evaluating Efficiency of Applying Independent Criteria to Evaluating Tax Risks in the Shadow Business Sector

Abstract: In the present article the subject under review is the shadow entrepreneurial activity performed by organizations with the high level of tax risk. Special attention is paid to the reasons of taxpayers leaving for the shadow sector of economic activity. It is noted that taxpayers do that because they want to receive the profits that are usually expected in this sphere. Generally speaking, application of Independent criteria to evaluating tax risks, as developed by the Federal Tax Service of Russia, is aimed against shadow economic activity and has the purpose of determining patterns of tax evasion. In order to evaluate efficiency of applied Independent criteria, the author of the article introduces the term ‘risk zone’ and offers a mathematical economic model to evaluate expected revenues of organizations in this risk zone. The aforesaid model allows to define the main directions for reducing the earning capacities of organizations that perform their activity in the risk zone. The author also analyzes the main reasons why taxpayers leave for the shadow sector. The main reasons include the high tax burden and low efficiency of tax authorities. The author also offers the model for quantitative evaluation of the total tax burden depending on types of production. He also offers a particular action plan on selecting the best strategy for collection of arrears by tax authorities.

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