1, Galina Ulian2, Rodica Elena Faida3
Abstract: State budget is considered to be the instrument of achieving social and economic objectives, with
the ability to mediate its subsidies and tax incentives. Lack of funds, which are part of budget income, leads
to incapacity of achieving the state duties, and th is is the result of taxpayers avoiding to pay taxes. The need
for delimitation between unlawful and lawful tax avoidance makes it useful to estimate the size of the
phenomenon on its two forms of expression and raise awareness among political and administrative decision
makers, in order to search and determine appropriate methods to limit and combat the phenomenon.
Keywords: tax evasion; tax law; corruption
JEL Classification: E26; K42
The most frequently used definition of tax evasion is “the a rt of avoiding to fall into the attr action
field of tax law” (Hoanta, 1997, p. 218). From this interpretation, tax evasion is, in most cases,
compared to fraud. Because of this interpretation, the state loses its blameworthy characteristic,
enabling its taxpayers to escape paying taxes.
2. Fraud and Tax Evasion
Fraud and tax evasion are considered to be means to dodge in front of excessive fiscal pressure.
Among the main forms of evasion used in various countries we can include: benefits in kind (company
car, generous allowances) that are provided by employers to their employees to reduce their tax bases
and implicit taxes. Tax fraud is the fraudulent various processes that can reduce income or benefits.
Tax evasion is largely linked to countries with favorable tax and social legislation. It also encouraged
the creation of free zones. Free zones are territorial enclaves which have extraterritoriality customs as
benefit and escape totally or partially, by national laws.
Tax evasion covers all categories of economic agents: firms, public or private administrations, and
refers to a very broad range of issues, covering both general issues and specific components. Due to
the existence of tax evasion, there will be a direct and necessary decrease of state revenues. As a
consequence of reduction in state revenues, there will be a lower state budget, which can not cover the
1 Assistant P rofessor, PhD Student, Tomis University, Constanta, Romania, Address: 100 Vulcan Petru Str., Constanta,
900628, Romania, Tel.: 40.241 558 700, Corresponding author: firstname.lastname@example.org.
2 P rofessor, PhD, State University of Moldova, Republic of Moldova, Address: 60 Alexei Mateevici Str., Chisinau 2009,
Republic of Moldova, Tel.: +373 22 577 401, E-mail: email@example.com
3 Master Student, Spiru Haret University, Bucharest, Romania. Address: 13, Doamnei Str., Bucharest, Romania, Tel.: +4021
455 1000, E-mail: firstname.lastname@example.org.