engleski

Croatian balance of payments implications of net errors and omissions for economic policy

In Croatia, as well as in other tourist countries, a large portion of economic activity in tourism takes place in the shadow economy, i.e. unofficial economy. This paper tries to evaluate the size of unreported income from tourism, or more precisely, from foreign tourists, in a somewhat different way. The conclusions make reference to large amounts of unrecorded accumulation of foreign cash from foreign tourist spending. It seems likely that this accumulation is largely related to shadow economy in tourism, i.e. to unreported – and therefore untaxed – income from foreign tourists. The government has devoted much effort to preparing a successful tourist season in this economically difficult year. However, exactly the difficult times, i.e. the economic crisis and lower government revenues should provide an additional incentive to improve tax compliance and revenues from tourist spending. This could probably be achieved through a broad campaign warning of the overall harmfulness of tax avoidance, and through intensifying the on-site tax inspection activities.

Economic policy

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