Informal entrepreneurship as a response to the tax structure and fiscal morale
Abstract
Informal entrepreneurship remains a persistent phenomenon in developing economies and represents a structural challenge for fiscal and accounting systems. This article analyzes informal entrepreneurship as a rational and behavioral response to tax structure and tax morale. From an analytical and documentary perspective, the main theoretical and empirical approaches to business informality, tax pressure, and fiscal behavior are examined, integrating contributions from economic and accounting literature. The methodology consists of an analytical review of specialized academic sources, identifying fiscal and institutional determinants influencing the decision to operate informally. Results show that complex tax structures, perceptions of fiscal inequity, and low institutional trust significantly influence the expansion of informal entrepreneurship. It is concluded that informality responds not only to economic incentives but also to moral, cultural, and accounting factors conditioning tax compliance.
Downloads
References
Asoni, A., & Sanandaji, T. (2014a). Taxation and the quality of entrepreneurship. Journal of Economics, 113(2), 101-123. https://doi.org/10.1007/s00712-013-0375-z
Baumol, W. J. (2016). On the Appropriate Social Responsibilities of Successful Entrepreneurs. Business & Society, 55(1), 14-22. https://doi.org/10.1177/0007650314523087
Bu, J., & Cuervo-Cazurra, A. (2019). How Does Informal Entrepreneurship Affect Innovation? Academy of Management Proceedings, 2019(1), 18735. https://doi.org/10.5465/AMBPP.2019.283
Bureau, S., & Fendt, J. (2011). Entrepreneurship in the Informal Economy: Why it Matters. The International Journal of Entrepreneurship and Innovation, 12(2), 85-94. https://doi.org/10.5367/ijei.2011.0026
Elgin, C., & Erturk, F. (2019). Informal economies around the world: Measures, determinants and consequences. Eurasian Economic Review, 9(2), 221-237. https://doi.org/10.1007/s40822-018-0105-5
Farazi, S. (2014). Informal Firms and Financial Inclusion: Status and Determinants. Journal of International Commerce, Economics and Policy, 05(03), 1440011. https://doi.org/10.1142/S1793993314400110
Fazio, C., Guzman, J., & Stern, S. (2020). The Impact of State-Level Research and Development Tax Credits on the Quantity and Quality of Entrepreneurship. Economic Development Quarterly, 34(2), 188-208. https://doi.org/10.1177/0891242420920926
Godfrey, P. C. (2011). Toward a Theory of the Informal Economy. Academy of Management Annals, 5(1), 231-277. https://doi.org/10.5465/19416520.2011.585818
Harris, J. D., Sapienza, H. J., & Bowie, N. E. (2009). Ethics and entrepreneurship. Journal of Business Venturing, 24(5), 407-418. https://doi.org/10.1016/j.jbusvent.2009.06.001
Henrekson, M., & Sanandaji, T. (2011). Entrepreneurship and the theory of taxation. Small Business Economics, 37(2), 167-185. https://doi.org/10.1007/s11187-009-9242-2
Nadirov, O., & Dehning, B. (2020). Tax Progressivity and Entrepreneurial Dynamics. Sustainability, 12(9), 3584. https://doi.org/10.3390/su12093584
Rapp, M. S., & Udoieva, I. A. (2018). What matters in the finance–growth nexus of advanced economies? Evidence from OECD countries. Applied Economics, 50(6), 676-690. https://doi.org/10.1080/00036846.2017.1337867
Santos, E., Fernandes, C. I., & Ferreira, J. J. (2021). The driving motives behind informal entrepreneurship: The effects of economic-financial crisis, recession and inequality. The International Journal of Entrepreneurship and Innovation, 22(1), 5-17. https://doi.org/10.1177/1465750320914788
Williams, C. C. (2007). Entrepreneurs Operating in the Informal Economy: Necessity or Opportunity Driven? Journal of Small Business & Entrepreneurship, 20(3), 309-319. https://doi.org/10.1080/08276331.2007.10593402
Copyright (c) 2026 Brighitte Leslie Encinas Condori
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
The Colombian Journal of Accounting is open access and does not charge for the delivery of the articles, the editorial process and the publication. It can be consulted freely, without the requirement of registration, subscription or payment. The authors of the articles are creditors of all the authors' rights and retain the publication rights without restrictions. The author and third parties are allowed to read, download, copy, reproduce, distribute, communicate and create from the article, as long as the credit is attributed to the author(s), the initial publication is recognized in the Colombian Journal of Accounting and for non-commercial purposes. This journal provides free access to its content under the principle of making research available to the public free of charge, which fosters a greater exchange of global knowledge.
All the papers is licenced by Creative Commons Reconocimiento-NoComercial-CompartirIgual 4.0.
