“Nothing is certain but death and taxes.” This phrase was coined over a hundred years ago by US politician and inventor Ben Franklin. While not for these words, but more than a hundred years after his death, his image appeared on the 100 dollar bill, Vakaris Deksnys wrote in lrytas.lt
Minister of Finance Vilius Šapoka appears to wish to immortalise himself similarly. “When I said earlier that it should be fashionable to pay taxes, I said it as a joke, but I believe that it already is fashionable,” the ministry’s head revealed fashion trends.
He also presented numbers: the shadow economy contracted by 10% over a decade, VAT revenue is rising faster than consumption. Not even to mention white waves caused by businesses, events against the shadow economy, using the bill lottery that encourages to pay the state!
But when considering whether it is fashionable to pay taxes, one ought to recall that miss Fashion is capricious, her tastes can change at a moment’s notice.
Take how a study by the Free Market Institute has displayed that as soon as the financial situation worsened, more than half (53%) of Lithuanian citizens would likely agree to work in the shadow. Perhaps illegally, perhaps receiving part of their pay off the books.
And 49% admitted that in such a case, they would buy illegal goods – cigarettes, contraband fuel, alcoholic beverages. Though even now the less wealthy citizens do not shirk these boons, which even during good economic times flood in from the East.
Thus, the fashion to pay taxes is very fragile – a slightly more significant crisis hurricane is all that is needed for most to toss it aside.
Cutting the shadow economy by a percentage point per year might not be all that difficult, but how do you erase it from the mind? A minister of finance or any other politician that manages to achieve this would definitely be worthy of being honoured with their image on a banknote. Just that this will require decades, if not a century.