The Effect of Economic Freedom on Tax Evasion and Social Welfare: An Empirical Evidence

Abstract

This study is to examine the effect of economic freedom on tax evasion and social welfare for 63 countries by using multi-regression method. The findings indicate that economic freedom and tax evasion have a statistically significant and negative correlation, whereas economic freedom and social welfare have a meaningful and positive correlation. Accordingly, enhancing economic freedom causes an increase in social welfare, and prevents tax evasion.