The Value of Unrecorded Economy In Turkey and Professional Accountants, Tax Auditors and Business Managers Perceptions The Unrecorded Economy :The Example of Aydın

The consept of taxation emerging with people’s transition to settled life is an issue that must be considered, in the sense that it meets the financial needs of the state and is also an indicator of the power of state authority. But due to reduction in individual savings with crowd behavior,indivuals don’t want to pay taxes as a result of their economic activities and they also manipulate their economic transations to underground economy.In order to collect the taxes accurately, nations refer to applications and measures such as tax amnesties, irregularity fines, denunciation premiums and many more; nevertheless, individuals, in order to protect their savings or due to crowd behavior, avoid attesting their taxes properly or even do not pay them at all. Because of these and other reasons, those people who hide their income from the government and create other savings apart from the gross national income bring about unrecorded economy. This problem affecting the country’s economy can only be solved by the cooperation of all levels of society. First of all, in dealing with unrecorded economy, the reasons for unregistered income should be defined and suitable preventive policies must be applied. Besides some positive sides of unrecorded economy, there are also many negative effects. Some examples for the positive sides are contributions to economic growth, the increase of employment and economic revival. But there are negative sides as well, such as a deficiency in measuring various employment fields and national income, the lack of an insurance guarantee for labourers, a decrease in tax income, problems financing public expenditure, the increase of child labourers, an unjust tax distribution and the increase of unfair business practices. Both political and public determination are very important in order to deal with this problem. The aim of this study is to evaluate how much unrecorded economy exists in Turkey, to come up with solutions to prevent it, and to list the reasons and consequences behind it. But the more important fact is that in order to eradicate this problem, new principles and morals on taxation should be established and conducted in all levels of society. In implementing this study, a survey has been applied to accountants, tax auditors and business managers in order to assess their perceptions of unrecorded economy and their struggles to prevent it.