Poland’s tobacco shadow zone

Abstract

Poland's geographic location is conducive to cross-border economic crimes related to violations of excise tax regulations. The shadow economy is an economic activity that circumvents government regulation and is therefore beyond the knowledge of government authorities. It includes both monetary and non-monetary transactions of a legal nature and includes activities that would be taxable if reported to the appropriate authorities. The level of Poland's tobacco shadow economy declined significantly between 2015 and 2020. The aim of the article is to discuss the level of the shadow economy and identify the determinants affecting its level during the period studied. To achieve the objectives, analysis of national and international literature and reports was conducted. Conclusions were formulated deductively. On the basis of the analysis, it was concluded that the predictable and rational excise policy, effective enforcement of harsher penalties and improvement of the operational efficiency of relevant services are the key determinants of the decreasing level of the shadow economy in the examined period.