Informal economic activity and tax evasion constitute persistent challenges for many countries, affecting fiscal stability and the effectiveness of tax enforcement mechanisms. This study examines the determinants of the shadow economy and tax evasion at the microeconomic level, with particular emphasis on the Greek case within a broader European context. The empirical analysis is based on data from the second round of the European Social Survey (2004/2005), comprising 47,537 respondents from 25 European countries.
The study employs ordered logistic regression models to investigate the factors influencing tax morale. The analysis focuses on two distinct groups of explanatory variables and examines their effects on tax morale across different population subgroups, namely farmers and non-farmers. By using the same dependent variable across all model specifications, the study aims to identify whether the determinants of tax morale differ between these two groups.
The findings indicate that tax morale is influenced more strongly by social and institutional factors than by the fear of sanctions in the event of non-compliance. Furthermore, the results suggest that tax compliance is closely associated with tax morale and the quality of governance. Finally, the analysis reveals significant differences in farmers’ tax morale across the countries included in the survey.

JEL Classification: H26, E26, Q10, C25