Since effective tax rates increase with income, the relative extensive underreporting of higher income earners reduces the progressivity of the tax system (the redistributional effect of under-reporting of low-income groups is minimal given the low effective tax rate they face) (Benedek and Lelkes, 2011). These findings appear to be in line with those for Italy and Hungary (Matsaganis et al., The distributional impact of tax evasion would be even stronger if evasion of other taxes than the personal income tax, and especially, social security contributions, were taken into account. In addition, tax evasion imposes a sizeable fiscal cost, with an estimated shortfall in tax revenue of around 30% (Leventi and Matsaganis, 2013b).