Most of these countries finances are based on direct unavoidable taxes as they are already struggle to collect taxes the western way due to low compliance.
What's the western way? Don't you mean the US way?
In western Europe most places tax at source, which means your wages are taxed before they are sent to your bank. This sort of direct taxation ensures more compliance. I think rather the issue is that many places will deal in cash, where it is easier to avoid tax.
> In western Europe most places tax at source, which means your wages are taxed before they are sent to your bank.
The US does this too; it's known as "withholding". There are also "estimated taxes" paid quarterly if you have significant income outside of regular employment and thus not subject to withholding. You still have to settle up at the end of the tax year, but by that point the vast majority of the tax (and perhaps a bit more) has already been paid.
Not if you are employing your workers illegally and paying them with cash. Of course, each country is different and has different levels of control. Some which lack any control will just tax unavoidable items (like cars for example) to compensate. These are harder to smuggle and easier to catch.
US v. western Europe is distinction without a difference. Tax evasion is typically spread throughout the whole money lifecycle, from wage payments (where cash is used), to black-market purchases, to business deals (also in cash), to black-market imports and exports, etc.
