Third-party reporting and employers’ tax withholding are powerful compliance mechanisms, as long as the employer and employee do not collude to evade. In cooperation with the Norwegian Tax ...Administration we designed a randomized field experiment with unannounced on-site audits. Matching audit data to administrative registers, we provide evidence of collusive tax evasion. We find that firms assigned to be audited increased their subsequent wage reporting on behalf of their employees by 18 percent relative to firms assigned to the control group. The effect is more pronounced among small firms with few employees. Our results document limitations of third-party reporting, but also that these limitations can be counteracted by minor on-site audits.
Consumers as Tax Auditors Naritomi, Joana
The American economic review,
09/2019, Volume:
109, Issue:
9
Journal Article
Peer reviewed
Open access
To investigate the enforcement value of third-party information on potentially collusive taxpayers, I study an anti-tax evasion program that rewards consumers for ensuring that firms report sales and ...establishes a verification system to aid whistle-blowing consumers in São Paulo, Brazil (Nota Fiscal Paulista). Firms reported sales increased by at least 21 percent over 4 years. The results are consistent with fixed costs of concealing collusion, increased detection probability from whistle-blower threats, and with behavioral biases associated with lotteries amplifying the enforcement value of the program. Although firms increased reported expenses, tax revenue net of rewards increased by 9.3 percent.
Our work highlights those normative and procedural changes aimed at preventing and combating tax evasion in the Romanian economic landscape. Referring to the most recent ones, we demonstrate that the ...legislator has sought (even if not achieved at the desired level) to create a business-friendly and fair environment, fostering the economic development of companies by protecting them against unfair competition from those who violate tax laws. This also encompasses the modernization of fiscal administration activities, primarily targeting increased revenue collection, among other goals. Our approaches focus on recent findings in combating tax evasion and fraud in Romania, closely associated with significant references to anti-evasion rules adopted within the context of ensuring Romania's long-term financial sustainability.
Claims that the VAT facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread VAT adoption worldwide, but there is surprisingly little evidence. ...This paper analyzes the role of third-party information for VAT enforcement through two randomized experiments among over 400,000 Chilean firms. Announcing additional monitoring has less impact on transactions that are subject to a paper trail, indicating the paper trail's preventive deterrence effect. This leads to strong enforcement spillovers up the VAT chain. These findings confirm that when taking evasion into account, significant differences emerge between otherwise equivalent forms of taxation.
Drawing on newly published macroeconomic statistics, this paper estimates the amount of household wealth owned by each country in offshore tax havens. The equivalent of 10% of world GDP is held in ...tax havens globally, but this average masks a great deal of heterogeneity—from a few percent of GDP in Scandinavia, to about 15% in Continental Europe, and 60% in Gulf countries and some Latin American economies. We use these estimates to construct revised series of top wealth shares in ten countries, which account for close to half of world GDP. Because offshore wealth is very concentrated at the top, accounting for it increases the top 0.01% wealth share substantially in Europe, even in countries that do not use tax havens extensively. It has considerable effects in Russia, where the vast majority of wealth at the top is held offshore. These results highlight the importance of looking beyond tax and survey data to study wealth accumulation among the very rich in a globalized world.
WHAT MOTIVATES TAX COMPLIANCE? Alm, James
Journal of economic surveys,
April 2019, 2019-04-00, 20190401, Volume:
33, Issue:
2
Journal Article
Peer reviewed
Open access
In this paper, I review and assess what we have learned about what motivates individuals to pay – or to not pay – their legally due tax liabilities. I focus on three specific questions. First, what ...does theory say about what motivates tax compliance? Second, what does the evidence show? Third, how can government use these insights to improve compliance? I conclude with some suggestions – and some predictions – for future research.
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