An annotated bibliography of tax compliance and tax compliance costs

An annotated bibliography of tax compliance and tax compliance costs.tax; tax compliance; compliance costs; bibliography; tax evasion; tax avoidance; auditing; tax simplification

Quantitative assessment of Structural Reforms: Modelling the Lisbon Strategy

Using a variety of economic models, the Commission services have examined the impact of several reforms forming part of the Growth and Jobs Strategy (GJS). Overall, the results show that past reforms have delivered significant benefits, and that further reforms in key areas could generate important additional gains. The modelling results provide support for the existence of positive interactions between structural reforms in different areas, and thus for having a comprehensive reform strategy. They also highlight spillovers between reforms at EU and national level, the magnitude of which is being enhanced through the growing intensity of trade and investment.structural reforms, growth and jobs strategy, GJS, economic models, trade, investment, Arpaia, Roeger, Varga, in 't Veld, Hobza, Grilo, Wobst

The Effects of Flat Tax on Inequality and Informal Employment: The Case of Albania

In this study we perform the first econometric attempt to estimate the trade-off between equity and efficiency of tax systems counting for the tax evasion option in a developing country such as Albania. Using the Albanian Living Srandard Measurement Survey (2005, 2008) we estimate a micro-econometric model of labour supply and incorporate the option of participation in regular and irregular labour markets. Swapping the tax rules of 2005 with 2008, we find that the flat tax has not contributed in the reduction of labour informality but rather the increases in regular wages have played an important role in convincing the individuals to move to regular market. Furthermore, we find that controls and audits are more efficient than fines in inducing people to switch from the informal to formal labour market. A similar effect is achieved also when “honest” individuals are endowed with a universal benefit. In distributional terms, calculations of Gini inequality index and Sen’s welfare index demonstrate that the only scenario that would improve welfare index is a progressive tax rule as before 2007. Finally, these results suggest that a kind of progressivity should be reinserted to the taxation system without affecting the attractiveness of the simplicity exercised by the flat tax.

Gender and Tax Compliance: Firm Level Evidence from Ethiopia

Developing countries often lack tax information and enforcement capacity necessary to effectively implement instruments of a modern tax system, such as VAT, income taxes and others. An alternative strategy to increase tax compliance, and thus revenue, in these countries may depend on the capacity of policymakers to harness individual’s civicmindedness, social norms, reciprocity and cultural values of trust (Prichard, Custers, Dom, Davenport and Roscitt 2019). To do so in an effective and targeted way, policymakers need clear evidence on how tax compliance correlates with key taxpayer characteristics, such as gender. However, such evidence remains limited in the Global South, particularly in Africa, and our study aims to fill this gap. In this study, we investigate the correlation between business owner’s gender and tax compliance in Ethiopian enterprises. We measure the tax compliance of businesses from tax audit registry data and combine it with survey data collected from 408 enterprises. Our results suggest that enterprises’ tax compliance behaviour is significantly affected by their owners’ gender: female owned enterprises are more likely to be tax compliant than those owned by men. The correlation between the owner’s gender and tax compliance also becomes stronger as enterprises get larger in size. The results of our study imply that development-related polices, especially in the area of tax administration and compliance, should consider the behavioural variation among male and female business owners. Moreover, improving the participation of women in business in the country may also enhance equity and tax revenue collection for better resource mobilisation and development

Calculating the Cost of Environmental Regulation

Decisions concerning environmental protection hinge on estimates of economic burden. Over the past 30 years, economists have developed and applied various tools to measure this burden. In this paper, developed as a chapter for the Handbook of Environmental Economics, we present a taxonomy of costs along with methods for measuring those costs. At the broadest level, we distinguish between partial and general equilibrium costs. Partial equilibrium costs represent the burden directly borne by the regulated entity (firms, households, government), including both pecuniary and nonpecuniary expenses, when prices are held constant. General equilibrium costs reflect the net burden once all good and factor markets have equilibrated. In addition to partial equilibrium costs, these general equilibrium costs include welfare losses or gains in markets with preexisting distortions, welfare losses or gains from rebalancing the government's budget constraint, and welfare gains from the added flexibility of meeting pollution constraints through reductions in the use of higher-priced, pollution-intensive products. In addition to both partial and general equilibrium costs, we also consider the distribution of costs across households, countries, sectors, subnational regions, and generations. Despite improvements in our understanding of cost measurement, we find considerable opportunity for further work and, especially, better application of existing methods.social cost, cost-benefit, cost-effectiveness, environmental regulation

Bringing It Together (BIT). Volume 1: An Annotated Bibliography relating to voluntary tax compliance

This annotated bibliography brings together the research collections of the CTSI (Centre for Tax System Integrity) and ATO (Australian Taxation Office) Knowledge Development Network (KDNet). The listed entries (published and unpublished) span 5 decades from 1957 to 2003. We hope that people working in the tax administrations and the tax research will find this collaborative endeavor a valuable resource and a useful database for making decisions and implementing policy

Capital income taxation in Europe; trends and trade-offs

The EU capital market integrates. Portfolios become more international, cross border mergers are the order of the day, and never before has there been so much foreign direct investment. This links national tax systems. Residents pay foreign capital income tax, foreigners pay domestic capital income tax, and no member state can afford to overlook the danger of capital flight. What is the appropriate policy response? To do nothing? To coordinate tax systems at the European level? The data do not unequivocally support the tax-race-to-the-bottom hypothesis. On the one hand, member states decrease their statutory capital income tax rates. On the other, they broaden their capital income tax bases. Thus, fear for an economy-wide undertaxation of capital income -the main tenet of tax competition theory- is as yet ungrounded. Nevertheless, tax coordination may be beneficial. It resolves relative undertaxation of particular kinds of capital, forces convergence of capital income tax rates, and creates order in the costly European tax maze. Unfortunately, it simultaneously infringes upon the sovereignty of member states, and sidelines the disciplining force that tax competition exerts on government spending. This study assesses the most important proposals for capital income tax coordination against a background of the recent trends in capital income taxation and the trade offs between distinct policy objectives. It is a guide to the debate that is easy to read, yet firmly grounded in empirical evidence and economic theory.