Public, Tax, and Health Policies and Institutional Performance

This dissertation evaluates the effectiveness of public interventions in tax policy (such as a tax compliance campaign in Greece), the performance of public institutions that dictate land zoning (corruption of zoning officials in Greece and Spain) and public health (publicly-provided health insurance; namely, Medicaid). The common underlying theme of the dissertation is the public nature of the policies examines with an empirical emphasis. The ultimate goal of this research body is to provide credible policy solutions for the improvement of public administration

Growth And Variability Of School District Income Tax Revenues: Is Tax Base Diversification A Good Idea For School Financing?

Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/145497/1/coep12276_am.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/145497/2/coep12276.pd

The Impact of Media Campaigns on Tax Filing: Quasi-Experimental Evidence from Pakistan

This paper examines the effect of mass media campaigns on income tax filing using survey data from Pakistan. We use information collected about a pro-tax filing communication campaign shortly after the 2013-14 tax filing deadline by Pakistan’s Federal Board of Revenue. We use an inverse probability-weighted regression adjustment estimator to construct comparable treatment and control groups in terms of media exposure and control for predictors of income tax filing. We find that respondents’ likelihood of income tax filing significantly increased in response to exposure to newspaper advertisements of information provision surrounding tax eligibility but not those concerning the tax filing deadline or the benefits associated with tax filing in the form of non-application of financial penalties. TV advertisements that relied on moral suasion and solely portrayed selfemployed taxpayers did not significantly improve tax filing for the entire survey population but were effective among the self-employed. This highlights the importance of the content of the message as well as the implementation of targeted media campaigns by a tax administration to enhance income tax filing

Trust in Government Institutions and Tax Morale

What actions do governments around the world take that may affect individuals’ trust in the government that positively influence tax morale (or a positive attitude toward tax compliance)? This paper researches which are the most salient government institutions that breed individual trust and the extent to which this trust ends up increasing citizens’ tax morale. We use cross-country survey information from the World Values Survey and the Freedom House spanning 92 countries and six survey waves during the period 1981-2014. Conditional on the level of political rights and civil liberties, we confirm prior evidence that trust in government organizations positively influences tax morale. More importantly, our findings show that it is trust in output government organizations that implement and deliver public goods and services to the citizenry that has a significantly larger impact on tax morale as compared to citizens’ trust in input-side organizations, such as the legislative and the executive branches of the government that design policy. We also exploit periods of democratic transitions, when large variations in trust may be present, to assess the role of trust in government organizations for tax morale using a treatment effects model. Our results reveal a robust, positive impact of negative democratic transitions on tax morale

The Impact of Plastic Money Use on VAT Compliance: Evidence from EU Countries

In recent decades, several countries around the world have implemented cash restriction policies to incentivize the use of electronic means of payments with the aim to combat money laundering, terrorism financing, and tax evasion. This paper examines the impact of the proliferation in credit and debit card usage on consumption tax compliance using annual national level data for 26 European Union (EU) member states from 2000 to 2016. We measure consumption tax compliance using estimated Value-Added Tax (VAT) gaps, defined as the difference between the theoretical VAT liability according to the law and actual VAT collections. We exploit variation in time and space of credit and debit card usage across 26 EU member states from 2000-16 using panel data and instrumental variable techniques and find that plastic money use significantly reduces tax evasion while cash withdrawals appear to noticeably widen the compliance gap. This paper contributes to the literature on the effect of modern means of payment on tax compliance by using a more adequate measure of the VAT compliance gap compared to earlier works and by accounting for potential confounders such as tax policy choices and ex ante enforcement capacity of tax administrations to curb the gap

The Effects of Media Campaigns on Individual Attitudes towards Tax Compliance; Quasi-Experimental evidence from survey data in Pakistan

Pakistan has consistently performed low on taxation, with revenue collection hovering around 10 percent of GDP. Tax reforms have been attempted but without significant gains in revenue collection. Due to the recalcitrance of tax revenues, the tax authority attempted to enlist voluntary compliance as one of the avenues for its efforts to increase collections. This paper examines the effectiveness of media campaigns in the TV and national newspapers used by the Federal Board of Revenues of Pakistan to increase awareness, tax filing, and, ultimately, tax morale. We use survey data that were collected in 2014 immediately after a communication campaign by Pakistan’s Federal Board of Revenue. Using coarsened exact matching, we construct treatment and control groups that are nearly identical in terms of pretreatment balance of demographic and behavioral predictors of high tax morale. We find improved perceptions towards tax compliance in Pakistan for respondents exposed to the TV and newspaper advertisements. The choice of the advertisement’s delivery device is important since the latter is more effective. Our findings provide empirical evidence that well timed campaigns can enhance voluntary compliance in tax filing

The Determinants of Tax Morale in Pakistan

This paper examines what shapes taxpayers’ attitudes towards tax compliance – otherwise known as tax morale – in Pakistan, a country that has struggled with low tax effort over the past decade. We exploit novel survey data collected in 2014 during a survey of individual taxpayers for the Federal Board of Revenue of Pakistan, which allows us to offer the first study of determinants of tax morale in Pakistan. These determinants are estimated using a binary probit regression model. Our results are, generally, in line with the findings of the modern empirical literature of tax morale in other countries. Overall, groups with lower labor force participation rates have more positive attitudes towards tax compliance in Pakistan. Educated respondents have higher tax morale in comparison to the illiterate but only those with very low or very high attainment levels have higher tax morale with respect to bachelor’s degree holders. In addition, metropolitan areas which are the largest population centers, are industrialized and seats of government have significantly high tax morale. We show that females have significantly higher tax morale than males. However, their attitudes towards tax compliance drastically worsen with the passage of time to the extent that elderly males have higher tax morale than elderly females. Relevant from the perspective of the tax administration in Pakistan, these findings imply potentially substantial gains from increasing female labor force participation rates. More generally, addressing the current failures of tax administration and dealing with the horizontal inequity resulting from administrative weaknesses is likely to contribute materially to improving voluntary compliance

Cashless payments and tax evasion: Evidence from VAT gaps in the EU

This paper explores the connection between the proliferation of cashless, or e-money, payments and value-added tax (VAT) compliance. We present both visual and descriptive evidence that illustrates a negative correlation between e-money use and VAT evasion, proxied by the VAT compliance gap for countries in the European Union, from 2001 until 2021. We find that increased e-money usage by 100 percentage points (pp) is associated with a reduction in the VAT gap of 0.3pp or 1.92% of the aggregate VAT compliance gap over time. Moreover, we contribute a novel estimate of the causal impact of cashless payments on VAT evasion during the COVID-19 public health emergency. We identify a link between mobility restrictions in the European Union and reductions in VAT compliance gaps, facilitated by changes in payment norms. An estimated rise of 1pp or 5.51% in e-money use results in an 11.9% reduction in the VAT compliance gap. Our findings suggest that changes in transaction payment behavior such as the adoption of cashless payments may yield significantly more tax revenues by curbing non-compliance. Policies aimed at promoting e-money usage and limiting cash circulation are relevant steps forward in this direction