TY - BOOK ID - 136909211 TI - Coming Clean on Your Taxes AU - Beer, Sebastian. AU - Mooij, Ruud A. PY - 2023 SN - 9798400229848 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Indonesia KW - Macroeconomics KW - Economics: General KW - Taxation KW - Public Finance KW - Tax Evasion and Avoidance KW - Taxation, Subsidies, and Revenue: General KW - Economic & financial crises & disasters KW - Economics of specific sectors KW - Tax planning and compliance KW - Public finance & taxation KW - Tax evasion KW - Revenue administration KW - Tax administration core functions KW - Tax return filing compliance KW - Currency crises KW - Informal sector KW - Economics KW - Tax administration and procedure KW - Revenue UR - https://www.unicat.be/uniCat?func=search&query=sysid:136909211 AB - This paper develops a simple model to explore whether a higher detection probability for offshore tax evaders—e.g. because of improved exchange of information between countries and/or due to digitalization of tax administrations—renders it optimal for governments to introduce a voluntary disclosure program (VDP) and, if so, under what terms. We find that if the VDP is unanticipated, it is likely to be optimal for a revenue-maximizing government to introduce a VDP with relatively generous terms, i.e. a low or even negative penalty. When anticipated, however, the VDP is neither incentive compatible nor optimal, as it induces otherwise compliant taxpayers to evade tax. A VDP can then only be beneficial if tax evasion induces an external social cost beyond the direct revenue foregone, e.g., due to adverse effects on overall tax morale. In contrast to the common view that VDPs should come along with additional enforcement effort, we find that governments should relax enforcement if the VDP itself provides more powerful incentives to come clean. ER -