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This paper examines the impact of e-invoicing on firm tax compliance and performance using administrative tax data and quasi-experimental variation in the rollout of VAT electronic invoicing in Peru. We find that e-invoicing increases reported firm sales, purchases and value-added by over 5 percent in the first year after adoption. The impact is concentrated among smaller firms and sectors with higher rates of non-compliance, suggesting that e-invoicing enhances compliance by lowering compliance costs and strengthening deterrence. The reform’s positive effects on tax collection are hindered by shortcomings in the VAT refund mechanism in Peru, suggesting that digital tools such as e-invoicing should be complemented by other reforms to improve revenue mobilization.

Investments: Stocks --- Money and Monetary Policy --- Taxation --- Firm Behavior: Empirical Analysis --- Business Taxes and Subsidies --- Tax Evasion and Avoidance --- Firm Performance: Size, Diversification, and Scope --- Formal and Informal Sectors --- Shadow Economy --- Institutional Arrangements --- Taxation, Subsidies, and Revenue: General --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Public finance & taxation --- Monetary economics --- Investment & securities --- Value-added tax --- Credit --- Tax administration core functions --- Tax return filing compliance --- Stocks --- Taxes --- Money --- Revenue administration --- Financial institutions --- Spendings tax --- Tax administration and procedure --- Peru

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms.

Macroeconomics --- Economics: General --- Taxation --- Firm Behavior: Empirical Analysis --- Business Taxes and Subsidies --- Tax Evasion and Avoidance --- Firm Performance: Size, Diversification, and Scope --- Formal and Informal Sectors --- Shadow Economy --- Institutional Arrangements --- Transactional Relationships --- Contracts and Reputation --- Networks --- Taxation, Subsidies, and Revenue: General --- Externalities --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Public finance & taxation --- Technology --- general issues --- Value-added tax --- Taxes --- Tax return filing compliance --- Revenue administration --- Spillovers --- Financial sector policy and analysis --- Positive spillovers --- Tax spillovers --- Tax policy --- Currency crises --- Informal sector --- Economics --- Spendings tax --- Tax administration and procedure --- International finance --- General issues