Choose an application

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

The paper shows how tax rate cuts can increase revenues by improving tax compliance. The intuition is that tax evasion has externalities: tax evaders protect each other, because they tie down limited enforcement capacity. Thus, relatively small tax rate cuts, which decrease incentives to evade taxes, can lead to increased revenues through spillovers - creating Laffer effects. Interestingly, tax rate cuts here imply increasing effective taxes. The model is consistent with what happened in Russia, and may provide basis for further thinking about tax rate cuts in other countries.

Labor --- Public Finance --- Taxation --- Taxation, Subsidies, and Revenue: General --- Demand and Supply of Labor: General --- Tax Evasion and Avoidance --- Auditing --- Public finance & taxation --- Labour --- income economics --- Management accounting & bookkeeping --- Revenue administration --- Labor supply --- Tax return filing compliance --- Tax auditing and verification --- Revenue --- Labor market --- Tax administration and procedure --- Tax auditing --- United States --- Debts, Public --- Credit analysis --- Claims --- Econometric models.

Choose an application

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

The global financial and economic crisis presents major challenges for tax agencies. With the economic downturn, tax agencies are encountering emerging compliance problems and greater demands for taxpayer support in the face of prospective budget cuts. To help address these challenges, this paper encourages tax agencies to develop a tax compliance strategy for the crisis by (1) expanding assistance to taxpayers, (2) refocusing enforcement on emerging compliance risks, (3) enacting legislative reforms that facilitate tax administration, and (4) improving communication programs. In each of these areas, the paper identifies specific measures to underpin the strategy, drawing on practices from leading tax agencies and experiences from IMF technical assistance. The paper also highlights emerging tax compliance issues in the financial sector.

Financial Risk Management --- Macroeconomics --- Public Finance --- Taxation --- Fiscal Policy --- Tax Evasion and Avoidance --- Taxation, Subsidies, and Revenues: Other Sources of Revenue --- Taxation, Subsidies, and Revenue: General --- Financial Crises --- Business Fluctuations --- Cycles --- Public finance & taxation --- Economic & financial crises & disasters --- Economic growth --- Financial crises --- Revenue administration --- Economic recession --- Tax return filing compliance --- Tax refunds --- Revenue --- Recessions --- Tax administration and procedure --- Fiscal policy --- United States

Choose an application

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

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.

Indonesia --- Macroeconomics --- Economics: General --- Taxation --- Public Finance --- Tax Evasion and Avoidance --- Taxation, Subsidies, and Revenue: General --- Economic & financial crises & disasters --- Economics of specific sectors --- Tax planning and compliance --- Public finance & taxation --- Tax evasion --- Revenue administration --- Tax administration core functions --- Tax return filing compliance --- Currency crises --- Informal sector --- Economics --- Tax administration and procedure --- Revenue

Choose an application

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

An empirical finding by Gaspar, Jaramillo and Wingender (2016) shows that once countries cross a tax-to-GDP threshold of around 12¾ percent, real GDP per capita increases sharply and in a sustained manner over the following decade. In this paper, we attempt via four case studies—Spain, China, Colombia, and Nigeria—to illustrate that the improvements in tax capacity have been part of a deeper process of state capacity building. We discuss the political conditions that supported tax capacity building, highlighting three important political ingredients: constitutive institutions, inclusive politics and credible leadership.

Taxation --- United States --- Economic conditions. --- Public Finance --- Analysis of Collective Decision-Making: General --- Structure, Scope, and Performance of Government --- Tax Evasion and Avoidance --- Economic Development: General --- Institutions and Growth --- Taxation, Subsidies, and Revenue: General --- Fiscal Policy --- Public finance & taxation --- Macroeconomics --- Revenue administration --- Subnational tax --- Tax administration core functions --- Tax return filing compliance --- Fiscal policy --- Taxes --- Revenue --- Tax administration and procedure --- China, People's Republic of

Choose an application

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

Tax compliance costs tend to be disproportionately higher for small and young businesses. This paper examines how the quality of tax administration affects firm performance for a large sample of firms in emerging market and developing economies. We construct a novel, internationally comparable, and multidimensional index of tax administration quality (the TAQI) using information from the Tax Administration Diagnostic Assessment Tool. We show that better tax administration attenuates the productivity gap of small and young firms relative to larger and older firms, a result that is robust to controlling for other aspects of tax policy and of economic governance, alternative definitions of small and young firms, and measures of the quality of tax administration. From a policy perspective, we provide evidence that countries can reap growth and productivity dividends from improvements in tax administration that lower compliance costs faced by firms.

Economic development. --- Development, Economic --- Economic growth --- Growth, Economic --- Economic policy --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Taxation --- Production and Operations Management --- Fiscal Policy --- Fiscal Policies and Behavior of Economic Agents: General --- Debt --- Debt Management --- Sovereign Debt --- Taxation, Subsidies, and Revenue: General --- Tax Evasion and Avoidance --- Human Capital --- Skills --- Occupational Choice --- Labor Productivity --- Public finance & taxation --- Macroeconomics --- Tax administration core functions --- Compliance costs --- Tax return filing compliance --- Labor productivity --- Tax Administration Diagnostic and Assessment Tool (TADAT) --- Revenue administration --- Production --- Revenue performance assessment --- Tax administration and procedure --- Armenia, Republic of