Replication data for: No Taxation without Information: Deterrence and Self-Enforcement in the Value Added Tax

Principal Investigator(s): View help for Principal Investigator(s) Dina Pomeranz

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Project Description

Summary: Claims that the VAT facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread VAT adoption worldwide, but there is surprisingly little evidence. This paper analyzes the role of third-party information for VAT enforcement through two randomized experiments among over 400,000 Chilean firms. Announcing additional monitoring has less impact on transactions that are subject to a paper trail, indicating the paper trail's preventive deterrence effect. This leads to strong enforcement spillovers up the VAT chain. These findings confirm that when taking evasion into account, significant differences emerge between otherwise equivalent forms of taxation. (JEL D83, H25, H26, K34, O17)

Scope of Project

Subject Terms: [Randomized Control Trial, Enforcement, Tax Avoidance, Value-Added Tax, Spillovers, Paper Trail, Tax Evasion]

JEL Classification:
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H26 Tax Evasion and Avoidance
      K34 Tax Law
      O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

Geographic Coverage: Chile

Universe: Firms in Chile that were operating in June 2008 and had declared a positive amount of VAT for at least one month between July 2007 and June 2008.

Data Type(s): administrative records data

Methodology

Data Source: Chilean Tax Authority. Data is confidential and not public, and access must be granted directly by the Chilean Tax Authority.

Unit(s) of Observation: Firms, Month,

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Published Versions

V1 [2019-10-12]

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Dublin Core

DDI 2.5

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