Replication data for: Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement

Principal Investigator(s): View help for Principal Investigator(s) Paul Carrillo; Dina Pomeranz; Monica Singhal

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Project Citation:

Carrillo, Paul, Pomeranz, Dina, and Singhal, Monica. Replication data for: Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113625V1

Project Description

Summary: Reducing tax evasion is a priority for many governments. A growing literature argues that verifying taxpayer reports against third-party information is critical for tax collection. However, effectiveness can be limited when tax authorities face constraints to credible enforcement and taxpayers make offsetting adjustments on other margins. We exploit a policy intervention in which Ecuadorian firms were notified about detected revenue discrepancies. Most firms simply failed to respond. Firms that responded increased reported revenue, matching the discrepancy amount when provided. However, they also increased reported costs by 96 cents per dollar of revenue adjustment, resulting in minor increases in tax collection.

Scope of Project

JEL Classification:
      D22 Firm Behavior: Empirical Analysis
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H26 Tax Evasion and Avoidance
      O23 Fiscal and Monetary Policy in Development

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V1 [2019-10-12]

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