Data and Code for: Tax Administration vs. Tax Rates: Evidence from Corporate Taxation in Indonesia

Principal Investigator(s): View help for Principal Investigator(s) M. Chatib Basri, University of Indonesia; Mayara Felix, MIT; Rema Hanna, Harvard University; Benjamin A. Olken, MIT

Version: View help for Version V1

Name	File Type	Size	Last Modified
Repository			09/10/2021 10:11:AM

Project Citation:

Basri, M. Chatib, Felix, Mayara, Hanna, Rema, and Olken, Benjamin A. Data and Code for: Tax Administration vs. Tax Rates: Evidence from Corporate Taxation in Indonesia. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-11-19. https://doi.org/10.3886/E145822V1

Project Description

Summary:

We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into “Medium Taxpayer Offices,” with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining non-linear changes to corporate income tax rates, we estimate an elasticity of taxable income of 0.579. Combining these estimates, improved tax administration is equivalent to raising rates on affected firms by 8 percentage points. On net, improved tax administration can have significant returns for developing countries.

Scope of Project

Subject Terms: Corporate Taxation; Tax administration; Indonesia

JEL Classification:
      H25 Business Taxes and Subsidies including sales and value-added (VAT)
      H26 Tax Evasion and Avoidance
      H83 Public Administration; Public Sector Accounting and Audits

Geographic Coverage: Indonesia

Time Period(s): 2003 – 2011

Collection Date(s): 2016 – 2018

Universe: Indonesian Corporate Taxpayers

Data Type(s): aggregate data; program source code

Collection Notes: Administrative data, including accompanying auxiliary files, cannot be made publicly available. Interested researchers should follow the instructions in this repository's ReadME file file for obtaining administrative data.

Data on the Indonesian GDP deflator are provided in this repository. These data are publicly available, and can also be downloaded at: https://fred.stlouisfed.org/series/IDNGDPDEFAISMEI.

Methodology

Data Source: Anonymized administrative data are from the Indonesian Directorate General of Taxes (DGT). Publicly available data on the Indonesian GDP deflator are from the Federal Reserve Bank of St. Louis' website. See this repository's ReadME file for details.

Unit(s) of Observation: Anonymized corporate taxpayer

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Published Versions

V1 [2021-11-19]

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DDI 2.5

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