Imperfect Enforcement of a Tax Threshold: The Consequences on Efficiency
| Autor: | Jonathan Goyette |
|---|---|
| Rok vydání: | 2019 |
| Předmět: |
Counterfactual thinking
Economics and Econometrics Public economics Corruption business.industry media_common.quotation_subject 05 social sciences Distribution (economics) Differential (mechanical device) Audit Development 8. Economic growth 0502 economics and business Economics Production (economics) 050207 economics Enforcement business Productivity 050205 econometrics media_common |
| Zdroj: | Journal of African Economies. 28:119-146 |
| ISSN: | 1464-3723 0963-8024 |
| DOI: | 10.1093/jae/ejy018 |
| Popis: | In this paper, I build a model of firms’ growth with heterogeneous entrepreneurs where audits for taxes are conditioned either on sales or employees and where entrepreneurs negotiate a bribe in exchange of a tax rebate when audited by tax inspectors. I show that the impact differential between the two auditing strategies depends on the regulation environment of a country. The model is calibrated and validated using firm-level data from Uganda. The model replicates well the Ugandan size distribution of firms as well as other key statistics relevant for the counterfactual experiments. Simulations show that, in a situation where Uganda could fully eradicate tax evasion and used the recouped taxes to subsidise production, productivity per worker could increase by as much as 45%. I also show that there could be a 16% annual gain in productivity per worker solely by conditioning audits on sales rather than on employees in Uganda. |
| Databáze: | OpenAIRE |
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