Income tax compliance in India: An empirical analysis

Dasgupta, Arindam; Lahiri, Radhika; Mookherjee, Dilip

doi:10.1016/0305-750x(95)00098-w

Cited by 61 publications

(22 citation statements)

References 9 publications

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“…Major studies of tax evasion undertaken in developing countries show that it is not uncommon for 50% or more of potential income tax to remain uncollected due to tax evasion (Bird, 1992;Gillis, 1989;Richupan, 1984). Das-Gupta, Lahiri, and Mookherjee (1995) observe that in India, the amount of income not subject to taxation is estimated to be more than 200% of the assessed income. EDEV is measured in this study based on the natural log of GDP per capita, which is collected from the 2005 World Development Indicators (World Bank, 2005a).…”

Section: Control Variablesmentioning

confidence: 98%

Determinants of tax evasion: A cross-country investigation

Richardson

2006

Journal of International Accounting, Auditing and Taxation

352

273

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Section: Control Variablesmentioning

confidence: 98%

Determinants of tax evasion: A cross-country investigation

Richardson

2006

Journal of International Accounting, Auditing and Taxation

352

273

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“…Furthermore, only a few papers have focused on tax evasion in Asia (see, for example, DasGupta, Lahiri and Mookherjee, 1995;Wong, 2001;Manasan, 2000). Thus, new empirical evidence helps reduce these shortcomings.…”

Section: Introductionmentioning

confidence: 99%

Tax morale in Asian countries

Torgler

2004

Journal of Asian Economics

150

107

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Abstract:This paper analyses tax morale in several Asian countries. The descriptive analysis indicates that tax morale is very low in the Philippines and relatively high in Japan, China, and Bangladesh. In general Asia has a higher tax morale than OECD countries, which might indicate cultural differences. The paper also analyses tax morale as a dependent variable and thus gives answers to what shapes tax morale. Pooling the Asian countries we find, e.g., that trust in the government and the legal system have a positive effect on tax morale. These results remain robust for India and Japan in a time series analysis. JEL classification: H260, K420

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“…Finally, it is widely shown that in India, the tax rate is the prime cause of tax evasion and black income generation. 1950/1951-1978/19797-9 Chopra (1982) Sectoral analysis and wage 1970/1971-1976/19775-10 Gupta and Gupta (1982 Currency model 1967-1978 9.5-48 Gupta and Mehta (1981) Physical input approach 1964approach /1965approach -1978approach /1979approach 3-20 NIPFP (1985 Monetary and survey approach 1975/1976-1983/1984 18-21 For instance, Das- Gupta et al (1995) showed that both revenues collected and compliance were significantly affected by tax structure (marginal tax rates and exemption limit). This is the reason why we mainly focus on tax rates as factors of black economy generation.…”

Section: Comparison With Previous Findings and Discussionmentioning

confidence: 99%

Estimating the size of the black economy: new evidence from India

Sharma

2019

IJOEM

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Purpose The issue of black economy has long been debated in India and it has been one of the key targets of policy action from last four decades. The debate is further fueled by demonetization of higher currency notes in the country. In this context, the purpose of this paper is to estimate the size of black economy in India for the period 1970–2017. Design/methodology/approach A currency demand approach is adopted for this purpose. The test of structure break indicates for a break in the system; therefore, the authors employ Johansen et al. (2000) cointegration test. For estimating the empirical model, the authors utilize fully modified ordinary least squares in a cointegration framework for taking care the endogeneity problem. Findings The estimates indicate that the Indian economy has a sizable black economy. In early 1970s, when the tax rate in India was significantly higher, the estimated black economy was above 30 percent of the official GDP. A variety of economic reforms including taxation, regulation and industrial licensing have drastically reduced the size to below 15 percent of official GDP in the last two decades. In the last estimated year (2017), the black economy was 23,849bn Indian rupees at current market price (around $400bn), which was 14 percent of the official GDP. Practical implications On the basis of the findings, the authors suggest some important fiscal, administrative and regulatory reforms to curb the generation of black economy in India. Originality/value The structural breaks can induce stochastic behavior similar to an integrated process, which makes it difficult to differentiate between the lack of cointegration and a structural shift. Thus, in the present study, the authors attempt to address this issue by incorporating the issue of structural break in the analysis. Furthermore, India is a cash-based economy; therefore, it is likely that currency-based models are more suitable. The application of advanced time-series techniques is likely to yield better and robust results.

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Income tax compliance in India: An empirical analysis

Cited by 61 publications

References 9 publications

Determinants of tax evasion: A cross-country investigation

Determinants of tax evasion: A cross-country investigation

Tax morale in Asian countries

Estimating the size of the black economy: new evidence from India

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