Itemised Deductions: A Device to Reduce Tax Evasion

Piolatto, Amedeo

doi:10.1111/geer.12059

Cited by 10 publications

(7 citation statements)

References 21 publications

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“…We find that this tax reduces evasion only at high rates and that its rate must grow with the mass of cash users. Other related studies include Gordon (1990), Boadway, Marceau and Mongrain (2002), Chang and Lai (2004) and Piolatto (2014).…”

Section: Introductionmentioning

confidence: 99%

Cashless payments and tax evasion

Immordino

Russo

2018

European Journal of Political Economy

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Cashless payments hinder tax evasion because they build a trail for the underlying transactions. We find empirical evidence supporting this claim for Europe, showing a negative relationship between VAT evasion and the payments with credit and debit cards. We also find that using electronic cards to gather cash at ATMs, by making cash more abundant, fosters VAT evasion. Policies aimed at reducing tax evasion should therefore subsidize the direct use of electronic cards as payments, not their possession.

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Section: Introductionmentioning

confidence: 99%

Cashless payments and tax evasion

Immordino

Russo

2018

European Journal of Political Economy

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“…The main difference between these previous works and ours is that, instead of focusing on fines and enforcement, we study the effects of two different policy instruments: the tax rebate and the tax on cash withdrawals. Piolatto (2015) deals with tax rebates when the legal and underground markets are separate. Although his model is not a proper representation of cooperative tax evasion, he reaches conclusions similar to ours: it is possible to increase the tax proceeds by choosing a suitable level of tax rebate.…”

Section: Related Literaturementioning

confidence: 99%

Fighting Tax Evasion by Discouraging the Use of Cash?

Immordino

Russo

2018

Fiscal Studies

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We propose a bargaining model of tax evasion with a seller that offers a price discount to a buyer in exchange for a cash payment without a receipt, which allows tax evasion. We study the effect on evasion and government revenue of two policy instruments: a tax on cash withdrawals (TCW), which imposes a cost on the buyers who pay cash, and a tax rebate conditional on having the receipt. The tax rebate reduces evasion but it is costly if tax evasion is low. The TCW reduces evasion only if it is set at a sufficiently high rate, which must be higher the larger is the mass of cash users. We also show that the implementation of a TCW, which poses several challenges, is easier if the cost of cash hoarding is high.

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“…The major issue on tax collection has been compliance or non-compliance. Studies have been made on understanding the phenomenon from different perspectives, economics [8][9][10], social norms [11][12] and ethical behaviour [13], and due to complexity of compliance behaviour among entities, researchers are suggesting the combination of approaches [14]. The posed question has been how to tackle the noncompliance problem at minimal cost and without affecting efficiency operations of entities, but ensuring maximization of tax revenue collections.…”

Section: Problem Statementmentioning

confidence: 99%

Underlying Factors on Consumer’s Behaviour in Asking for Sales Receipts Towards Tax Collection Maximization: An Application of Theory of Planned Behaviour

Mwang’onda¹

2018

PBS

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Tax administrations have been working on how to deal with non-compliance behaviour at minimal cost, while maximizing collections without affecting efficiency operations of entities in an economy. Studies have been done to understand complexity of this behaviour from economic, social norms, ethical and psychological perspectives. Using theory of planned behaviour (TPB), this study embarks on the same journey by investigating the behaviour of consumer as third-party tax enforcer through asking for sales receipts after transaction. From data collected at Dodoma Municipality by questioning 118 respondents, the study unveils that, attitude and subjective norms have a positive effect on intention to ask for sales receipt, while; there was no effect of perceive behaviour control on customer's intention to ask for sales receipt. Most of the customers acknowlege goodness, desirability or importance of asking for sales receipt, which is argued to have implication on effeciency of tax collection exercise. Morover relatives and friends have significant effect of individual behaviour of asking for receipt, thus existance of habit of asking for sales receipt among community members reduces moral and ethical cost of acting as a third-party tax enforcer. Efforts should be directed more toward winning consumers' support rather than using more force on traders, and adoption and use of EFDs should go parallel with other strategies aiming at improving tax collection.

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Itemised Deductions: A Device to Reduce Tax Evasion

Cited by 10 publications

References 21 publications

Cashless payments and tax evasion

Cashless payments and tax evasion

Fighting Tax Evasion by Discouraging the Use of Cash?

Underlying Factors on Consumer’s Behaviour in Asking for Sales Receipts Towards Tax Collection Maximization: An Application of Theory of Planned Behaviour

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