2020
DOI: 10.1016/j.jebo.2020.07.002
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The impact of local corruption on business tax registration and compliance: Evidence from Vietnam

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Cited by 15 publications
(14 citation statements)
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References 35 publications
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“…Furthermore, Property Rights, Trade Freedom, and Investment Freedom are the factors that have a significant impact on corruption perception. Similar to the studies in the literature, it is shown that the nexus between marginal tax rate (or total tax burden as a percentage of GDP), which is the major metrics of the Tax Burden dimension, and the corruption perception is highly correlated (Damayanti et al, 2020;Myles & Yousefi, 2020;Le et al, 2020). The relationship between Tax Burden and Corruption is described as it appears that there is less corruption when there is a low tax burden, thus taxpayers are intrinsically motivated to act more honestly and provide accurate information in these studies.…”
Section: Discussionsupporting
confidence: 69%
“…Furthermore, Property Rights, Trade Freedom, and Investment Freedom are the factors that have a significant impact on corruption perception. Similar to the studies in the literature, it is shown that the nexus between marginal tax rate (or total tax burden as a percentage of GDP), which is the major metrics of the Tax Burden dimension, and the corruption perception is highly correlated (Damayanti et al, 2020;Myles & Yousefi, 2020;Le et al, 2020). The relationship between Tax Burden and Corruption is described as it appears that there is less corruption when there is a low tax burden, thus taxpayers are intrinsically motivated to act more honestly and provide accurate information in these studies.…”
Section: Discussionsupporting
confidence: 69%
“…For them, by the virtue of their informal status, the cost and disturbance of dealing with corrupt government officials had increased to the extent that they would rather prefer to register themselves and do away with those frequent incidents of harassment. The transactional costs related to bribes are potentially reduced with formalization for these street entrepreneurs (see also, Le et al, 2020;Darkwa-Amanor et al, 2007).…”
Section: Discussionmentioning
confidence: 99%
“…In certain cases, on the contrary, in developing countries, a rise in corruption is rather found to be associated with a higher level of formality. It seems to be the case when the transactional costs of paying bribes are potentially more than the cost of formality and hence formalization is viewed by entrepreneurs as a conduit to escape corrupt government officials (Le et al, 2020;Darkwa-Amanor et al, 2007). However, as more commonly the case in a developing country corruption deprives the state of the funds it needs to maintain quality governance, which in turn severally limits its capacity to ensure a just and fair redistribution of wealth among its citizens and hence leads to higher informality (Khan, 2020).…”
Section: The First Institutional Perspective: Formal Institutional Fa...mentioning
confidence: 99%
“…Due to the disadvantages attached to being a registered VAT vendor [being subject to scrutiny, high compliance costs, complexity of the VAT refund system and the administrative burden attached to being registered (Klahr et al, 2017;Le et al, 2020)], it is not expected that with a decrease in the VAT rate, businesses who are not registered VAT vendors would register as such if they do not meet the compulsory registration threshold (thus would not register voluntarily). In contrast, there are several advantages to being a registered VAT vendor, such as claiming back the input tax on its purchases (Ebrill et al, 2001); winning tenders or being the preferred supplier of other VAT vendors (Moodaley, 2015); improved reputation and better credibility (Klahr et al, 2017).…”
Section: H2mentioning
confidence: 99%
“…Whether an entity is obliged to register or it voluntarily registers for VAT, there are a number of advantages to being a registered VAT vendor: the entity can claim back the input tax on its purchases (Ebrill et al , 2001; Harju et al , 2015; James, 2015b; Schenk et al , 2015); some large businesses and government departments require their suppliers to be registered for VAT, and thus only VAT-registered entities are used as suppliers (Moodaley, 2015); the entity can benefit from an improved reputation; and the entity has better credibility (Klahr et al , 2017). Further advantages of registering for VAT are avoiding the payment of fines for non-registration and expanding the customer base due to the fact that the business can issue official receipts (Le et al , 2020).…”
Section: Background and Literature Reviewmentioning
confidence: 99%