The Tax Reform Experiment in Transitional Countries

Martínez-Vázquez, Jorge; McNab, Robert

doi:10.17310/ntj.2000.2.06

Cited by 100 publications

(52 citation statements)

References 16 publications

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“…Difficult policy choices had to be faced in this new era in such areas as the role of the public sector in general and the structure of the tax system in particular (Alm, MartinezVazquez and Torgler 2005). Furthermore, at the beginning of the transition process, citizens in many transition countries were not used to paying taxes (see, e.g., Kornai 1990, MartinezVazquez andMcNab 2000). Thus, taxpayers may have reacted strongly to tax policy changes necessary for the transition from a centrally controlled economy to a market economy.…”

Section: Theoretical Approachmentioning

confidence: 99%

Tax morale and conditional cooperation

Frey

Torgler

2007

Journal of Comparative Economics

484

166

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Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax morale. USA Abstract:Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax morale.(99 words) JEL classification: H260, H730, D640

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Section: Theoretical Approachmentioning

confidence: 99%

Tax morale and conditional cooperation

Frey

Torgler

2007

Journal of Comparative Economics

484

166

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“…1 However, there are several compelling reasons for studying the experiences of transitional countries. Over the last decade almost all countries in transition have embarked in large scale tax reform efforts with very different rates of success (Martinez-Vazquez and McNab 2000). Low taxpayer compliance (by international standards) has invariably been a problem in all these transition countries.…”

Section: Introductionmentioning

confidence: 99%

Do Tax Amnesties Work? The Revenue Effects of Tax Amnesties During the Transition in the Russian Federation

Alm¹,

Martínez-Vázquez²,

Wallace³

2009

Economic Analysis and Policy

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Abstract:Governments of all kinds have frequently and increasingly turned to tax amnesties as part of their fiscal programs. An amnesty typically allows individuals or firms to pay delinquent taxes without being subject to some or all of the financial and criminal penalties that the discovery of tax evasion normally brings. Tax amnesties are a controversial revenue-raising tool. Advocates emphasize the immediate and short-run revenue impact, and often argue that future tax revenues may increase if the amnesty induces individuals or corporations not on the tax rolls to participate, and if the amnesty is accompanied by more extensive taxpayer services, better education on taxpayer responsibilities, and stricter post-amnesty penalties for evaders and greater expenditures for enforcement. Critics contend that the actual experiences of many countries indicate that the immediate impact on revenues is almost always quite small. They also question the long-run revenue impact of a tax amnesty, especially if honest taxpayers resent the special treatment of tax evaders and if individuals come to believe that the amnesty is not simply a one-time opportunity. This paper discusses the multiple tax amnesties enacted in the Russian Federation during its main transition period of the 1990s and analyzes the impact of these amnesties on tax collections. We find that these amnesties had little short-or long-term impact on revenues. We conclude that the Russian amnesties, like most other amnesties, seem unlikely to have had significant and demonstrable positive -or negative -impacts on the revenues of the Russian Federation, a conclusion that calls into question their usefulness as a policy instrument.

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“…It is generally admitted that much compromise have been made due to the presence of variety of constraints in various countries [1], so China did the same thing. Apparently, the political authority of the then China was more concerned about enhancing economic efficiency by economic and taxation reforms than about other considerations such as income redistribution, environmental protection and social justice.…”

Section: Issn 2412-8872mentioning

confidence: 99%