nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2014‒08‒28
four papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Voluntary Disclosure of Evaded Taxes - Increasing Revenues, or Increasing Incentives to Evade? By Langenmayr, Dominika
  2. Tax Amnesty (in Russian) By Kateryna Bornukova; Dzmitry Kruk; Gleb Shymanovich; Yuri Tserlukevich
  3. Financial incentives and labor market duality. By Clémence Berson; Nicolas Ferrari
  4. Picks and ploughs: revitalising local economic development in rural sub-Saharan Africa By Hilson, Gavin

  1. By: Langenmayr, Dominika
    Abstract: Many countries apply lower fines to tax evading individuals when they voluntarily disclose the tax evasion they committed. I model such voluntary disclosure mechanisms theoretically and show that while such mechanisms increase the incentive to evade taxes, they nevertheless increase tax revenues net of administrative costs. I then test the effects of voluntary disclosure in two separate empirical analyses. First, I confirm that voluntary disclosure mechanisms increase tax evasion, using the introduction of the 2009 offshore voluntary disclosure program in the U.S. for identification. Second, I quantify the tax revenues of voluntary disclosures by considering how some state-level governments in Germany bought whistle-blower data from foreign bank employees, thereby increasing the detection probability and the usage of voluntary disclosures.
    Keywords: Tax evasion; voluntary disclosure; self-reporting
    JEL: H26 K42 H24
    Date: 2014–08–12
  2. By: Kateryna Bornukova (Belarusian Economic Research and Outreach Center (BEROC)); Dzmitry Kruk (Belarusian Economic Research and Outreach Center (BEROC)); Gleb Shymanovich; Yuri Tserlukevich (Department of Finance, Arizona State University)
    Abstract: This paper explores international experience of tax amnesties. Despite the popular use of tax amnesties, the results are mixed. The main advantage of the tax amnesty is the possibility to increase tax collections and improve tax compliance. However, it does not account for adverse effect of amnesties on tax compliance and high direct and indirect costs of amnesties. The success of the tax amnesty depends largely on the state of the economy. We have identified target groups and discussed a question of a potential tax amnesty in Belarus.
    Keywords: Tax Amnesty, Tax Evasion, Belarus, Eastern Europe, Tax Policy and Reforms
    JEL: H26
    Date: 2014–08
  3. By: Clémence Berson (Centre d'Economie de la Sorbonne et Banque de France); Nicolas Ferrari (Direction Générale du Trésor)
    Abstract: The French labor market is divided between workers in permanent jobs and those who alternate fixed-term contracts with unemployment spells. Among other public policies aiming at reducing this duality, financial incentives could induce employers to lengthen contract duration or favor permanent contracts. This article develops a matching model fitted to the French labor-market characteristics and calibrated on French data. A gradual decrease in unemployment contributions or a firing tax reduces the duality but increases market rigidity and lowers labor productivity. However, decreasing unemployment contributions gradually is less favorable for new entrants than a firing tax and lengthens unemployment spells. An additional contribution levied on short-term contracts to finance a bonus for permanent-contract hirings also decreases labor-market duality and increases activity but without negative impacts on labor-market flexibility and productivity.
    Keywords: Duality, public policies.
    JEL: J41 J42 J48
    Date: 2014–07
  4. By: Hilson, Gavin
    Abstract: For decades, the rural development and poverty alleviation agenda in sub-Saharan Africa has emphasised support for smallholder farming and little else. Foreign large-scale miners and other industrial operators have complied, establishing agriculture-support services and programs for communities located near their activities. However, these interventions have yielded mixed results, largely because millions of rural African families have, over the course of the past two decades, diversified their income portfolios away from agriculture. One of the more popular destinations has been artisanal and small-scale mining (ASM) — low-tech, labour intensive mineral extraction and processing. This is a rapidly-growing informal sector of industry that provides a range of job opportunities; it has played an important role in nourishing debilitated smallholder farming activities, economically, over the past decade. In this era of globalisation, subsistence farming and rural nonfarm activities such as ASM have taken on very different roles: the latter have become, in most cases, a principal source of income, including in many rural sections of sub-Saharan Africa; increasingly, the former has taken on more of a food security role for the rural household. This paper proposes measures for supporting and formalising ASM in rural sub-Saharan Africa.
    Keywords: Community/Rural/Urban Development, Food Security and Poverty, International Development,
    Date: 2013

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