nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2018‒11‒12
three papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Consumers as Tax Auditors By Naritomi, Joana
  2. Study and Reports on the VAT Gap in the EU-28 Member States: 2018 Final Report By Grzegorz Poniatowski; Mikhail Bonch-Osmolovskiy; José María Durán-Cabré; Alejandro Esteller-Moré; Adam Œmietanka
  3. Las Características y el Desarrollo de la Economía Popular Un Modelo Formal con Evidencia Etnográfica By Joaquín Morales Belpaire; Valeria Salinas Maceda

  1. By: Naritomi, Joana
    Abstract: Access to third-party information trails is widely believed to be critical to the development of modern tax systems, but there is limited direct evidence of the effects of changes in information trails. This paper investigates the enforcement effect of an increased availability of third-party information, and sheds light on how governments can harness this information despite collusion opportunities. I exploit unique administrative data on firms and consumers from an anti-tax evasion program in Sao Paulo, Brazil (Nota Fiscal Paulista) that created monetary rewards for consumers to ensure that firms report final sales transactions, and establishes an online verification system that aids consumers in whistle-blowing firms. Using variation in intensity of exposure to the policy, I estimate that firms' reported revenue increased by at least 21% over four years. Heterogeneous effects across firms shed light on mechanisms: the results are consistent with fixed costs to conceal collusive deals and positive shifts in detection probability from whistle-blower threats. I also investigate the effect of whistle-blowers directly: firms report 7% more receipts and 3% more revenue after receiving the first consumer complaint. To study the role of the value of rewards in improving enforcement, I show evidence consistent with the possibility that lottery incentives amplify consumer responses due to behavioral biases, which would make it more costly for firms to try to match government incentives in a collusive deal. Finally, I find that although firms significantly adjusted reported expenses, there was an increase in tax revenue net of rewards of 9.3%.
    JEL: D83 H25 H26 K34 O17
    Date: 2018–10
  2. By: Grzegorz Poniatowski; Mikhail Bonch-Osmolovskiy; José María Durán-Cabré; Alejandro Esteller-Moré; Adam Œmietanka
    Abstract: In this Report, the Authors present the new Value Added Tax (VAT) Gap estimates for 2016, as well as updated estimates for 2012-2016. In addition to the analysis of the Compliance Gap, this Report examines the Policy Gap in 2016 as well as the contribution that reduced rates and exemptions made to the theoretical VAT revenue losses. Moreover, the Report contains an econometric analysis of VAT Gap determinants, which is a novelty introduced from this year’s Study.
    Keywords: consumption taxation, VAT, tax fraud, tax evasion, tax avoidance, tax gap, tax non-compliance, policy gap
    JEL: H24 H26
    Date: 2018
  3. By: Joaquín Morales Belpaire (Universidad Privada Boliviana); Valeria Salinas Maceda (Universidad de Salamanca)
    Abstract: En esta investigación exploramos las razones de la prosperidad económica de ciertos comerciantes populares en Bolivia. Si bien las ciencias económicas frecuentemente asocian sectores populares de la economía con bajo desempeño económico, estudios antropológicos demuestran la existencia de grandes fortunas en la llamada Economía Popular (Tassi et al., 2013). Desarrollamos un modelo formal que encuentra el origen de esta prosperidad en la capacidad coopetitiva (competitiva más cooperativa) de empresarios populares basada en compartir costos de insumos. Argumentamos que la capacidad coopetitiva de estos actores está basada en redes de compadrazgo tejidas en fiestas populares, las cuales documentamos con evidencia etnográfica.
    Keywords: Economía informal, economía popular, teoría de clubes, acción colectiva
    JEL: O17 D02 D24
    Date: 2018–09

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