nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2020‒06‒29
eight papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Estimating International Tax Evasion by Individuals By ECOPA CASE
  2. Overclaimed Refunds, Undeclared Sales, and Invoice Mills: Nature and Extent of Noncompliance in a Value-Added Tax By Waseem, Mazhar
  3. How to Improve Tax Compliance? Evidence from Population-wide Experiments in Belgium By De Neve, Jan-Emmanuel; Imbert, Clement; Spinnewijn, Johannes; Tsankova, Teodora; Luts, Maarten
  4. Can Prepopulated Tax Returns Enhance Tax Compliance? The Effects of the Spanish Renta Web Initiative from a Sociology of Taxation Perspective By Jorge Martinez-Vazquez; Eduardo Sanz-Arcega
  5. How Should Policy Responses to the COVID-19 Pandemic Differ in the Developing World? By Titan M. Alon; Minki Kim; David Lagakos; Mitchell VanVuren
  6. Understanding the greater diffusion of mobile money innovations in Africa By Simplice A. Asongu; Nicholas Biekpe; Danny Cassimon
  7. Diferencias regionales en el impacto económico del aislamiento preventivo por el COVID-19: estudio de caso para Colombia By Diana Ricciulli-Marín; Jaime Bonet-Morón; Gerson Javier Pérez-Valbuena; Eduardo A. Haddad; Inácio F. Araújo; Fernando S. Perobelli
  8. Los trabajadores de plataforma y su regulación en la Argentina By Goldin, Adrián

    Abstract: This study provides estimates of offshore wealth held by individuals (for the world’s main economies) and corresponding estimates of international tax evasion (for the EU and EU Member States). Following the literature, the methodology relies on public statistics published by international organisations.
    Keywords: EU tax evasion, international tax evasion, offshore wealth
    JEL: H24 H26 H87 G21
    Date: 2019–09
  2. By: Waseem, Mazhar
    Abstract: I leverage a Pakistani tax reform that cuts the tax rate on the supply chains of five major industries of the country from 15% to 0% to cast light on the extent of, and mechanisms driving, VAT noncompliance in a representative emerging economy. I find that firms overclaim refunds by 22% and underreport domestic B2C sales by 43.5%. Together, this implies an evasion rate of 77% in the treated industries and 38% in the population. I explore the role of three mechanisms (1) the destination principle, (2) the last-mile problem, and (3) invoice mills in driving this noncompliance.
    Keywords: Firm behaviour; tax evasion; VAT
    JEL: H25 H26 H32
    Date: 2020–04
  3. By: De Neve, Jan-Emmanuel (University of Oxford); Imbert, Clement (University of Warwick); Spinnewijn, Johannes (London School of Economics); Tsankova, Teodora (University of Warwick); Luts, Maarten (FPS Finance)
    Abstract: We study the impact of simplification, deterrence and tax morale on tax compliance. We ran five natural field experiments varying the communication of the tax administration with the universe of income taxpayers in Belgium throughout the tax process. A consistent picture emerges across experiments : (i) simplifying communication substantially increases compliance, (ii) deterrence messages have an additional positive effect, (iii) invoking tax morale is not effective, and often backfires. A discontinuity in enforcement intensity, combined with the experimental variation, allows us to compare simplification with standard enforcement measures. We find that simplification is far more cost-effective, allowing for substantial savings on enforcement costs
    Keywords: Tax Compliance ; Field Experiments ; Simplification ; Enforcement JEL Classification: C93 ; D91 ; H20
    Date: 2020
  4. By: Jorge Martinez-Vazquez (International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University); Eduardo Sanz-Arcega (Department of Economic Structure, Economic History and Public Economics, University of Zaragoza, Spain)
    Abstract: This paper explores the effects of pre-populated personal income tax returns on taxpayers’ tax morale and tax filing behavior. The special questionnaire about Renta Web included in the 2016 wave of the Spanish Institute for Fiscal Studies Fiscal Barometer surveyed individual perceptions about pre-populating income tax returns. Using probit regression analysis, we test whether pre-population affects tax morale. Secondly, we test whether pre-population influences perceptions about tax filing behavior. Our main results show that the relationship between making changes on the prefilled tax form and the likelihood of facing an audit do influence Spaniards’ tax morale, as well as their perceptions about tax filing behavior. Moreover, pre-population features by themselves do not have a clear impact on tax morale or tax filing behavior. Several policy implications arise from the results.
    Date: 2020–06
  5. By: Titan M. Alon; Minki Kim; David Lagakos; Mitchell VanVuren
    Abstract: The COVID-19 pandemic has already led to dramatic policy responses in most advanced economies, and in particular sustained lockdowns matched with sizable transfers to much of the workforce. This paper provides a preliminary quantitative analysis of how aggregate policy responses should differ in developing countries. To do so we build an incomplete-markets macroeconomic model with epidemiological dynamics that features several of the main economic and demographic distinctions between advanced and developing economies relevant for the pandemic. We focus in particular on differences in population structure, fiscal capacity, healthcare capacity, the prevalence of ``hand-to-mouth'' households, and the size of the informal sector. The model predicts that blanket lockdowns are generally less effective in developing countries at reducing the welfare costs of the pandemic, saving fewer lives per unit of lost GDP. Age-specific lockdown policies, on the other hand, may be even more potent in developing countries, saving more lives per unit of lost output than in advanced economies.
    JEL: E2 E6 I15 I28 O17 O41
    Date: 2020–05
  6. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas Biekpe (Cape Town, South Africa); Danny Cassimon (University of Antwerp, Belgium)
    Abstract: The present research extends Lashitew, van Tulder and Liasse (2019, RP) in order to understand the greater diffusion of mobile money innovations in Africa. To make this assessment, a comparative analysis is engaged between sampled African countries and the corresponding sampled developing countries. Three main types of predictor groups are used for the study, namely: demand, supply and macro-level factors. The empirical evidence is based on Tobit regressions. The tested hypothesis is confirmed because from a comparative analysis between African-specific estimates and those of the sampled countries, not all factors driving mobile money innovations in Africa are apparent in the findings of Lashitew et al. (2019). An extended analysis is also performed to take on board the concern of multicollinearity from which, the best estimators from the study are derived. Comparative findings from correlation analysis show that an African specificity is largely traceable to the ‘unique mobile subscription rate’ variable. An in-depth empirical analysis further confirms an African specificity in the outcome variables (especially in the mobile used to send/receive money) which, may be traceable to informal sector variables not documented in Lashitew et al. (2019). Scholarly and policy implications are discussed.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2020–01
  7. By: Diana Ricciulli-Marín (Banco de la República de Colombia); Jaime Bonet-Morón (Banco de la República de Colombia); Gerson Javier Pérez-Valbuena (Banco de la República de Colombia); Eduardo A. Haddad; Inácio F. Araújo; Fernando S. Perobelli
    Abstract: Este documento analiza las diferencias regionales en el impacto económico de las medidas de aislamiento ordenadas para evitar la propagación del COVID-19 en Colombia. A través de un modelo insumo-producto, se estiman las pérdidas económicas que resultan de extraer un grupo de empleados formales e informales de los distintos sectores y entidades territoriales del país. Los resultados señalan diferencias regionales en el impacto del confinamiento sobre el mercado laboral, las economías locales y sus sectores productivos. Se encuentra que las regiones periféricas (Amazonía, Caribe, Pacífica y Llanos y Orinoquia) concentran un mayor número de informales en el grupo de ocupados en aislamiento que las regiones centrales (Eje Cafetero y Antioquia, y Central). Por su parte, las pérdidas económicas oscilan desde 5,4% del PIB para la región Amazonía hasta 6,3% en el Eje Cafetero y Antioquia. Además, mientras que el sector servicios concentra las mayores pérdidas en las regiones Eje Cafetero y Antioquia, Central, Caribe, y Pacífica, en la Amazonía y la región Llanos y Orinoquía, las actividades más afectadas pertenecen al sector agropecuario y minero. **** ABTRACT: This paper analyzes the regional economic differences on the impact of lockdown measures ordered by Colombia's national government to prevent the spread of COVID-19. Using an input-output model, we estimate the regional economic losses of extracting a group of formal and informal workers from different sectors of the economy. Results show regional differences in the impact of lockdown on labor markets, local economies, and its productive sectors. We find that peripheral regions (Amazonía, Caribe, Pacífica, and Llanos and Orinoquia) concentrate a higher number of informal workers in the group of employees in lockdown than the central regions (Eje Cafetero and Antioquia, and Central). Regarding economic impact, losses range between 5,4% of GDP for the region Amazonía to 6,3% for Eje Cafetero and Antioquia. Moreover, while the sector of services concentrates the highest losses in the regions Eje Cafetero and Antioquia, Central, Caribe, and Pacífica, in Amazonía, and Llanos and Orinoquia, the economic activities mostly affected belong to mining and agriculture.
    Keywords: COVID-19, matriz insumo-producto interregional, desarrollo regional, COVID-19, inter-regional input-output matrix, regional development
    JEL: R12 R15 R58
    Date: 2020–06
  8. By: Goldin, Adrián
    Abstract: En este documento se analizan las opciones de política para la adecuada regulación de la labor de los trabajadores que prestan servicios bajo demanda a través de aplicaciones de Internet en la Argentina y el fortalecimiento de las capacidades para hacer un uso inclusivo de las transformaciones digitales en curso. En este caso, el objeto de regulación no se refiere específicamente a la labor de trabajadores autónomos, aunque pueden serlo, ni de trabajadores dependientes, pero no cabe descartar que lo sean, ni de trabajadores pertenecientes a una ““tercera categoría”, que la normativa argentina no reconoce. La heterogeneidad implícita en este grupo de trabajadores impide una categorización uniforme en el sentido de la autonomía o la dependencia. El trabajador que se considere dependiente no debería ser privado de su derecho a reclamar esa condición, pero tampoco obligado a serlo para acceder a la protección de la ley. En este estudio se presenta un inventario comentado de los principales derechos y garantías que se proponen en la literatura comparada para garantizar la seguridad física de estos trabajadores y su acceso a condiciones de empleo decentes. Asimismo, se consideran las (escasas) normas de derecho positivo y los proyectos en curso de debate.
    Date: 2020–06–02

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