nep-pub New Economics Papers
on Public Finance
Issue of 2007‒05‒04
two papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. "It's a lot but let it stay" How tax evasion is perceived across Italy By Carlo Fiorio; Alberto Zanardi
  2. Is the Value Added Tax Reform in India Poverty-Improving? An Analysis of Data from Two Major States By Ajitava Raychaudhuri; Sudip Kumar Sinha; Poulomi Roy

  1. By: Carlo Fiorio (University of Milan); Alberto Zanardi (University of Bologna)
    Abstract: We analyze the opinions regarding tax evasion using a sample of micro-data representative of the Italian population. The analysis of determinants of seriousness and size perceptions of tax evasion suggests that age, education, income, area of residence and occupation are all relevant variables. However, combining the analysis of size and seriousness of tax evasion another aspect of Italian duality emerges: notwithstanding its perceived large size, people from the South show a lower tax morale than in the rest of the country. Some possible explanations of these results are discussed.
    Keywords: tax evasion, perceptions, tax morale, social norms,
    Date: 2007–02–01
  2. By: Ajitava Raychaudhuri; Sudip Kumar Sinha; Poulomi Roy
    Abstract: The Value Added Tax (VAT) was introduced in India in place of Sales Tax, taking effect in April 1, 2005. These taxes are in the domain of different state governments within the country's federal set up. Although VAT is widely acclaimed to be a better system than the sales tax on grounds of efficiency in tax collection, no study has been undertaken to assess the impact of this reform measure on social equity. This paper addresses this need with the use of concentration curves and consumption dominance curves of various orders. The simulations were done on two major states in India, namely Maharashtra and West Bengal, using National Sample Survey Unit Level data for the 55th round. The results show that the reform is largely pro-poor, although there are ways to improve it with respect to some items predominantly consumed by the relatively poorer groups.
    Keywords: Value added tax, Marginal tax reform, public distribution system, concentration curve, Lorenz curve, marginal efficiency cost of funds, consumption dominance
    JEL: D12 D63 H21 H22 H71 I32
    Date: 2007

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