By: |
Junmin Wan (Osaka University) |
Abstract: |
We examine the validity of a new system of taxation called lottery receipts in
China theoretically and empirically. Tax collection is difficult as the
government difficultly monitors the actual economic dealings. To bring out the
private information on transaction known only to a seller and a buyer, the
government has set up a lottery receipt system which has been tried out in
many areas. If the net revenue from a lottery receipt is invested in pure
public goods, the lottery receipt will been purchased even if the consumer has
expected quasi-linear utility. By issuing a lottery receipt, the government
may prevent tax evasion caused by conspiracies between consumers and firms and
collect tax effectively. Estimation is performed based on panel data for
different periods from a total of 37 districts in Beijing and Tianjin during
1998-2003. The lottery receipt experiment has significantly raised the
business tax, the growths of business tax and total tax revenues. |
Keywords: |
tax evasion, business tax, lottery receipt experiment, random trend (growth) model |
JEL: |
H26 D81 D82 |
Date: |
2006–09 |
URL: |
http://d.repec.org/n?u=RePEc:osk:wpaper:0625&r=tra |