Clearing the bar: Improving tax compliance for small firms through target setting

• 成果类型: Article
• 署名作者: Al-Karablieh, Yazan; Koumanakos, Evangelos; Stantcheva, Stefanie
• 署名单位: Harvard University; Hellenic Open University; Center for Economic & Policy Research (CEPR); National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103452
• 发表日期: 2021
• 关键词: corporate tax; tax compliance; Tax amnesty; Tax avoidance; taxation

摘要

We use a new dataset of the universe of Greek corporate tax returns to study a voluntary tax compliance program for small firms. This self-assessment program prescribed target taxable profit margins (the ratio of taxable profits to revenues) for different types of activities. Firms that reported profit margins above these targets in a given year were exempt from audits in that year. We find that the firms that take up the program report significantly larger taxable profits than non-eligible firms, with some evidence for longer-lasting effects on tax reporting. Firms that take up the program for more years exhibit stronger effects. We also find that firms can easily and substantially manipulate reported revenue (decreasing it by up to 40%) to help meet prescribed profit margins without paying more in taxes. Overall, the program increased tax revenues collected from small firms, but points to a very large level of baseline under-reporting of profits and the ease of manipulating reported revenues. (c) 2021 Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http:// creativecommons.org/licenses/by-nc-nd/4.0/).