Do lower taxes reduce informality? Evidence from Brazil

• 成果类型: Article
• 署名作者: Rocha, Rudi; Ulyssea, Gabriel; Rachter, Laisa
• 署名单位: Getulio Vargas Foundation; University of Oxford; Getulio Vargas Foundation
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2018.04.003
• 发表日期: 2018
• 页码: 28-49
• 关键词: Taxes; informality; Firm creation

摘要

We exploit a unique, large-scale formalization program in Brazil to estimate the effects of reducing the costs of formality on firm formalization. We rely on both firm-level administrative data and individual panel data to show that reducing taxes once registration costs have already been eliminated reduces firm informality. This effect comes from the formalization of existing informal firms, and not from the creation of new formal businesses nor greater formal firm survival. The implied formalization elasticity is otherwise low, and our cost-benefit analysis indicates that the program led to net losses in tax revenues.