Consumers as tax auditors

Joana Naritomi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: To investigate the enforcement value of third-party information on potentially collusive taxpayers, I study an anti-tax evasion program that rewards consumers for ensuring that firms report sales and establishes a verification system to aid whistle-blowing consumers in São Paulo, Brazil (Nota Fiscal Paulista). Firms reported sales increased by at least 21 percent over 4 years. The results are consistent with fixed costs of concealing collusion, increased detection probability from whistle-blower threats, and with behavioral biases associated with lotteries amplifying the enforcement value of the program. Although firms increased reported expenses, tax revenue net of rewards increased by 9.3 percent.

JEL-codes: H25 H26 L25 O14 O17 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2019-09-01
New Economics Papers: this item is included in nep-acc, nep-iue and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (94)

Published in American Economic Review, 1, September, 2019, 109(9), pp. 3031 - 3072. ISSN: 0002-8282

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http://eprints.lse.ac.uk/101538/ Open access version. (application/pdf)

Related works:
Journal Article: Consumers as Tax Auditors (2019)
Working Paper: Consumers as Tax Auditors (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:101538

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