The Italian Blitz: a natural experiment on audit publicity and tax compliance

Pietro Battiston, Denvil Duncan, Simona Gamba and Alessandro Santoro

No 2016-10, FBK-IRVAPP Working Papers from Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation

Abstract: Tax evasion is a major problem faced by governments across the world, and many strategies have been attempted to minimize its extent. One such strategy is the “fiscal blitz”, consisting in clusters of unexpected tax verification activities targeting businesses. Blitzes have been widely implemented in Italy: the ones taking place in the last years shared many common features, but differed in the level of publicity they received on the media. We use confidential data on Value Added Tax payments at the sector level in two cities to estimate the effect of such publicity on tax compliance of local sellers. By employing a Difference-in-Differences identification strategy, we find that the publicity of the blitz has a positive effect on fiscal declarations made shortly after. The results suggest that increasing awareness on future audits via the media can be an important instrument in the hands of tax authorities.

Keywords: Tax evasion; Natural experiment; Audit publicity (search for similar items in EconPapers)
JEL-codes: E62 H32 K34 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-acc, nep-cse, nep-eur, nep-iue, nep-law, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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