Empirical evidence on tax cooperation between sub-central administrations

Jose M. Duran-Cabre, Alejandro Esteller-Moré () and Luca Salvadori ()
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Alejandro Esteller-Moré: Universidad de Barcelona & IEB
Luca Salvadori: Universidad de Barcelona & IEB, TARC

No 2015/7, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: The literature on horizontal tax interdependence pays limited attention to interactions in administrative policies, although they can play a large role in determining the amount of tax revenues collected. We investigate the incentives for sub-central tax authority cooperation in a decentralized context, with the aim of identifying the determinants of that cooperation. Our results are congruent with standard theory; in particular, the existence of reciprocity is essential for sharing tax information, but there is sluggishness in this process, which is partly the result of the short-sighted behaviour of tax authorities influenced by budget constraints. Hence, this is good news for the functioning of a decentralized tax administration, as in the medium-long run the gains to be made from sharing tax information are achieved.

Keywords: Tax information sharing; reciprocity; fiscal federalism (search for similar items in EconPapers)
JEL-codes: H71 H77 H83 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015
New Economics Papers: this item is included in nep-pbe and nep-pub
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Citations: View citations in EconPapers (3)

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