Tax Compliance in India: An Experimental Approach

Suranjali Tandon and R. Kavita Rao ()
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R. Kavita Rao: National Institute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: The study presents an analysis of results of a laboratory experiment, conducted in 2015 to assess compliance behaviour in India. The experiment evaluates responses of 133 participants, to changes in key policy instruments like tax rate, penalty rate and audit probability. We find that changes in policy parameters generate varied responses across taxpayers. Audit probability is the only policy instrument that generates relatively consistent response. Further, the results show that individuals can be divided into those who respond to change in audit probability and those who respond to other policy variables, suggesting that no single policy would be adequate to induce suitable behavioural changes in all taxpayers.

Keywords: tax compliance; laboratory experiment; audit probability; tax rate,; penalty; exemption threshold; stigma (search for similar items in EconPapers)
JEL-codes: C91 H26 H3 (search for similar items in EconPapers)
Pages: 20
Date: 2017-11
New Economics Papers: this item is included in nep-acc, nep-exp, nep-iue, nep-ore and nep-pbe
Note: Working Paper 207, 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:npf:wpaper:17/207

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