Cashless Payments and Tax Evasion

Giovanni Immordino and Francesco Flaviano Russo ()
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Francesco Flaviano Russo: Università di Napoli Federico II and CSEF

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Cashless payments hinder tax evasion because they build a trail for the underlying transactions. We find empirical evidence supporting this claim for Europe, showing a negative relationship between VAT evasion and the payments with credit and debit cards. We also find that using electronic cards to gather cash at ATMs, by making cash more abundant, fosters VAT evasion. Policies aimed at reducing tax evasion should therefore subsidize the direct use of electronic cards as payments, not their possession.

Keywords: tax evasion; electronic payments. (search for similar items in EconPapers)
JEL-codes: H26 O17 (search for similar items in EconPapers)
Date: 2016-06-17
New Economics Papers: this item is included in nep-iue, nep-pay, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published in European Journal of Political Economy, 2018, 55, 36-43

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http://www.csef.it/WP/wp445.pdf (application/pdf)

Related works:
Journal Article: Cashless payments and tax evasion (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:445

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