Misreporting in the Norwegian business cash support scheme

Dinara Alpysbayeva, Annette Alstadsæter, Wojciech Kopczuk, Simen Markussen and Oddbjørn Raaum
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Simen Markussen: Norwegian University of Life Sciences
Oddbjørn Raaum: Norwegian University of Life Sciences

International Tax and Public Finance, 2024, vol. 31, issue 6, No 2, 1463-1493

Abstract: Abstract We analyze the reporting response to an ambitiously targeted government support scheme for Norwegian businesses at the very start of the Coronavirus crisis in 2020. Our empirical design is based on cross-checking self-reported data in the applications for support with administratively reported data used for VAT. We find strong evidence that strategic misreporting was present but conclude that its remaining quantitative extent after enforcement actions already taken by the tax authorities was relatively small. Firms tend to misreport 4% more often than expected, and the actual support paid out was 5% higher than it should have been. We discuss possible reasons for the relatively limited extent of non-compliance and more general lessons for the design of transfer programs.

Keywords: Government support programs; Policy design; Cash transfers; Firm behavior; Misreporting; COVID-19 (search for similar items in EconPapers)
JEL-codes: E61 H25 H32 M48 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10797-024-09857-6

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