Inter-municipal cooperation and tax enforcement capabilities

Naruki Notsu, Haruaki Hirota and Nobuo Akai
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Naruki Notsu: Osaka School of International Public Policy, Osaka University
Haruaki Hirota: Faculty of Economics, Musashi University
Nobuo Akai: Osaka School of International Public Policy, Osaka University

No 24E004, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: This study examines the effects of enhancing the tax enforcement of administration on the tax gap, focusing on inter-municipal cooperation (IMC). IMC refers to collaborative tax collection efforts among multiple municipalities and promotes the aggregation of tax collection resources and expertise, improving tax enforcement. Using the time variation in IMC creation across municipalities, we show that IMC substantially improves the tax gap measurement by reinforcing tax enforcement in local governments. The effects also appear to be driven at both the inter-municipal organization and municipal official levels. Our findings suggest that enhanced administrative capability in tax enforcement can be an effective tool against noncompliance in ways other than facilitating voluntary compliance.

Keywords: Inter-municipal cooperation; Tax enforcement; Tax compliance (search for similar items in EconPapers)
JEL-codes: H71 H77 H83 (search for similar items in EconPapers)
Pages: 34pages
Date: 2024-06
New Economics Papers: this item is included in nep-iue, nep-pbe, nep-pub and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:osp:wpaper:24e004

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