Technology, taxation, and corruption: evidence from the introduction of electronic tax filing

Okunogbe, Oyebola Motunrayo, Pouliquen, Victor
Authors registered in the RePEc Author Service: Victor Pouliquen and Oyebola Okunogbe

No 8452, Policy Research Working Paper Series from The World Bank

Abstract: Many e-government initiatives introduce technology to improve efficiency and avoid potential human bias. Electronic tax filing e-filing) is an important example, as developing countries increasingly adopt online submission of tax declarations to replace in-person submission to tax officials. This paper examines the impact of e-filing on compliance costs, tax payments, and bribe payments using experimental variation and data from Tajikistan firms. Firms that e-file have lower compliance costs, spending five fewer hours each month on fulfilling tax obligations. There are no significant average effects of e-filing on tax or bribe payments, but significant heterogeneity exists across firms by their baseline likelihood of tax evasion. Among firms previously more likely to evade, e-filing doubles tax payments, likely by disrupting collusion with officials. Conversely, among firms less likely to have been evading, e-filing reduces tax payments, suggesting that officials had previously required them to pay more. These firms also pay fewer bribes, as e-filing reduces opportunity for extortion. In all, the results indicate that e-filing reduces compliance costs and makes the distribution of tax payments across firms arguably more equitable.

Keywords: De Facto Governments; Democratic Government; E-Government; E-Government; E-Government; Economic Adjustment and Lending; Economics and Finance of Public Institution Development; International Trade and Trade Rules; Macro-Fiscal Policy; Public Finance Decentralization and Poverty Reduction; Public Sector Administrative & Civil Service Reform; Public Sector Administrative and Civil Service Reform; Public Sector Economics; Tax Administration; Tax Law; Taxation & Subsidies (search for similar items in EconPapers)
Date: 2018-05-22
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Technology, Taxation, and Corruption: Evidence from the Introduction of Electronic Tax Filing (2022)
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