Consumers as VAT “Evaders”: Incidence, Social Bias, and Correlates in Colombia

Leopoldo Fergusson, Carlos Molina () and Juan Riano

Economía Journal, 2019, vol. Volume 19 Number 2, issue Spring 2019, 21-67

Abstract: Tax evasion lies at the core of the relationship between citizens and the state: it reflects the level of trust in the state and compliance with society’s implicit social contract. However, empirically analyzing tax evasion is challenging, particularly because there are few direct and reliable measures. We conduct list experiments on a large sample of households to estimate how frequently consumers are willing to be complicit in value-added tax (VAT) evasion, as well as the extent of social desirability bias in respondent answers. Around 20 percent of respondents agree to make purchases without a receipt in order to avoid paying VAT; surprisingly, they are not ashamed to admit this openly. Evasion is more prevalent in places with more informality and less physical presence of the state, as well as among poorer, less educated individuals and those who disregard the rule of law.

Keywords: Tax evasion; value added tax; social desirability bias; list experiments (search for similar items in EconPapers)
JEL-codes: C83 C93 D73 H26 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://economia.lacea.org/contents.htm

Related works:
Working Paper: Consumers as VAT "evaders": incidence, social bias, and correlates in Colombia (2019)
Working Paper: I evade taxes, and so what? A new database and evidence from Colombia (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:col:000425:017276

Access Statistics for this article

More articles in Economía Journal from The Latin American and Caribbean Economic Association - LACEA Contact information at EDIRC.
Bibliographic data for series maintained by LACEA ().