Coming out of the shadows? Estimating the impact of bureaucracy simplification and tax cut on formality in Brazilian microenterprises

Joana C.M. Monteiro and Juliano J. Assunção

Journal of Development Economics, 2012, vol. 99, issue 1, 105-115

Abstract: This paper evaluates the impact of a program of bureaucracy simplification and tax reduction on formality among Brazilian microenterprises — the SIMPLES program. We document an increase of 13 percentage points in formal licensing among retail firms created after the program when compared to firms in ineligible sectors. The impact on retailers is robust to a series of tests. We find no impact on construction, transportation, services and manufacturing sectors.

Keywords: Informal economy; Tax legislation; Bureaucracy (search for similar items in EconPapers)
JEL-codes: D73 E26 K34 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (77)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:99:y:2012:i:1:p:105-115

DOI: 10.1016/j.jdeveco.2011.10.002

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