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Technology and tax compliance spillovers: Evidence from a VAT e-invoicing reform in Peru

Matthieu Bellon, Era Dabla-Norris and Salma Khalid

Journal of Economic Behavior & Organization, 2023, vol. 212, issue C, 756-777

Abstract: Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who have been mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms, consistent with incentives in the VAT system. Trading partners of firms who have been mandated to adopt e-invoicing report lower taxable purchases. Transaction-level data suggests that this decline comes from the termination of firm-supplier relationships. Lower purchases result in lower VAT credits, and higher VAT payments following the reform, suggesting positive tax compliance spillovers.

Keywords: VAT; Tax compliance; Technology spillovers; Firm transaction data (search for similar items in EconPapers)
JEL-codes: D22 H25 H26 L14 L25 O17 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:212:y:2023:i:c:p:756-777

DOI: 10.1016/j.jebo.2023.06.004

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