Tax collection efficiency in OECD countries improves via decentralization, simplification, digitalization and education

Yolanda Ubago Martínez, Pedro Pascual Arzoz and Idoia Zabaleta Arregui

Journal of Policy Modeling, 2022, vol. 44, issue 2, 298-318

Abstract: This paper offers an assessment of tax administration performance and provides evidence of the relationship between fiscal decentralization (and tax structure) and the technical efficiency of tax collection. The initial stage of the investigation consists of a data envelopment analysis (DEA) to obtain technical efficiency estimates for a sample of 28 OECD countries over the period 2004–2017. In a second stage, we explore how technical efficiency is affected by fiscal decentralization and tax structure variables. The results show how the degree of fiscal decentralization has a positive and significant impact on the technical efficiency of tax collection. They also reveal a relevant role of tax structure choices and the ratio of indirect to direct taxes, which can significantly affect tax collection efficiency. Finally, we extract some policy implications.

Keywords: Efficiency; Tax collection; Decentralization (search for similar items in EconPapers)
JEL-codes: H21 H26 H30 H83 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:44:y:2022:i:2:p:298-318

DOI: 10.1016/j.jpolmod.2022.03.003

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