Missing miles: Evasion responses to car taxes

Jarkko Harju, Tuomas Kosonen and Joel Slemrod

Journal of Public Economics, 2020, vol. 181, issue C

Abstract: We study a tax evasion response to car taxes in Finland, where used car importers overstate the mileage to reduce tax liability. First, we develop a tax evasion measure by comparing reported mileage upon import with subsequent information from vehicle inspections, and find that a decline in mileage — “missing miles” — occurs frequently. Second, we analyze a tax rate increase, and observe a reduction in the number of imported used cars, but only among non-evaders. Finally, we analyze an RCT informing some potential importers about a program of inspections that uncovers true odometer readings, and the results suggest that third-party reporting reduces evasion.

Keywords: Car tax; Tax evasion; Enforcement measures (search for similar items in EconPapers)
JEL-codes: C93 H21 H23 H26 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Missing Miles: Evasion Responses to Car Taxes (2019)
Working Paper: Missing Miles: Evasion Responses to Car Taxes (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:181:y:2020:i:c:s0047272719301707

DOI: 10.1016/j.jpubeco.2019.104108

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