Taxpayer Behavior When Audit Rules Are Known: Evidence from Italy

Alessandro Santoro and Carlo V. Fiorio
Additional contact information
Carlo V. Fiorio: University of Milan and Econpubblica, Milan, Italy

Public Finance Review, 2011, vol. 39, issue 1, 103-123

Abstract: Italy adopted in 1998 a peculiar audit scheme (Studi di Settore), for small and medium enterprises and the self-employed. This scheme is based on a particular interaction between the tax agency and taxpayers, where the agency unveils only part of the information used to develop its audit rule. The authors study this scheme by means of a simple theoretical model and they test it using a sample of 23,000 firms in manufacturing sectors in the 2005 tax year. A number of theoretically relevant relations are confirmed. In particular, reports made by taxpayers seem to be positively associated to the firm’s size. When taxpayers know that the probability to be audited decreases, they tend to report less. Other factors that are expected to influence the behavior of taxpayers have no or an ambiguous impact on reporting behavior.

Keywords: audit; Italy; Studi di settore; tax evasion (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/1091142110386214 (text/html)

Related works:
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:sae:pubfin:v:39:y:2011:i:1:p:103-123

DOI: 10.1177/1091142110386214

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().