Tax evasion and tax amnesties in regional taxation

Andrea Angeli (), Patrizia Lattarulo (), Eugenio Palmieri () and Maria Grazia Pazienza
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Andrea Angeli: Regional Institute for Economic Planning of Tuscany (IRPET)
Patrizia Lattarulo: Regional Institute for Economic Planning of Tuscany (IRPET)
Eugenio Palmieri: Università di Firenze

Economia Politica: Journal of Analytical and Institutional Economics, 2023, vol. 40, issue 1, No 13, 343-369

Abstract: Abstract Italian governments have frequently chosen tax amnesties or concessions, with the twofold purpose of creating new budget resources and cancelling irredeemable debts. Such course of action constitutes a “shortcut” policy in terms of fighting tax evasion, which is a matter less popular among voters and more demanding in terms of efficiency and political continuity. This paper investigates the effects of the 2016–2019 tax concession, bringing empirical evidence based on the car tax paid to the Tuscany Region. The car tax is the main source of regional fiscal autonomy in Italy. In terms of revenue recovery, we found a net amount of only 1.6% of the unpaid taxes accrued. A difference-in-difference (DiD) analysis of the effects on compliance showed that those who took advantage of the tax amnesty in the past, when cheating again, were more likely to default on their tax debts, as compared to those who did not join the amnesty program. Therefore, our analysis provides original evidence of a very low budget recovery and confirms the results of literature according to which tax amnesties impact negatively on taxpayers’ behaviour.

Keywords: Tax amnesty; Tax evasion; Vehicle tax; Regional tax; DiD analysis (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40888-023-00297-9

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