Tax evasion from cross-border fraud: does digitalization make a difference?

Emmanouil Kitsios, Joao Jalles and Geneviève Verdier

Applied Economics Letters, 2023, vol. 30, issue 10, 1400-1406

Abstract: How can governments reduce the prevalence of cross-border tax fraud? This paper argues that the use of digital technologies offers an opportunity to reduce fraud and increase government revenue. Using data on intra-EU and world trade transactions, we present evidence that (i) cross-border trade tax fraud is non-trivial and prevalent in many countries; (ii) such fraud can be alleviated by the use of digital technologies at the border; and (iii) potential revenue gains of digitalization from reducing trade fraud could be substantial. Halving the distance to the digitalization frontier could raise revenues by over 1.5% of GDP in low-income developing countries.

Date: 2023
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Working Paper: Tax Evasion from Cross-Border Fraud: Does Digitalization Make a Difference? (2020)
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DOI: 10.1080/13504851.2022.2056566

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