TAX EVASION AND ADMINISTRATIVE COSTS

Rohit Prasad
Additional contact information
Rohit Prasad: Management Development Institute, PO No. 60, Mehrauli Rd, Sukhrali, Gurgaon 122001, India

Chapter 17 in New and Enduring Themes in Development Economics, 2009, pp 401-428 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThis paper seeks to find if there is any merit in the position that tax evasion is justified in the presence of a leakage of taxpayers' money. Tax is modeled as a simple redistribution from entrepreneurs to workers. The conclusions are that in an indirect tax regime, an increase in the administrative cost coefficient warrants an increase in the tax evasion coefficient in order to maintain the welfare obtained at the lower administrative cost. However in a direct tax regime, an increase in the administrative cost coefficient must be accompanied by a decrease in the tax evasion coefficient in order to maintain the level of profit or the level of worker utility obtained at the lower administrative cost. With direct taxes, the levels of both profits as well utility cannot be simultaneously preserved with a higher administrative cost coefficient.

Keywords: Development Economics; Happiness; Well-Being; Political Economy; Economic of Labour; Agricultural Economics (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789812839428_0017 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789812839428_0017 (text/html)
Ebook Access is available upon purchase.

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:wsi:wschap:9789812839428_0017

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().