Missing Miles: Evasion Responses to Car Taxes

Jarkko Harju, Tuomas Kosonen and Joel Slemrod

No 123, Working Papers from VATT Institute for Economic Research

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 uncover true odometer readings, and the results suggest that thirdparty reporting reduces evasion.

Keywords: car tax; tax evasion; enforcement measures; Social security; taxation and inequality; H21; H23; H26; C93; Energia; ilmasto ja ympäristö; Verotus (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://www.doria.fi/handle/10024/171355

Related works:
Journal Article: Missing miles: Evasion responses to car taxes (2020)
Working Paper: Missing Miles: Evasion Responses to Car Taxes (2017)
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