Working Paper 09-10 - Shifting of red tape? The impact of authority behavior on tax compliance costs

Sebastian Eichfelder and Chantal Kegels

Working Papers from Federal Planning Bureau, Belgium

Abstract: The compliance costs of private taxpayers are not only affected by the tax law itself but also by its implementation through the tax authorities. In the following paper we analyze the effect of administrative actions on the compliance costs of private businesses. We demonstrate in a theoretical model that compliance costs may partially be interpreted as externalities of authority behavior. As a result we expect a "shifting"Â of administrative cost burdens from the tax administration to private taxpayers, what implies an economically inefficient outcome. Based on Belgian survey data, we find empirical evidence for the elucidated relationship. We give an quantitative estimate for the accordant effects and demonstrate, which activities of the administration are the most important cost drivers. Furthermore, we find empirical support that the effect of administrative issues is independent from the impact of the tax law itself.

Keywords: Administrative burdens; Compliance costs; Quality of tax administration (search for similar items in EconPapers)
JEL-codes: K29 L51 M20 (search for similar items in EconPapers)
Date: 2010-04-20
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.plan.be/uploaded/documents/201005110835260.wp201009.pdf english version (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Unavailable

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:fpb:wpaper:201009

Access Statistics for this paper

More papers in Working Papers from Federal Planning Bureau, Belgium Contact information at EDIRC.
Bibliographic data for series maintained by Dominique van der Wal ().