Corruption, Taxes and Compliance

Anja Baum, Sanjeev Gupta, Elijah Kimani and Sampawende Tapsoba

No 2017/255, IMF Working Papers from International Monetary Fund

Abstract: This paper revisits the effects of corruption on the state’s capacity to raise revenue, building on the existing empirical literature using new and more disaggregated data. We use a comprehensive dataset for 147 countries spanning 1995-2014, compiled by the IMF. It finds that—consistent with the existing literature—corruption is negatively associated with overall tax revenue, and most of its components. This relationship is predominantly influenced by the way corruption interacts with tax compliance. The establishment of large taxpayer offices improves tax compliance by dampening the perception of corruption, thereby boosting revenue.

Keywords: WP; tax; revenue; GDP; tax revenue (search for similar items in EconPapers)
Pages: 31
Date: 2017-11-17
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Citations: View citations in EconPapers (14)

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