Digitalization and Tax Compliance Spillovers: Evidence from a VAT e-Invoicing Reform in Peru

Matthieu Bellon, Era Dabla-Norris, Salma Khalid, Juan Carlos Paliza, Jillie Chang and Pilar Villena

No 2022/057, IMF Working Papers from International Monetary Fund

Abstract: Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms.

Keywords: VAT; tax compliance; technology spillovers; firm transaction data; transaction data; tax compliance Spillovers; downstream partner; technology adoption spillover; technology spillover; export-oriented firm; Value-added tax; Tax return filing compliance; Spillovers; Positive spillovers; Tax spillovers; Caribbean (search for similar items in EconPapers)
Pages: 40
Date: 2022-03-18
New Economics Papers: this item is included in nep-bec, nep-ict, nep-iue, nep-pbe and nep-pub
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Citations: View citations in EconPapers (4)

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