Corruption and tax evasion an optimal policy

Mohamed Jellal () and Mohamed Bouzahzah

MPRA Paper from University Library of Munich, Germany

Abstract: Under Principal-Agent-Supervisor paradigm, we examine in this paper how a tax collection agency changes optimal schemes in order to lessen the occurrence of corruption between the tax collector and the taxpayer. The Principal, who maximizes the expected net fiscal revenue, reacts by decreasing tax rates when the supervisor is likely to engage in corrupt transaction with taxpayer.The combat against collusion and corruption may explain the greater reliance on indirect taxes than on direct taxes both in developed and developing countries like Morocco.

Keywords: Principal; Supervisor; Agent; Corruption; Tax Evasion (search for similar items in EconPapers)
JEL-codes: D73 D82 H2 H26 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-acc, nep-cta, nep-iue and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:38813

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