Technology, taxation, and corruption: evidence from the introduction of electronic tax filing

Oyebola Okunogbe and Victor Pouliquen

No 8452, Policy Research Working Paper Series from The World Bank

Abstract: Many e-government initiatives introduce technology to improve efficiency and avoid potential human bias. Electronic tax filing (e-filing) is an important example, as developing countries increasingly adopt online submission of tax declarations to replace in-person submission to tax officials. This paper examines the impact of e-filing on compliance costs, tax payments, and bribe payments using experimental variation and data from Tajikistan firms. Firms that e-file have lower compliance costs, spending five fewer hours each month on fulfilling tax obligations. There are no significant average effects of e-filing on tax or bribe payments, but significant heterogeneity exists across firms by their baseline likelihood of tax evasion. Among firms previously more likely to evade, e-filing doubles tax payments, likely by disrupting collusion with officials. Conversely, among firms less likely to have been evading, e-filing reduces tax payments, suggesting that officials had previously required them to pay more. These firms also pay fewer bribes, as e-filing reduces opportunity for extortion. In all, the results indicate that e-filing reduces compliance costs and makes the distribution of tax payments across firms arguably more equitable.

Keywords: Economic Adjustment and Lending; Macro-Fiscal Policy; Taxation&Subsidies; Tax Administration; Tax Law; Public Finance Decentralization and Poverty Reduction; Public Sector Economics; De Facto Governments; E-Government; Economics and Finance of Public Institution Development; E-Government; Public Sector Administrative and Civil Service Reform; Public Sector Administrative&Civil Service Reform; Democratic Government; E-Government; International Trade and Trade Rules (search for similar items in EconPapers)
Date: 2018-05-22
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Technology, Taxation, and Corruption: Evidence from the Introduction of Electronic Tax Filing (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:8452

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