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.
Details
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Author
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Document Date
2018/05/22
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Document Type
Policy Research Working Paper
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Report Number
WPS8452
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2018/05/22
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Disclosure Status
Disclosed
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Doc Name
Technology, taxation, and corruption: evidence from the introduction of electronic tax filing
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Keywords
risk score; trade and competitiveness; tax payment; tax authorities; tax authority; amount of tax; treatment group; legal entity; legal entities; opportunities for corruption; high compliance costs; tax compliance cost; role of technology; focus group meeting; increase tax revenue; income tax withholding; measure of outcome; improving service delivery; exposure to information; corporate income tax; calculation of tax; tax policy change; reduction in tax; trade and services; medium sized business; tax administration system; tax administration process; access to computer; security of information; lack of awareness; tax declaration; baseline survey; Tax Evasion; logistical support; bribe payment; individual enterprise; tax liability; tax inspector; high tax; e-government initiative; tax collector; registration process; tax obligation; administrative datum; voluntary compliance; total tax; pay taxes; tax amount; survey data; individual entrepreneur; social program; turnover tax; tax preparation; telephone call; standard deviation; conceptual framework; audit adjustment; private information; response rate; state capacity; implementing partner; gross revenue; taxpayer response; business cost; quantitative data; taxation issues; experimental treatment; increasing transparency; monitoring compliance; transaction cost; legal requirement; electronic system; outcome data; causal impact; tax law; sample survey; Calculate Taxes; tax form; cost measurement; tax accounting; productive activity; national income; discount value; discount factor; public terminal; manual system; Performance Pay; registration procedure; online system; electronic declaration; customs corruption; Learning and Innovation Credit; sampling strategy; mean group; postal system; alternative measure; experimental design; development policy; open access; train operator; monthly payment; audit strategy; Public Goods; limited resources; business structure; basic model; risk criterion; strategic behavior; common feature; Tax Reform; government function; registration fee; online payment; double tax; robustness check; indicator variable; tax information; digital signature; study design; selection bias; record keeping; trade sector; tax records; primary reason; instrumental variable; outcome measure; social insurance; electronic bill; employee salary; business network; tax rate; court action; summary statistic
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Citation
Okunogbe,Oyebola Motunrayo Pouliquen,Victor Maurice Joseph
Technology, taxation, and corruption: evidence from the introduction of electronic tax filing (English). Policy Research working paper,no. WPS 8452,Impact Evaluation series Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/906671526994655975/Technology-taxation-and-corruption-evidence-from-the-introduction-of-electronic-tax-filing