No taxation without information
Subtitle: deterrence and self-enforcement in the Value Added Tax
By: Dina Pomeranz
Contributors: Harvard Business School
Edition: Revised edition
Series: Working paper / Harvard Business School -- 13-057; Working paper (Harvard Business School) -- 13-057
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston]
Language: eng
Number of pages: 48
Description: Claims that the VAT facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread VAT adoption worldwide, but there is surprisingly little evidence. This paper analyzes the role of third party information for VAT enforcement through two randomized experiments among over 400,000 Chilean firms. Announcing additional monitoring has less impact on transactions that are subject to a paper trail, indicating the paper trail's preventive deterrence effect. This leads to strong enforcement spillovers up the VAT chain. These findings confirm that when taking evasion into account, significant differences emerge between otherwise equivalent forms of taxation.
Notes: "December 2012. (Revised April 2013.)" -- Publisher's website.

Includes bibliographical references (pages 27-29).