per day. However, the number of revisers and their scale is so small that the revisions increase total revenue by less than .5%.<sup>26</sup> The low response rate, osetting cost adjustments and marginal tax revenue gains of these desk audits are all consistent with the fact that the under-reporting rates in Table V are very similar when considering rms' initial returns rather than their nal returns, or earlier or later scal years.

This analysis has thus shown that, although misreporting compared to third-party information is present, its levels are moderate, probably due the deterrence eect of routine cross-checks, desk audits and other compliance interventions by the tax authorities. Perfectly enforcing reporting of third-party reported margins could increase income tax revenue by 10% in theory, but the realized eect of desk audits is orders of magnitude smaller.

# 4.3 Payment Compliance

To examine taxpayers' compliance with the obligation to pay their net tax liability, we match the income and sales tax returns with payment records from the D110 payment receipts. Importantly, the payment receipts display both the payment date and the tax period and taxpayer to which the payment corresponds, allowing us to exactly match payments with liabilities. To our knowledge, this is the rst attempt at estimating payment compliance for the income and sales tax, testing the previously implicit assumption that declared tax liabilities automatically translate into payments.<sup>27</sup> The relevant liability is the taxpayer's nal tax liability to be paid as per the nal (revised) tax returns, after deductions, advance payments and tax withheld have been subtracted.<sup>28</sup> We compare this liability to the tax payment that the taxpayer makes herself, excluding payments made by withholding agents and advance payments made by the taxpayer.<sup>29</sup> We then take the share of payment over liability for each taxpayer, and average this share across all taxpayers in each scal period.

The results are displayed in Figure III, where panel A corresponds to the income tax and panel B correspond to the sales tax, and red and blue lines correspond to corporations and self-employed respectively. In both panels, the average payment share is below 100% in all scal periods, and decreases as we consider more recent tax periods, dropping to 70% for the income tax and 85%

> 26Whether the desk audits improve reporting behavior in future tax periods is an open question that we currently study. More generally, whether it is optimal for the tax authorities to invest in desk audits rather than full audits or follow-up communications with non-lers or late-payers depends on the relative revenue elasticities of these dierent enforcement activities, in the spirit of Keen & Slemrod (2016).

> 27Del Carpio (2014) provides estimates of property tax compliance in Peru, which are conceptually dierent from our estimates as property taxes are assessed by the government and thus have no misreporting margin.

> 28Note that we use the net liability as derived on the rm's tax return, and taking into account only the amount of advance tax payments and tax withheld that the taxpayer chose to reclaim on her tax declaration.

> 29Including payments that are enforced retroactively by the tax authorities through administrative or judicial procedures makes little dierence to the results.

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