# **E Key descriptive statistics using tax records**

In this section we present a set of descriptive statistics related to our tax record only – meaning, before merging the distributions between survey and tax data, and before any adjustments to national account aggregates.

Counts of observations in our tax administrative records, separately presented by income source, are presented above in Table 1: in more recent years we observe halfmillion individuals receiving some form of income and/or listed as shareholders of a corporation filing income taxes in that year. Approximately 110,00 individuals each year file an income tax tax declaration, which is not mandatory for individuals whose sole income sources are withheld at source. In terms of individuals withheld at source, close to 120,000 are wage workers whose salaries are withheld by their employers; 45 - 50,000 are withheld for service provision activities; 200,000 for receiving some form of dividend<sup>5</sup> and 300,000 for receiving interest. Approximately 20 - 30,000 individuals each year declare capital gains, with the majority of them declaring very small amounts, and a few hundred file a separate declaration of rental income for individual properties. Between 90 - 100,000 individuals in recent years are also included in other types of third-party information for commercial activities, such as exports, sales through credit cards or sales to the government. As we discuss above, we use this data to compare self-reported amounts with third-party ones, and increase the imputed income to individuals according to the largest amount among the two sources. Finally, in most recent years we observe between 70,000 and 80,000 shareholders in firms that filed a CIT declaration, and are thus assigned non-zero income based on undistributed profits (profits net of dividend distribution).

In Figure E1a, we present the distribution of total income in the tax records, excluding the imputed undistributed profits. As we discuss in section 3, one key limitation of the administrative tax records we observe is the lack of information on wages and other labor income below the minimum threshold for filing income taxes - not only individuals receiving wages below that level are not required to file, but employers also we do not inform or withhold annualized wages below that threshold. In the figure, observe a peak of tax records precisely at the level of the filing threshold (right-most dashed line). We also illustrate, in the left-most dashed line, that the annualized minimum wage was significantly below that threshold, meaning that there is a large mass of workers receiving wages between these two levels that are not observed in the tax records. The smallest peak in the income distribution to the left of the minimum wage is comprised mostly of individuals receiving small amounts of income from dividends

> 5The large number of individuals receiving dividends is mostly driven by a few large corporations, often in the financial sector, distributing very small amounts of dividends to thousands of taxpayers. In that sense, the majority of these individuals are not active shareholders with meaningful participation in corporations.

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