Tax Enforcement and Welfare

ABSTRACT Using a new hand-collected database on state department of revenue (DOR) expenditures, this study examines the association between changes in state corporate tax enforcement expenditures and state-level tax collections during the 2000–2008 time period. The results, after addressing endogeneity concerns using a changes specification and state fixed effects, suggest a $1 increase (decrease) in current period corporate enforcement is associated with an $8 to $11 increase (decrease) in state tax collections two years into the future. The association appears to be attenuated in states with restrictive tax policies (i.e., unitary/combined reporting and related-party add-back provisions) suggesting that enforcement and restrictive tax policies could serve as substitutes. JEL Classifications: H26; H71; H72. Data Availability: Enforcement data were hand collected from state revenue department annual reports and by contacting state corporate income tax personnel. All annual reports are publicly available.

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De Jure vs De Facto Tax Enforcement: Evidence from Indonesia

AEA Randomized Controlled Trials ◽

10.1257/rct.8056 ◽

2021 ◽

Author(s):

Benjamin Olken ◽

Claire Walsh ◽

Rema Hanna

Keyword(s):

Tax Enforcement

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The Origins of Voluntary Compliance: Attitudes toward Taxation in Urban Nigeria

British Journal of Political Science ◽

10.1017/s000712341400026x ◽

2014 ◽

Vol 46 (1) ◽

pp. 215-238 ◽

Cited By ~ 41

Author(s):

Cristina Bodea ◽

Adrienne LeBas

Keyword(s):

Social Context ◽

Social Norms ◽

Public Goods ◽

Exchange Mechanism ◽

Positive Experience ◽

Public Goods Provision ◽

Tax Enforcement ◽

Services Delivery ◽

Voluntary Compliance ◽

Tax Regimes

Voluntary compliance is an important aspect of strong tax regimes, but there is limited understanding of how social norms favoring compliance emerge. Using novel data from urban Nigeria, where tax enforcement is weak, this article shows that individuals with a positive experience of state services delivery are more likely to express belief in an unconditioned citizen obligation to pay tax. In addition to support for this fiscal exchange mechanism, social context is consequential. Where individuals have access to community-provided goods, which may substitute for effective state services provision, they are less likely to adopt pro-compliance norms. Finally, the article shows that norm adoption increases tax payment. These findings have broad implications for literatures on state formation, taxation and public goods provision.

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