ABSTRACT: Tax auditing parameters have been largely overlooked by the literature as policy-making instruments of any relevance; however, enforcement strategies are critical elements of the tax burden. In this paper we show that, in a federal framework, tax auditing policies can serve as additional tools for regional interaction. We examine the presence of this interaction by adopting a spatial econometric approach. We employ a spatial panel autoregressive model and obtain results that are congruent with standard theory, corroborating the presence of horizontal competition between regions in their tax auditing policies. We also find that once regional governments acquire legal power, the opaque competition in enforcement policies appears to switch in part to a more transparent competition in statutory tax parameters.
ABSTRACT: The literature on horizontal tax interdependence pays limited attention to interactions in administrative policies, although they can play a large role in determining the amount of tax revenues collected. We investigate the incentives for sub-central tax authority cooperation in a decentralized context, with the aim of identifying the determinants of that cooperation. Our results are congruent with standard theory; in particular, the existence of reciprocity is essential for sharing tax information, but there is sluggishness in this process, which is partly the result of the short-sighted behaviour of tax authorities influenced by budget constraints. Hence, this is good news for the functioning of a decentralized tax administration, as in the medium-long run the gains to be made from sharing tax information are achieved.
ABSTRACT: This paper analyses the impact of terrorism on tax enforcement policies by focusing on the case of the Basque Country. The presence of externalities in tax administration attributable to the costs of terrorism is investigated by undertaking a theoretical analysis. The findings of this are tested using Spanish data extracted from repeated surveys and other sources. By employing ordered response models, evidence is found of the negative impact of terrorism on tax enforcement as it is perceived by residents in the Basque Country and Navarre. In particular, this impact is found to be stronger for entrepreneurs and liberal professionals. No significant impact is found for individuals resident in the rest of Spain.
Durán-Cabré, J.M., Esteller-Moré, A. and L. Salvadori (2018): “DOES THE TAX ADMINISTRATION PLAY AN UNFAIR GAMBLE WITH TAXPAYERS? EVIDENCE FROM SURVEY DATA”, Working Papers of the Institute of Fiscal Studies (IEF), forthcoming.
ABSTRACT: In this paper we investigate the impact of the economic cycle on tax enforcement. With this aim, we sketch a theoretical model based on Andreoni (1992) to raise our main hypotheses: the presence of financial constraints faced by taxpayers can play a crucial role in defining the optimal tax enforcement response to an economic shock. In particular, in absence of severe financial constraints, tax administration finds it optimal to set tax enforcement in a counter-cyclical way, while when taxpayers face a severe financial downturn, pro-cyclicity cannot be ruled-out. We test these hypotheses by means of ordered response models applied to Spanish survey data and find results that are coherent with theory. Tax enforcement, as it is perceived by individuals, presents a prevailing countercyclical trend, but in presence of severe economic crisis turns out to be pro-cyclical.
Durán-Cabré J.M., A. Esteller-Moré, Mas-Montserrat, M. and L. Salvadori (2018): “ESTIMATING THE TAX GAP: A CASE STUDY OF CATALAN DECENTRALIZED TAXES” (in Spanish), Working Papers of the IEB, 2018/15.
ABSTRACT: The tax gap can be defined as the difference between the total amount of taxes collected by tax authorities and the total tax revenues that should be collected according to the tax code and under perfect tax compliance. The estimation of the tax gap offers very useful information about the relative size and nature of non-compliance, as well as its evolution over time. In this paper we point out that the tax gap is a valuable instrument not only to define the enforcement strategies of the tax administration but also to enhance the accountability of this public authority. Nonetheless, the methodology employed to estimate the tax gap and consequently the interpretation of the results of this assessment are subject to limitations that are discussed in the paper. Moreover, we present the methodology to estimate the tax gap in Catalonia for the three most important taxes related to wealth (wealth tax, inheritance and gift tax and transfer tax) administered by the Spanish regions and, finally, we provide the results from the estimations obtained employing microdata.
Work in progress:
“EMPIRICAL EVIDENCE ON VAT TAX ENFORCEMENT INTERDEPENDENCIES BETWEEN EU MEMBER COUNTRIES”, work in progress.
“DOES TAX KNOWLEDGE IMPACT ATTITUDES TOWARDS THE TAX SYSTEM AND TAX EXPENDITURE? EVIDENCE FROM A RDD CASE STUDY OF SPAIN”, work in progress.
“ANÁLISIS ECONOMICO DE LA ADMINISTRACIÓN TRIBUTARIA” with Durán-Cabré J.M., Papeles de Económia Española, November 2017, 154,112-130.
“REGIONALISMO DIFFERENZIATO E RISORSE FINANZIARIE” with Arachi, G., Éupolis Policy Paper 17/9, November 2017.
“TAX ADMINISTRATION AND TAX AUTONOMY”, Info IEB 2015/22.
“DONNE AL VERTICE DELLE IMPRESE E AZIONI POSITIVE: UNA SINTESI”, with Alessandra Casarico and Paola Profeta, Econpubblica Short Note n.7, November 2009.
“PENSION SYSTEMS IN A GENDER PERSPECTIVE”, mimeo (2009).
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