Revealing Tax Evasion
This paper examines the pervasiveness of tax evasion among firms in Indonesia and the characteristics associated with higher levels of noncompliance. Tax evasion is estimated through a randomized, double-list experiment embedded in a nationally representative survey of 2,955 registered firms. This revealed whether firms pay all the taxes they owe without them having to disclose this directly. Across both list experiments, around a quarter of the firms indirectly reveal that they have evaded taxes. Firms that do not export, face intense competition from informal firms, and believe tax administration is a major obstacle to their business are the most likely to evade taxes. These findings help to inform the enforcement activities of tax authorities in middle-income countries, which face substantial challenges in estimating levels of tax evasion and identifying noncompliant taxpayers.
| Main Authors: | , , |
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| Format: | Working Paper biblioteca |
| Language: | English en_US |
| Published: |
Washington, DC: World Bank
2024-07-24
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| Subjects: | TAX EVASION, EXPERIMENT, FIRMS, PUBLIC FINANCE, COMPLIANCE, INDUSTRY, INNOVATION AND INFRASTRUCTURE, SDG 9, DECENT WORK AND ECONOMIC GROWTH, SDG 8, |
| Online Access: | http://documents.worldbank.org/curated/en/099358407222411531/IDU18ac8f51d1c91e14f751936b1e28e9f364a0b https://hdl.handle.net/10986/41944 |
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| Summary: | This paper examines the pervasiveness
of tax evasion among firms in Indonesia and the
characteristics associated with higher levels of
noncompliance. Tax evasion is estimated through a
randomized, double-list experiment embedded in a nationally
representative survey of 2,955 registered firms. This
revealed whether firms pay all the taxes they owe without
them having to disclose this directly. Across both list
experiments, around a quarter of the firms indirectly reveal
that they have evaded taxes. Firms that do not export, face
intense competition from informal firms, and believe tax
administration is a major obstacle to their business are the
most likely to evade taxes. These findings help to inform
the enforcement activities of tax authorities in
middle-income countries, which face substantial challenges
in estimating levels of tax evasion and identifying
noncompliant taxpayers. |
|---|