Aggregate effects of imperfect tax enforcement
This paper studies an economy in which the government is not able to perfectly enforce tax compliance among operating firms, and compares it with a similar economy but with perfect tax enforcement. I develop a competitive general equilibrium model where imperfect tax enforcement may affect aggregate...
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| Formato: | Artículo preliminar |
| Lenguaje: | Inglés |
| Publicado: |
International Food Policy Research Institute
2009
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| Acceso en línea: | https://hdl.handle.net/10568/161815 |
| _version_ | 1855523861006647296 |
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| author | Robles, Miguel |
| author_browse | Robles, Miguel |
| author_facet | Robles, Miguel |
| author_sort | Robles, Miguel |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper studies an economy in which the government is not able to perfectly enforce tax compliance among operating firms, and compares it with a similar economy but with perfect tax enforcement. I develop a competitive general equilibrium model where imperfect tax enforcement may affect aggregate outcomes through two mechanisms. First, it may distort firms' optimal output level as long as the probability of avoiding tax compliance is related to the firm's size. Second, poor tax enforcement may lead to a low provision of the public goods that complement firms' productivity. The results for a calibrated version of the model suggest that in economies with tax enforcement problems, aggregate output might be reduced by 12 percent. I also conclude that sizable aggregate effects can be obtained only when the public goods mechanism is at work. |
| format | Artículo preliminar |
| id | CGSpace161815 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2009 |
| publishDateRange | 2009 |
| publishDateSort | 2009 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1618152025-11-06T06:05:08Z Aggregate effects of imperfect tax enforcement Robles, Miguel taxes public goods informal sector firm size social protection institutions economic development infrastructure This paper studies an economy in which the government is not able to perfectly enforce tax compliance among operating firms, and compares it with a similar economy but with perfect tax enforcement. I develop a competitive general equilibrium model where imperfect tax enforcement may affect aggregate outcomes through two mechanisms. First, it may distort firms' optimal output level as long as the probability of avoiding tax compliance is related to the firm's size. Second, poor tax enforcement may lead to a low provision of the public goods that complement firms' productivity. The results for a calibrated version of the model suggest that in economies with tax enforcement problems, aggregate output might be reduced by 12 percent. I also conclude that sizable aggregate effects can be obtained only when the public goods mechanism is at work. 2009 2024-11-21T09:58:28Z 2024-11-21T09:58:28Z Working Paper https://hdl.handle.net/10568/161815 en Open Access application/pdf International Food Policy Research Institute Robles, Miguel. 2009. Aggregate effects of imperfect tax enforcement. IFPRI Discussion Paper 845. https://hdl.handle.net/10568/161815 |
| spellingShingle | taxes public goods informal sector firm size social protection institutions economic development infrastructure Robles, Miguel Aggregate effects of imperfect tax enforcement |
| title | Aggregate effects of imperfect tax enforcement |
| title_full | Aggregate effects of imperfect tax enforcement |
| title_fullStr | Aggregate effects of imperfect tax enforcement |
| title_full_unstemmed | Aggregate effects of imperfect tax enforcement |
| title_short | Aggregate effects of imperfect tax enforcement |
| title_sort | aggregate effects of imperfect tax enforcement |
| topic | taxes public goods informal sector firm size social protection institutions economic development infrastructure |
| url | https://hdl.handle.net/10568/161815 |
| work_keys_str_mv | AT roblesmiguel aggregateeffectsofimperfecttaxenforcement |