Can Tax Simplification Help Lower Tax Corruption?

This paper seeks to find empirical evidence of a link between tax simplification and corruption in tax administration. It attempts to do this by first defining "tax simplicity" as a measurable variable and exploring empirical relationship...

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Main Authors:	Awasthi, Rajul, Bayraktar, Nihal
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014
Subjects:	ACCOUNTING BANK POLICY BOND BUSINESS ENVIRONMENT BUSINESS TAXES CLIENT COUNTRIES COLLECTION PROCEDURES COMPLIANCE COSTS COMPUTER SYSTEMS CONTRACT ENFORCEMENT CORPORATE TAXES COUNTRY FIXED EFFECTS COUNTRY RISK CREDIBILITY CULTURAL DETERMINANTS DATA AVAILABILITY DECENTRALIZATION DEMOCRATIC ACCOUNTABILITY DEREGULATION DEVELOPING COUNTRIES DEVELOPMENT BANK DISPUTE RESOLUTION ECONOMIC EFFICIENCY ECONOMIC PERFORMANCE EMERGING MARKET EXCLUSION EXPORTS FOREIGN DIRECT INVESTMENT GIFTS GOOD GOVERNANCE GOVERNANCE INDICATORS GOVERNMENT EXPENDITURES GOVERNMENT POLICY GOVERNMENT REGULATION GOVERNMENT SPENDING GROWTH RATE INCOME INCOME GROUP INCOME GROUPS INCOME LEVEL INFLATION INTERNATIONAL BANK INVESTMENT CLIMATE INVESTMENT FLOWS ISSUANCE LACK OF TRANSPARENCY LEVY MATURITY MIDDLE-INCOME COUNTRIES NATURAL RESOURCES PAYMENT SYSTEMS PAYMENTS SYSTEMS PERFORMANCE MEASURES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL STABILITY PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY PUBLIC SECTOR PUBLIC SERVICES PUBLIC UTILITIES REGIONAL DUMMIES RENTS RULE OF LAW SMALL BUSINESSES STRUCTURAL REFORMS TAX TAX ADMINISTRATION TAX AUDIT TAX COLLECTIONS TAX COMPLIANCE TAX CONCESSIONS TAX EXEMPTIONS TAX INCENTIVES TAX LAW TAX LAWS TAX LEGISLATION TAX LIABILITY TAX PAYERS TAX POLICY TAX PROVISIONS TAX RATE TAX RATES TAX REFORMS TAX REFUNDS TAX REGIME TAX REGIMES TAX RESEARCH TAX RETURN TAX RETURNS TAX REVENUE TAX REVENUES TAX SIMPLIFICATION TAX STATUTES TAX SYSTEM TAX SYSTEMS TAX TABLE TAXATION TAXPAYER TAXPAYER COMPLIANCE TAXPAYER SERVICES TAXPAYERS TRANSITION ECONOMIES TRANSPARENCY TREASURY VALUE ADDED TAX WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2014/07/19898924/can-tax-simplification-help-lower-tax-corruption http://hdl.handle.net/10986/19381

id	okr-10986-19381
recordtype	oai_dc
spelling	okr-10986-193812021-04-23T14:03:52Z Can Tax Simplification Help Lower Tax Corruption? Awasthi, Rajul Bayraktar, Nihal ACCOUNTING BANK POLICY BOND BUSINESS ENVIRONMENT BUSINESS TAXES CLIENT COUNTRIES COLLECTION PROCEDURES COMPLIANCE COSTS COMPUTER SYSTEMS CONTRACT ENFORCEMENT CORPORATE TAXES COUNTRY FIXED EFFECTS COUNTRY RISK CREDIBILITY CULTURAL DETERMINANTS DATA AVAILABILITY DECENTRALIZATION DEMOCRATIC ACCOUNTABILITY DEREGULATION DEVELOPING COUNTRIES DEVELOPMENT BANK DISPUTE RESOLUTION ECONOMIC EFFICIENCY ECONOMIC PERFORMANCE EMERGING MARKET EXCLUSION EXPORTS FOREIGN DIRECT INVESTMENT GIFTS GOOD GOVERNANCE GOVERNANCE INDICATORS GOVERNMENT EXPENDITURES GOVERNMENT POLICY GOVERNMENT REGULATION GOVERNMENT SPENDING GROWTH RATE INCOME INCOME GROUP INCOME GROUPS INCOME LEVEL INFLATION INTERNATIONAL BANK INVESTMENT CLIMATE INVESTMENT FLOWS ISSUANCE LACK OF TRANSPARENCY LEVY MATURITY MIDDLE-INCOME COUNTRIES NATURAL RESOURCES PAYMENT SYSTEMS PAYMENTS SYSTEMS PERFORMANCE MEASURES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL STABILITY PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY PUBLIC SECTOR PUBLIC SERVICES PUBLIC UTILITIES REGIONAL DUMMIES RENTS RULE OF LAW SMALL BUSINESSES STRUCTURAL REFORMS TAX TAX ADMINISTRATION TAX AUDIT TAX COLLECTIONS TAX COMPLIANCE TAX CONCESSIONS TAX EXEMPTIONS TAX INCENTIVES TAX LAW TAX LAWS TAX LEGISLATION TAX LIABILITY TAX PAYERS TAX POLICY TAX PROVISIONS TAX RATE TAX RATES TAX REFORMS TAX REFUNDS TAX REGIME TAX REGIMES TAX RESEARCH TAX RETURN TAX RETURNS TAX REVENUE TAX REVENUES TAX SIMPLIFICATION TAX STATUTES TAX SYSTEM TAX SYSTEMS TAX TABLE TAXATION TAXPAYER TAXPAYER COMPLIANCE TAXPAYER SERVICES TAXPAYERS TRANSITION ECONOMIES TRANSPARENCY TREASURY VALUE ADDED TAX WORLD DEVELOPMENT INDICATORS This paper seeks to find empirical evidence of a link between tax simplification and corruption in tax administration. It attempts to do this by first defining "tax simplicity" as a measurable variable and exploring empirical relationships between simpler tax regimes and corruption in tax administration. Corruption in tax administration is calculated with data series from the World Bank's Enterprise Survey Database. The focus is on business taxes. The study includes 104 countries from different income groups and regions of the world. The time period is 2002-12. The empirical findings support the existence of a significant link between the measure of tax corruption and tax simplicity, so a less complex tax system is shown to be associated with lower corruption in tax administration. It is predicted that the combined effect of a 10 percent reduction in both the number of payments and the time to comply with tax requirements can lower tax corruption by 9.64 percent. Some interesting regional differences are observed in the results. Similarly, the income level of countries plays an important role in determining the impact of tax simplification on tax corruption; specifically, the link is stronger for lower-income level countries. The positive link between tax simplicity and lower tax corruption has useful policy implications. 2014-08-15T18:41:48Z 2014-08-15T18:41:48Z 2014-07 http://documents.worldbank.org/curated/en/2014/07/19898924/can-tax-simplification-help-lower-tax-corruption http://hdl.handle.net/10986/19381 English en_US Policy Research Working Paper;No. 6988 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING BANK POLICY BOND BUSINESS ENVIRONMENT BUSINESS TAXES CLIENT COUNTRIES COLLECTION PROCEDURES COMPLIANCE COSTS COMPUTER SYSTEMS CONTRACT ENFORCEMENT CORPORATE TAXES COUNTRY FIXED EFFECTS COUNTRY RISK CREDIBILITY CULTURAL DETERMINANTS DATA AVAILABILITY DECENTRALIZATION DEMOCRATIC ACCOUNTABILITY DEREGULATION DEVELOPING COUNTRIES DEVELOPMENT BANK DISPUTE RESOLUTION ECONOMIC EFFICIENCY ECONOMIC PERFORMANCE EMERGING MARKET EXCLUSION EXPORTS FOREIGN DIRECT INVESTMENT GIFTS GOOD GOVERNANCE GOVERNANCE INDICATORS GOVERNMENT EXPENDITURES GOVERNMENT POLICY GOVERNMENT REGULATION GOVERNMENT SPENDING GROWTH RATE INCOME INCOME GROUP INCOME GROUPS INCOME LEVEL INFLATION INTERNATIONAL BANK INVESTMENT CLIMATE INVESTMENT FLOWS ISSUANCE LACK OF TRANSPARENCY LEVY MATURITY MIDDLE-INCOME COUNTRIES NATURAL RESOURCES PAYMENT SYSTEMS PAYMENTS SYSTEMS PERFORMANCE MEASURES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL STABILITY PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY PUBLIC SECTOR PUBLIC SERVICES PUBLIC UTILITIES REGIONAL DUMMIES RENTS RULE OF LAW SMALL BUSINESSES STRUCTURAL REFORMS TAX TAX ADMINISTRATION TAX AUDIT TAX COLLECTIONS TAX COMPLIANCE TAX CONCESSIONS TAX EXEMPTIONS TAX INCENTIVES TAX LAW TAX LAWS TAX LEGISLATION TAX LIABILITY TAX PAYERS TAX POLICY TAX PROVISIONS TAX RATE TAX RATES TAX REFORMS TAX REFUNDS TAX REGIME TAX REGIMES TAX RESEARCH TAX RETURN TAX RETURNS TAX REVENUE TAX REVENUES TAX SIMPLIFICATION TAX STATUTES TAX SYSTEM TAX SYSTEMS TAX TABLE TAXATION TAXPAYER TAXPAYER COMPLIANCE TAXPAYER SERVICES TAXPAYERS TRANSITION ECONOMIES TRANSPARENCY TREASURY VALUE ADDED TAX WORLD DEVELOPMENT INDICATORS
spellingShingle	ACCOUNTING BANK POLICY BOND BUSINESS ENVIRONMENT BUSINESS TAXES CLIENT COUNTRIES COLLECTION PROCEDURES COMPLIANCE COSTS COMPUTER SYSTEMS CONTRACT ENFORCEMENT CORPORATE TAXES COUNTRY FIXED EFFECTS COUNTRY RISK CREDIBILITY CULTURAL DETERMINANTS DATA AVAILABILITY DECENTRALIZATION DEMOCRATIC ACCOUNTABILITY DEREGULATION DEVELOPING COUNTRIES DEVELOPMENT BANK DISPUTE RESOLUTION ECONOMIC EFFICIENCY ECONOMIC PERFORMANCE EMERGING MARKET EXCLUSION EXPORTS FOREIGN DIRECT INVESTMENT GIFTS GOOD GOVERNANCE GOVERNANCE INDICATORS GOVERNMENT EXPENDITURES GOVERNMENT POLICY GOVERNMENT REGULATION GOVERNMENT SPENDING GROWTH RATE INCOME INCOME GROUP INCOME GROUPS INCOME LEVEL INFLATION INTERNATIONAL BANK INVESTMENT CLIMATE INVESTMENT FLOWS ISSUANCE LACK OF TRANSPARENCY LEVY MATURITY MIDDLE-INCOME COUNTRIES NATURAL RESOURCES PAYMENT SYSTEMS PAYMENTS SYSTEMS PERFORMANCE MEASURES PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES POLITICAL DETERMINANTS POLITICAL ECONOMY POLITICAL RISK POLITICAL STABILITY PUBLIC ECONOMICS PUBLIC FINANCES PUBLIC POLICY PUBLIC SECTOR PUBLIC SERVICES PUBLIC UTILITIES REGIONAL DUMMIES RENTS RULE OF LAW SMALL BUSINESSES STRUCTURAL REFORMS TAX TAX ADMINISTRATION TAX AUDIT TAX COLLECTIONS TAX COMPLIANCE TAX CONCESSIONS TAX EXEMPTIONS TAX INCENTIVES TAX LAW TAX LAWS TAX LEGISLATION TAX LIABILITY TAX PAYERS TAX POLICY TAX PROVISIONS TAX RATE TAX RATES TAX REFORMS TAX REFUNDS TAX REGIME TAX REGIMES TAX RESEARCH TAX RETURN TAX RETURNS TAX REVENUE TAX REVENUES TAX SIMPLIFICATION TAX STATUTES TAX SYSTEM TAX SYSTEMS TAX TABLE TAXATION TAXPAYER TAXPAYER COMPLIANCE TAXPAYER SERVICES TAXPAYERS TRANSITION ECONOMIES TRANSPARENCY TREASURY VALUE ADDED TAX WORLD DEVELOPMENT INDICATORS Awasthi, Rajul Bayraktar, Nihal Can Tax Simplification Help Lower Tax Corruption?
relation	Policy Research Working Paper;No. 6988
description	This paper seeks to find empirical evidence of a link between tax simplification and corruption in tax administration. It attempts to do this by first defining "tax simplicity" as a measurable variable and exploring empirical relationships between simpler tax regimes and corruption in tax administration. Corruption in tax administration is calculated with data series from the World Bank's Enterprise Survey Database. The focus is on business taxes. The study includes 104 countries from different income groups and regions of the world. The time period is 2002-12. The empirical findings support the existence of a significant link between the measure of tax corruption and tax simplicity, so a less complex tax system is shown to be associated with lower corruption in tax administration. It is predicted that the combined effect of a 10 percent reduction in both the number of payments and the time to comply with tax requirements can lower tax corruption by 9.64 percent. Some interesting regional differences are observed in the results. Similarly, the income level of countries plays an important role in determining the impact of tax simplification on tax corruption; specifically, the link is stronger for lower-income level countries. The positive link between tax simplicity and lower tax corruption has useful policy implications.
format	Publications & Research :: Policy Research Working Paper
author	Awasthi, Rajul Bayraktar, Nihal
author_facet	Awasthi, Rajul Bayraktar, Nihal
author_sort	Awasthi, Rajul
title	Can Tax Simplification Help Lower Tax Corruption?
title_short	Can Tax Simplification Help Lower Tax Corruption?
title_full	Can Tax Simplification Help Lower Tax Corruption?
title_fullStr	Can Tax Simplification Help Lower Tax Corruption?
title_full_unstemmed	Can Tax Simplification Help Lower Tax Corruption?
title_sort	can tax simplification help lower tax corruption?
publisher	World Bank Group, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/07/19898924/can-tax-simplification-help-lower-tax-corruption http://hdl.handle.net/10986/19381
_version_	1764443820666126336

Can Tax Simplification Help Lower Tax Corruption?

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