Political Connections and Tariff Evasion : Evidence from Tunisia
Are politically connected firms more likely to evade taxes? This paper presents evidence suggesting firms owned by President Ben Ali and his family were more prone to evade import tariffs. During Ben Ali’s reign, evasion gaps, defined as the differ...
Main Authors: | , , |
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Format: | Working Paper |
Language: | English en_US |
Published: |
World Bank, Washington, DC
2015
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/2015/06/24697879/political-connections-tariff-evasion-evidence-tunisia http://hdl.handle.net/10986/22217 |
Summary: | Are politically connected firms more
likely to evade taxes? This paper presents evidence
suggesting firms owned by President Ben Ali and his family
were more prone to evade import tariffs. During Ben Ali’s
reign, evasion gaps, defined as the difference between the
value of exports to Tunisia reported by partner countries
and the value of imports reported at Tunisian customs, were
correlated with the import share of connected firms. This
association was especially strong for goods subject to high
tariffs, and driven by underreporting of unit prices, which
diminished after the revolution. Consistent with these
product-level patterns, unit prices reported by connected
firms were lower than those reported by other firms, and
declined faster with tariffs than those of other firms.
Moreover, privatization to the Ben Ali family was associated
with a reduction in reported unit prices, whereas
privatization per se was not. |
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