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...

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Main Authors:	Rijkers, Bob, Baghdadi, Leila, Raballand, Gael
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	TARIFFS EMPLOYMENT COMPETITORS CHECKS ACCOUNTING TARIFF RATES PRODUCTION IMPORT REGIMES INTEREST DUMMY VARIABLES PARTNER AVERAGE PRICES EXCHANGE BALANCE OF PAYMENTS IMPORT TAXES EXPORTS ENTREPRENEURS DEVELOPING COUNTRIES DOMESTIC MARKET TAX COLLECTION EXPORTERS POLITICAL ECONOMY REVENUES COMPANIES MARKET SHARES PROTECTION FOR SALE BUDGET CONSTRAINTS ADMINISTRATIVE CONTROLS PRICE TAX LOBBYING DUMMY VARIABLE EXPORT QUANTITY INTERNATIONAL BANK TRADE AGREEMENTS BUDGET IMPORT LICENSES CUSTOMS DUTIES TARIFF INCREASES FISCAL POLICIES IMPORT DATA FOREIGN TRADE IMPORT PRICES IMPORT DECLARATIONS NON-TARIFF BARRIERS TAX REGIME CUSTOMS PRODUCTS TRADING TAX EXEMPTIONS FIRM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE AGREEMENTS OPEN ECONOMY INTERNATIONAL ECONOMICS IMPORTS TRADE POLICY PRODUCT ENTERPRISES FINANCE COMPETITOR BANK POLICY TAXES EXPORT VALUE TRANSACTIONS GRANT CONSUMPTION SUBSTITUTE FIRMS TAX RATE FRAUD CUSTOMS OFFICIALS INTERNATIONAL TRADE TRANCHE VALUE CUSTOMS AUTHORITIES IMPORT VALUES FOREIGN INVESTMENT DEMAND PUBLIC ENTERPRISES IMPORT PRICE DEMAND FUNCTION BAILOUTS EXPENDITURES PROPERTY TAX RATES JOB CREATION SALE AVERAGE PRICE SHARES IMPORT SHARE MARKET TRADE LIBERALIZATION PREFERENTIAL TREATMENT INSURANCE TAXATION EXPANSION ECONOMIC DEVELOPMENT TRADE INTERESTS GOODS INVESTMENT DOMESTIC PRODUCTION SHARE COMPARATIVE ADVANTAGE INVESTMENT CLIMATE PARTNERS TARIFF MARKET POWER TAX POLICY PROFIT RISK MANAGEMENT TRUST FUND PRICE DECREASE TARIFF RATE EXCHANGE RATE RISK AVERSION PROFITS TRADING PARTNERS IMPORT DUTIES IMPORT VALUE CUSTOMS DECLARATIONS OUTSOURCING PRICES INEQUALITY CUSTOMS REGIME
Online Access:	http://documents.worldbank.org/curated/en/2015/06/24697879/political-connections-tariff-evasion-evidence-tunisia http://hdl.handle.net/10986/22217

id	okr-10986-22217
recordtype	oai_dc
spelling	okr-10986-222172021-04-23T14:04:07Z Political Connections and Tariff Evasion : Evidence from Tunisia Rijkers, Bob Baghdadi, Leila Raballand, Gael TARIFFS EMPLOYMENT COMPETITORS CHECKS ACCOUNTING TARIFF RATES PRODUCTION IMPORT REGIMES INTEREST DUMMY VARIABLES PARTNER AVERAGE PRICES EXCHANGE BALANCE OF PAYMENTS IMPORT TAXES EXPORTS ENTREPRENEURS DEVELOPING COUNTRIES DOMESTIC MARKET TAX COLLECTION EXPORTERS POLITICAL ECONOMY REVENUES COMPANIES MARKET SHARES PROTECTION FOR SALE BUDGET CONSTRAINTS ADMINISTRATIVE CONTROLS PRICE TAX LOBBYING DUMMY VARIABLE EXPORT QUANTITY INTERNATIONAL BANK TRADE AGREEMENTS BUDGET IMPORT LICENSES CUSTOMS DUTIES TARIFF INCREASES FISCAL POLICIES IMPORT DATA FOREIGN TRADE IMPORT PRICES IMPORT DECLARATIONS NON-TARIFF BARRIERS TAX REGIME CUSTOMS PRODUCTS TRADING TAX EXEMPTIONS FIRM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE AGREEMENTS OPEN ECONOMY INTERNATIONAL ECONOMICS IMPORTS TRADE POLICY PRODUCT ENTERPRISES FINANCE COMPETITOR BANK POLICY TAXES EXPORT VALUE TRANSACTIONS GRANT CONSUMPTION SUBSTITUTE FIRMS TAX RATE FRAUD CUSTOMS OFFICIALS INTERNATIONAL TRADE TRANCHE VALUE CUSTOMS AUTHORITIES IMPORT VALUES FOREIGN INVESTMENT DEMAND PUBLIC ENTERPRISES IMPORT PRICE DEMAND FUNCTION BAILOUTS EXPENDITURES PROPERTY TAX RATES JOB CREATION SALE AVERAGE PRICE SHARES IMPORT SHARE MARKET TRADE LIBERALIZATION PREFERENTIAL TREATMENT INSURANCE TAXATION EXPANSION ECONOMIC DEVELOPMENT TRADE INTERESTS GOODS INVESTMENT DOMESTIC PRODUCTION SHARE COMPARATIVE ADVANTAGE INVESTMENT CLIMATE PARTNERS TARIFF MARKET POWER TAX POLICY PROFIT RISK MANAGEMENT TRUST FUND PRICE DECREASE TARIFF RATE EXCHANGE RATE RISK AVERSION PROFITS TRADING PARTNERS IMPORT DUTIES IMPORT VALUE CUSTOMS DECLARATIONS OUTSOURCING PRICES INEQUALITY CUSTOMS REGIME 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. 2015-07-17T18:59:06Z 2015-07-17T18:59:06Z 2015-06 Working Paper http://documents.worldbank.org/curated/en/2015/06/24697879/political-connections-tariff-evasion-evidence-tunisia http://hdl.handle.net/10986/22217 English en_US Policy Research Working Paper;No. 7336 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Middle East and North Africa Tunisia
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	TARIFFS EMPLOYMENT COMPETITORS CHECKS ACCOUNTING TARIFF RATES PRODUCTION IMPORT REGIMES INTEREST DUMMY VARIABLES PARTNER AVERAGE PRICES EXCHANGE BALANCE OF PAYMENTS IMPORT TAXES EXPORTS ENTREPRENEURS DEVELOPING COUNTRIES DOMESTIC MARKET TAX COLLECTION EXPORTERS POLITICAL ECONOMY REVENUES COMPANIES MARKET SHARES PROTECTION FOR SALE BUDGET CONSTRAINTS ADMINISTRATIVE CONTROLS PRICE TAX LOBBYING DUMMY VARIABLE EXPORT QUANTITY INTERNATIONAL BANK TRADE AGREEMENTS BUDGET IMPORT LICENSES CUSTOMS DUTIES TARIFF INCREASES FISCAL POLICIES IMPORT DATA FOREIGN TRADE IMPORT PRICES IMPORT DECLARATIONS NON-TARIFF BARRIERS TAX REGIME CUSTOMS PRODUCTS TRADING TAX EXEMPTIONS FIRM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE AGREEMENTS OPEN ECONOMY INTERNATIONAL ECONOMICS IMPORTS TRADE POLICY PRODUCT ENTERPRISES FINANCE COMPETITOR BANK POLICY TAXES EXPORT VALUE TRANSACTIONS GRANT CONSUMPTION SUBSTITUTE FIRMS TAX RATE FRAUD CUSTOMS OFFICIALS INTERNATIONAL TRADE TRANCHE VALUE CUSTOMS AUTHORITIES IMPORT VALUES FOREIGN INVESTMENT DEMAND PUBLIC ENTERPRISES IMPORT PRICE DEMAND FUNCTION BAILOUTS EXPENDITURES PROPERTY TAX RATES JOB CREATION SALE AVERAGE PRICE SHARES IMPORT SHARE MARKET TRADE LIBERALIZATION PREFERENTIAL TREATMENT INSURANCE TAXATION EXPANSION ECONOMIC DEVELOPMENT TRADE INTERESTS GOODS INVESTMENT DOMESTIC PRODUCTION SHARE COMPARATIVE ADVANTAGE INVESTMENT CLIMATE PARTNERS TARIFF MARKET POWER TAX POLICY PROFIT RISK MANAGEMENT TRUST FUND PRICE DECREASE TARIFF RATE EXCHANGE RATE RISK AVERSION PROFITS TRADING PARTNERS IMPORT DUTIES IMPORT VALUE CUSTOMS DECLARATIONS OUTSOURCING PRICES INEQUALITY CUSTOMS REGIME
spellingShingle	TARIFFS EMPLOYMENT COMPETITORS CHECKS ACCOUNTING TARIFF RATES PRODUCTION IMPORT REGIMES INTEREST DUMMY VARIABLES PARTNER AVERAGE PRICES EXCHANGE BALANCE OF PAYMENTS IMPORT TAXES EXPORTS ENTREPRENEURS DEVELOPING COUNTRIES DOMESTIC MARKET TAX COLLECTION EXPORTERS POLITICAL ECONOMY REVENUES COMPANIES MARKET SHARES PROTECTION FOR SALE BUDGET CONSTRAINTS ADMINISTRATIVE CONTROLS PRICE TAX LOBBYING DUMMY VARIABLE EXPORT QUANTITY INTERNATIONAL BANK TRADE AGREEMENTS BUDGET IMPORT LICENSES CUSTOMS DUTIES TARIFF INCREASES FISCAL POLICIES IMPORT DATA FOREIGN TRADE IMPORT PRICES IMPORT DECLARATIONS NON-TARIFF BARRIERS TAX REGIME CUSTOMS PRODUCTS TRADING TAX EXEMPTIONS FIRM INTERNATIONAL DEVELOPMENT INTERNATIONAL TRADE AGREEMENTS OPEN ECONOMY INTERNATIONAL ECONOMICS IMPORTS TRADE POLICY PRODUCT ENTERPRISES FINANCE COMPETITOR BANK POLICY TAXES EXPORT VALUE TRANSACTIONS GRANT CONSUMPTION SUBSTITUTE FIRMS TAX RATE FRAUD CUSTOMS OFFICIALS INTERNATIONAL TRADE TRANCHE VALUE CUSTOMS AUTHORITIES IMPORT VALUES FOREIGN INVESTMENT DEMAND PUBLIC ENTERPRISES IMPORT PRICE DEMAND FUNCTION BAILOUTS EXPENDITURES PROPERTY TAX RATES JOB CREATION SALE AVERAGE PRICE SHARES IMPORT SHARE MARKET TRADE LIBERALIZATION PREFERENTIAL TREATMENT INSURANCE TAXATION EXPANSION ECONOMIC DEVELOPMENT TRADE INTERESTS GOODS INVESTMENT DOMESTIC PRODUCTION SHARE COMPARATIVE ADVANTAGE INVESTMENT CLIMATE PARTNERS TARIFF MARKET POWER TAX POLICY PROFIT RISK MANAGEMENT TRUST FUND PRICE DECREASE TARIFF RATE EXCHANGE RATE RISK AVERSION PROFITS TRADING PARTNERS IMPORT DUTIES IMPORT VALUE CUSTOMS DECLARATIONS OUTSOURCING PRICES INEQUALITY CUSTOMS REGIME Rijkers, Bob Baghdadi, Leila Raballand, Gael Political Connections and Tariff Evasion : Evidence from Tunisia
geographic_facet	Middle East and North Africa Tunisia
relation	Policy Research Working Paper;No. 7336
description	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.
format	Working Paper
author	Rijkers, Bob Baghdadi, Leila Raballand, Gael
author_facet	Rijkers, Bob Baghdadi, Leila Raballand, Gael
author_sort	Rijkers, Bob
title	Political Connections and Tariff Evasion : Evidence from Tunisia
title_short	Political Connections and Tariff Evasion : Evidence from Tunisia
title_full	Political Connections and Tariff Evasion : Evidence from Tunisia
title_fullStr	Political Connections and Tariff Evasion : Evidence from Tunisia
title_full_unstemmed	Political Connections and Tariff Evasion : Evidence from Tunisia
title_sort	political connections and tariff evasion : evidence from tunisia
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/06/24697879/political-connections-tariff-evasion-evidence-tunisia http://hdl.handle.net/10986/22217
_version_	1764450450749259776

Political Connections and Tariff Evasion : Evidence from Tunisia

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