Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data

This paper uses firm-level survey data matched with official tax records to estimate the unobserved true sales of formal firms in Mongolia. Taking into account firm-level incentives to comply with taxes and a production function technology linking...

Full description

Bibliographic Details
Main Authors:	Zhou, Fujin, Oostendorp, Remco
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	AGENCY COSTS BANK CREDIT BANK LOANS BANK POLICY BOND BOOK VALUES BUDGET CONSTRAINT BUSINESS ENVIRONMENT CAPITAL RETURN CAPITAL STOCKS CENTRAL PLANNING COMPETITIVENESS CORPORATE INCOME TAX CORPORATE PROFIT CORPORATE PROFIT TAX CORPORATE TAX COST OF CAPITAL CREDIT CONSTRAINT CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DUMMY VARIABLE DUMMY VARIABLES ECONOMETRIC MODELING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC RENTS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMICS ELASTICITY EMPLOYMENT ENTERPRISE DEVELOPMENT ENTERPRISE PERFORMANCE EQUATIONS EQUIPMENT EQUIPMENTS EXPENDITURE FINANCIAL INSTITUTION FINANCIAL STATEMENTS FIRM PERFORMANCE FIRM SIZE FIRM SIZES FIRMS FREE BOND GDP GDP PER CAPITA GIFTS HOLDING INCOME GROUPS INCOMES INDIVIDUAL FIRMS INEFFICIENCY INSTRUMENT INTERNAL CONTROL INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVENTORY INVESTMENT CLIMATE JUDICIAL SYSTEMS LABOR MARKET LEGAL SYSTEMS LOAN MANUFACTURING ENTERPRISES MARGINAL COST MARGINAL TAX RATES MARKET ECONOMY MAXIMUM LIKELIHOOD ESTIMATION MICRODATA MIDDLE INCOME COUNTRIES OUTPUT OUTPUTS OWNERSHIP STRUCTURE PAYROLL TAX PAYROLL TAXES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PUBLIC POLICY REGRESSION ANALYSIS REINVESTMENT SMALL FIRMS SOCIAL SECURITY TAX TAX TAX ADMINISTRATION TAX AUDITING TAX AUDITS TAX COMPLIANCE TAX DEDUCTIBLE TAX ENFORCEMENT TAX EVASION TAX RATE TAX REPORTING TAX REPORTS TAXABLE INCOME TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMY UNDERESTIMATES VALUE OF OUTPUT WAGES WEALTH
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110406084954 http://hdl.handle.net/10986/3394

id	okr-10986-3394
recordtype	oai_dc
spelling	okr-10986-33942021-04-23T14:02:09Z Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data Zhou, Fujin Oostendorp, Remco AGENCY COSTS BANK CREDIT BANK LOANS BANK POLICY BOND BOOK VALUES BUDGET CONSTRAINT BUSINESS ENVIRONMENT CAPITAL RETURN CAPITAL STOCKS CENTRAL PLANNING COMPETITIVENESS CORPORATE INCOME TAX CORPORATE PROFIT CORPORATE PROFIT TAX CORPORATE TAX COST OF CAPITAL CREDIT CONSTRAINT CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DUMMY VARIABLE DUMMY VARIABLES ECONOMETRIC MODELING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC RENTS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMICS ELASTICITY EMPLOYMENT ENTERPRISE DEVELOPMENT ENTERPRISE PERFORMANCE EQUATIONS EQUIPMENT EQUIPMENTS EXPENDITURE FINANCIAL INSTITUTION FINANCIAL STATEMENTS FIRM PERFORMANCE FIRM SIZE FIRM SIZES FIRMS FREE BOND GDP GDP PER CAPITA GIFTS HOLDING INCOME GROUPS INCOMES INDIVIDUAL FIRMS INEFFICIENCY INSTRUMENT INTERNAL CONTROL INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVENTORY INVESTMENT CLIMATE JUDICIAL SYSTEMS LABOR MARKET LEGAL SYSTEMS LOAN MANUFACTURING ENTERPRISES MARGINAL COST MARGINAL TAX RATES MARKET ECONOMY MAXIMUM LIKELIHOOD ESTIMATION MICRODATA MIDDLE INCOME COUNTRIES OUTPUT OUTPUTS OWNERSHIP STRUCTURE PAYROLL TAX PAYROLL TAXES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PUBLIC POLICY REGRESSION ANALYSIS REINVESTMENT SMALL FIRMS SOCIAL SECURITY TAX TAX TAX ADMINISTRATION TAX AUDITING TAX AUDITS TAX COMPLIANCE TAX DEDUCTIBLE TAX ENFORCEMENT TAX EVASION TAX RATE TAX REPORTING TAX REPORTS TAXABLE INCOME TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMY UNDERESTIMATES VALUE OF OUTPUT WAGES WEALTH This paper uses firm-level survey data matched with official tax records to estimate the unobserved true sales of formal firms in Mongolia. Taking into account firm-level incentives to comply with taxes and a production function technology linking unobserved true sales with observable firm-level production characteristics, the authors derive a multiple-indicators, multiple-causes model predicting unobserved true sales. Comparing predicted true sales with sales reported to the tax office, the analysis finds that 38.6 percent of firm-level sales are underreported. It also finds evidence that firm-level survey data suffer from significant underreporting. Finally, the paper compares this approach with two alternative approaches to measuring underreporting by firms. 2012-03-19T18:01:42Z 2012-03-19T18:01:42Z 2011-04-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110406084954 http://hdl.handle.net/10986/3394 English Policy Research working paper ; no. WPS 5628 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AGENCY COSTS BANK CREDIT BANK LOANS BANK POLICY BOND BOOK VALUES BUDGET CONSTRAINT BUSINESS ENVIRONMENT CAPITAL RETURN CAPITAL STOCKS CENTRAL PLANNING COMPETITIVENESS CORPORATE INCOME TAX CORPORATE PROFIT CORPORATE PROFIT TAX CORPORATE TAX COST OF CAPITAL CREDIT CONSTRAINT CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DUMMY VARIABLE DUMMY VARIABLES ECONOMETRIC MODELING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC RENTS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMICS ELASTICITY EMPLOYMENT ENTERPRISE DEVELOPMENT ENTERPRISE PERFORMANCE EQUATIONS EQUIPMENT EQUIPMENTS EXPENDITURE FINANCIAL INSTITUTION FINANCIAL STATEMENTS FIRM PERFORMANCE FIRM SIZE FIRM SIZES FIRMS FREE BOND GDP GDP PER CAPITA GIFTS HOLDING INCOME GROUPS INCOMES INDIVIDUAL FIRMS INEFFICIENCY INSTRUMENT INTERNAL CONTROL INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVENTORY INVESTMENT CLIMATE JUDICIAL SYSTEMS LABOR MARKET LEGAL SYSTEMS LOAN MANUFACTURING ENTERPRISES MARGINAL COST MARGINAL TAX RATES MARKET ECONOMY MAXIMUM LIKELIHOOD ESTIMATION MICRODATA MIDDLE INCOME COUNTRIES OUTPUT OUTPUTS OWNERSHIP STRUCTURE PAYROLL TAX PAYROLL TAXES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PUBLIC POLICY REGRESSION ANALYSIS REINVESTMENT SMALL FIRMS SOCIAL SECURITY TAX TAX TAX ADMINISTRATION TAX AUDITING TAX AUDITS TAX COMPLIANCE TAX DEDUCTIBLE TAX ENFORCEMENT TAX EVASION TAX RATE TAX REPORTING TAX REPORTS TAXABLE INCOME TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMY UNDERESTIMATES VALUE OF OUTPUT WAGES WEALTH
spellingShingle	AGENCY COSTS BANK CREDIT BANK LOANS BANK POLICY BOND BOOK VALUES BUDGET CONSTRAINT BUSINESS ENVIRONMENT CAPITAL RETURN CAPITAL STOCKS CENTRAL PLANNING COMPETITIVENESS CORPORATE INCOME TAX CORPORATE PROFIT CORPORATE PROFIT TAX CORPORATE TAX COST OF CAPITAL CREDIT CONSTRAINT CREDIT CONSTRAINTS DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DUMMY VARIABLE DUMMY VARIABLES ECONOMETRIC MODELING ECONOMETRICS ECONOMIC DEVELOPMENT ECONOMIC RENTS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMICS ELASTICITY EMPLOYMENT ENTERPRISE DEVELOPMENT ENTERPRISE PERFORMANCE EQUATIONS EQUIPMENT EQUIPMENTS EXPENDITURE FINANCIAL INSTITUTION FINANCIAL STATEMENTS FIRM PERFORMANCE FIRM SIZE FIRM SIZES FIRMS FREE BOND GDP GDP PER CAPITA GIFTS HOLDING INCOME GROUPS INCOMES INDIVIDUAL FIRMS INEFFICIENCY INSTRUMENT INTERNAL CONTROL INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INVENTORY INVESTMENT CLIMATE JUDICIAL SYSTEMS LABOR MARKET LEGAL SYSTEMS LOAN MANUFACTURING ENTERPRISES MARGINAL COST MARGINAL TAX RATES MARKET ECONOMY MAXIMUM LIKELIHOOD ESTIMATION MICRODATA MIDDLE INCOME COUNTRIES OUTPUT OUTPUTS OWNERSHIP STRUCTURE PAYROLL TAX PAYROLL TAXES PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH PROFIT MAXIMIZATION PUBLIC POLICY REGRESSION ANALYSIS REINVESTMENT SMALL FIRMS SOCIAL SECURITY TAX TAX TAX ADMINISTRATION TAX AUDITING TAX AUDITS TAX COMPLIANCE TAX DEDUCTIBLE TAX ENFORCEMENT TAX EVASION TAX RATE TAX REPORTING TAX REPORTS TAXABLE INCOME TOTAL FACTOR PRODUCTIVITY TRANSITION ECONOMY UNDERESTIMATES VALUE OF OUTPUT WAGES WEALTH Zhou, Fujin Oostendorp, Remco Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data
geographic_facet	The World Region The World Region
relation	Policy Research working paper ; no. WPS 5628
description	This paper uses firm-level survey data matched with official tax records to estimate the unobserved true sales of formal firms in Mongolia. Taking into account firm-level incentives to comply with taxes and a production function technology linking unobserved true sales with observable firm-level production characteristics, the authors derive a multiple-indicators, multiple-causes model predicting unobserved true sales. Comparing predicted true sales with sales reported to the tax office, the analysis finds that 38.6 percent of firm-level sales are underreported. It also finds evidence that firm-level survey data suffer from significant underreporting. Finally, the paper compares this approach with two alternative approaches to measuring underreporting by firms.
format	Publications & Research :: Policy Research Working Paper
author	Zhou, Fujin Oostendorp, Remco
author_facet	Zhou, Fujin Oostendorp, Remco
author_sort	Zhou, Fujin
title	Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data
title_short	Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data
title_full	Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data
title_fullStr	Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data
title_full_unstemmed	Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data
title_sort	measuring true sales and underreporting with matched firm-level survey and tax-office data
publishDate	2012
url	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110406084954 http://hdl.handle.net/10986/3394
_version_	1764386913303658496

Measuring True Sales and Underreporting with Matched Firm-Level Survey and Tax-Office Data

Similar Items