Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?

Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?

To collect tax revenue and maximize the use of scarce enforcement capacity, some tax administrations focus their enforcement efforts disproportionately on large firms instead of enforcing taxes evenly on firms of all sizes: small, medium, or large....

Full description

Bibliographic Details
Main Author: Bachas, Pierre
Format: Brief
Language:English
Published: World Bank, Washington, DC 2021
Subjects:
TAX COMPLIANCE
TAX ENFORCEMENT
TAX ADMINISTRATION
TAX COLLECTION
TAX RATE
FIRM SIZE
PRODUCTION DISTORTION
Online Access:http://documents.worldbank.org/curated/en/639901616767373603/Targeting-Tax-Enforcement-Efforts-on-Larger-Firms-A-Necessary-Distortion
http://hdl.handle.net/10986/35336
id okr-10986-35336
recordtype oai_dc
spelling okr-10986-353362021-04-23T14:02:20Z Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion? Bachas, Pierre TAX COMPLIANCE TAX ENFORCEMENT TAX ADMINISTRATION TAX COLLECTION TAX RATE FIRM SIZE PRODUCTION DISTORTION To collect tax revenue and maximize the use of scarce enforcement capacity, some tax administrations focus their enforcement efforts disproportionately on large firms instead of enforcing taxes evenly on firms of all sizes: small, medium, or large. This Research & Policy Brief provides evidence that size-dependent tax enforcement is prevalent, especially in lower-income countries, leading to increasing effective tax rates as firms become larger. The Brief then quantifies the impact of this policy for aggregate economic production. It finds that the impacts are moderate (amounting to about a 1 percent decline in total factor productivity), and thus could be justified for tax authorities with limited resources, given documented tax revenue gains of stringent enforcement targeted to large firms. 2021-03-29T17:18:31Z 2021-03-29T17:18:31Z 2021-04-02 Brief http://documents.worldbank.org/curated/en/639901616767373603/Targeting-Tax-Enforcement-Efforts-on-Larger-Firms-A-Necessary-Distortion http://hdl.handle.net/10986/35336 English Research and Policy Brief;No. 45 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Brief
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic TAX COMPLIANCE
TAX ENFORCEMENT
TAX ADMINISTRATION
TAX COLLECTION
TAX RATE
FIRM SIZE
PRODUCTION DISTORTION
spellingShingle TAX COMPLIANCE
TAX ENFORCEMENT
TAX ADMINISTRATION
TAX COLLECTION
TAX RATE
FIRM SIZE
PRODUCTION DISTORTION
Bachas, Pierre
Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?
relation Research and Policy Brief;No. 45
description To collect tax revenue and maximize the use of scarce enforcement capacity, some tax administrations focus their enforcement efforts disproportionately on large firms instead of enforcing taxes evenly on firms of all sizes: small, medium, or large. This Research & Policy Brief provides evidence that size-dependent tax enforcement is prevalent, especially in lower-income countries, leading to increasing effective tax rates as firms become larger. The Brief then quantifies the impact of this policy for aggregate economic production. It finds that the impacts are moderate (amounting to about a 1 percent decline in total factor productivity), and thus could be justified for tax authorities with limited resources, given documented tax revenue gains of stringent enforcement targeted to large firms.
format Brief
author Bachas, Pierre
author_facet Bachas, Pierre
author_sort Bachas, Pierre
title Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?
title_short Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?
title_full Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?
title_fullStr Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?
title_full_unstemmed Targeting Tax Enforcement Efforts on Larger Firms : A Necessary Distortion?
title_sort targeting tax enforcement efforts on larger firms : a necessary distortion?
publisher World Bank, Washington, DC
publishDate 2021
url http://documents.worldbank.org/curated/en/639901616767373603/Targeting-Tax-Enforcement-Efforts-on-Larger-Firms-A-Necessary-Distortion
http://hdl.handle.net/10986/35336
_version_ 1764482822519652352

Similar Items