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dc.contributor.authorMengistu, Andualem T.
dc.contributor.authorMolla, Kiflu G.
dc.contributor.authorMascagni, Giulia
dc.identifier.citationMengistu, A. T., Molla, K. G., and Mascagni, G. (2019) Tax Evasion and Missing Imports: Evidence From Transaction-Level Data, ICTD Working Paper 101, Brighton, IDSen
dc.description.abstractIt is well documented in the literature that developing countries raise less tax revenue as a share of their economy than their developed counterparts. Part of this gap can be explained by the relatively higher tax evasion in the former. Recent literature shows that increasing the availability of information reduces evasion, by increasing the probability of detection. However, there is little evidence to show how tax evasion responds to changes in tax rates. Using highly disaggregated trade data, we show that there is more tax evasion when tax rates increase. However, this relationship only holds when we use the de facto effective tax rate, rather than the de jure effective tax rate. We also find that evasion takes place through under-reporting of the value of imports, as well as mislabelling highly-taxed products as similar lower-taxed products. Finally, we show that when trade costs are ignored, the level of evasion is underestimated; the degree of underestimation in the elasticity estimate depends on the way the trade cost is included in the estimation.en
dc.relation.ispartofseriesICTD Working Paper;101
dc.subjectEconomic Developmenten
dc.titleTax Evasion and Missing Imports: Evidence From Transaction-Level Dataen
dc.typeSeries paper (non-IDS)en
dc.rights.holder© Institute of Development Studies 2019en
rioxxterms.funderDefault funderen
rioxxterms.identifier.projectInternational Centre for Tax and Development (ICTD)en

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