Consumers as Tax Auditors

By Joana Naritomi. The American Economic Review, 2019

274 citations recorded by the source corpus.

To investigate the enforcement value of third-party information on potentially collusive taxpayers, I study an anti-tax evasion program that rewards consumers for ensuring that firms report sales and establishes a verification system to aid whistle-blowing consumers in São Paulo, Brazil (Nota Fiscal Paulista). Firms reported sales increased by at least 21 percent over 4 years. The results are consistent with fixed costs of concealing collusion, increased detection probability from whistle-blower threats, and with behavioral biases associated with lotteries amplifying the enforcement value of the program. Although firms increased reported expenses, tax revenue net of rewards increased by 9.3 percent. (JEL D22, H25, H26, L25, O14, O17)

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/4c0f45848fb973d4b17d27f3f3634ad803bdf9d0

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In Accounting

1. X. d'Haultfoeuille
2. C. Chaisemartin
3. Jonathan L. Weigel

In Economics and Econometrics

1. X. d'Haultfoeuille
2. C. Chaisemartin
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Citations in the corpus

• Difference-in-Differences Estimators of Intertemporal Treatment Effects (2020, methodology): “For instance, the design of Pierce and Schott (2016) corresponds to Design 3.”
• How to Improve Tax Compliance? Evidence from Population-Wide Experiments in Belgium (2019, unknown): “Slemrod (2015). Taxpayer search for information: Implications for rational attention.”
• Shaming tax delinquents (2015, unknown): “…such as auditing (Slemrod et al., 2001); third-party reporting (Kleven et al., 2011); paper trails (Pomeranz, 2015); cross-checking (Bø et al., 2015; Carrillo et al., 2017; Drago et al., 2011; Naritomi, 2015); and satellite detection of unregistered properties (Casaburi and Troiano, 2016).”
• Informality: Causes and Consequences for Development (2020, unknown): “Similarly, Naritomi (2018) uses a unique administrative data from Brazil to show, among other results, that introducing incentives similar to the VAT for final sales leads to substantial increase in firms’ reported revenue.”
• The Participation Dividend of Taxation: How Citizens in Congo Engage More with the State When it Tries to Tax Them* (2020, background): “…Past work examines how governments can raise compliance through third-party reporting (Kleven et al. 2011; Pomeranz 2015; Carrillo, Pomeranz, and Singhal 2017; Jensen 2018; Naritomi 2019), tax collector incentives (Khan, Khwaja, and Olken 2015), providing information about enforcement or peer 16.”