Size-Dependent Tax Enforcement and Compliance : Global Evidence and Aggregate Implications
This paper studies the prevalence and consequences of size-dependent tax enforcement and compliance. The identification strategy uses the ranking of industries' average firm size in the United States as an instrument for the size ranking of th...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/768971520865898064/Size-dependent-tax-enforcement-and-compliance-global-evidence-and-aggregate-implications http://hdl.handle.net/10986/29457 |
| Summary: | This paper studies the prevalence and
consequences of size-dependent tax enforcement and
compliance. The identification strategy uses the ranking of
industries' average firm size in the United States as
an instrument for the size ranking of the same industries in
developing countries. Data on 125,000 firms in 140 countries
show that tax enforcement and compliance increase with size.
Size-dependence is more prevalent in low-income countries,
and concentrated at the top of the size distribution. When
quantified in a general equilibrium model, removing size
dependent enforcement leads to gains in Total Factor
Productivity of up to 0.8 percent. |
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