Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform

Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform

Does the digitization of transactions in an economy increase tax compliance This paper studies the effect of financial incentives on the adoption of electronic payment technology and on tax compliance by firms. Exploiting administrative data and po...

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Bibliographic Details
Main Authors: Brockmeyer, Anne, Saenz Somarriba, Magaly Vanessa
Format: Policy Research Working Paper
Language:English
Published: Washington, DC: World Bank 2022
Subjects:
TAX COMPLIANCE
GLOBAL PAYMENT
TAX-INCLUSIVE PRICE
CONSUMER TRANSACTION
PAYMENT METHOD
DEBIT TRANSACTION
TAX AUTHORITY
TAX WITHHOLDING
Online Access:http://documents.worldbank.org/curated/en/559201645710893209/Electronic-Payment-Technology-and-Tax-Compliance-Evidence-from-Uruguay-s-Financial-Inclusion-Reform
http://hdl.handle.net/10986/37055
id okr-10986-37055
recordtype oai_dc
spelling okr-10986-370552022-07-07T18:45:54Z Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform Brockmeyer, Anne Saenz Somarriba, Magaly Vanessa TAX COMPLIANCE GLOBAL PAYMENT TAX-INCLUSIVE PRICE CONSUMER TRANSACTION PAYMENT METHOD DEBIT TRANSACTION TAX AUTHORITY TAX WITHHOLDING Does the digitization of transactions in an economy increase tax compliance This paper studies the effect of financial incentives on the adoption of electronic payment technology and on tax compliance by firms. Exploiting administrative data and policy variation from Uruguay, the paper shows that i) consumer value-added tax rebates for credit and debit card transactions trigger an immediate 50 percent increase in the number of card transactions, ii) firms' use of card machines increases only on the intensive margin, and iii) tax compliance is unaffected. Endogenous card machine adoption and a low share of card sales in total reported sales can rationalize the findings. 2022-03-02T18:59:35Z 2022-03-02T18:59:35Z 2022-02-24 http://documents.worldbank.org/curated/en/559201645710893209/Electronic-Payment-Technology-and-Tax-Compliance-Evidence-from-Uruguay-s-Financial-Inclusion-Reform http://hdl.handle.net/10986/37055 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Policy Research Working Paper Publications & Research Latin America & Caribbean Uruguay
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
GLOBAL PAYMENT
TAX-INCLUSIVE PRICE
CONSUMER TRANSACTION
PAYMENT METHOD
DEBIT TRANSACTION
TAX AUTHORITY
TAX WITHHOLDING
spellingShingle TAX COMPLIANCE
GLOBAL PAYMENT
TAX-INCLUSIVE PRICE
CONSUMER TRANSACTION
PAYMENT METHOD
DEBIT TRANSACTION
TAX AUTHORITY
TAX WITHHOLDING
Brockmeyer, Anne
Saenz Somarriba, Magaly Vanessa
Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform
geographic_facet Latin America & Caribbean
Uruguay
description Does the digitization of transactions in an economy increase tax compliance This paper studies the effect of financial incentives on the adoption of electronic payment technology and on tax compliance by firms. Exploiting administrative data and policy variation from Uruguay, the paper shows that i) consumer value-added tax rebates for credit and debit card transactions trigger an immediate 50 percent increase in the number of card transactions, ii) firms' use of card machines increases only on the intensive margin, and iii) tax compliance is unaffected. Endogenous card machine adoption and a low share of card sales in total reported sales can rationalize the findings.
format Policy Research Working Paper
author Brockmeyer, Anne
Saenz Somarriba, Magaly Vanessa
author_facet Brockmeyer, Anne
Saenz Somarriba, Magaly Vanessa
author_sort Brockmeyer, Anne
title Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform
title_short Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform
title_full Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform
title_fullStr Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform
title_full_unstemmed Electronic Payment Technology and Tax Compliance : Evidence from Uruguay’s Financial Inclusion Reform
title_sort electronic payment technology and tax compliance : evidence from uruguay’s financial inclusion reform
publisher Washington, DC: World Bank
publishDate 2022
url http://documents.worldbank.org/curated/en/559201645710893209/Electronic-Payment-Technology-and-Tax-Compliance-Evidence-from-Uruguay-s-Financial-Inclusion-Reform
http://hdl.handle.net/10986/37055
_version_ 1764486516024803328

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