Tax Enforcement (de)Centralization: Tax Compliance versus Competitiveness

Jesse van der Geest, Martin Jacob

Research output: Working paperOther research output

Abstract

We study tax compliance under decentralized versus centralized tax enforcement. Using a tax administration reform in Canada, we examine which organizational level of tax enforcement leads to higher compliance. Our results show that there is more tax avoidance under centralized tax enforcement. We also provide a rationale for centralized tax administration. We find that firms become more competitive after moving from decentralized to centralized tax enforcement. We attribute the increased competitiveness under centralized tax enforcement to compliance cost savings and reduced tax burdens. Our analysis suggests that governments face a trade-off between securing tax revenue and increasing firm competitiveness.
Original languageEnglish
Number of pages54
Publication statusIn preparation - 2019

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Tax enforcement
Competitiveness
Tax compliance
Decentralization
Tax administration
Tax burden
Tax revenues
Cost savings
Tax avoidance
Canada
Rationale
Organizational level
Trade-offs
Government
Compliance costs

Cite this

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Tax Enforcement (de)Centralization: Tax Compliance versus Competitiveness. / van der Geest, Jesse; Jacob, Martin.

2019.

Research output: Working paperOther research output

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