Short-Lived Effects of Mandatory Cash Registers on VAT Compliance

We assess the impact of a regulatory change in Sweden, which required cash businesses to use a certified cash register, on small business tax compliance. To do this, we use administrative data on the monthly reported revenue of all affected firms and a staggered difference-in-differences approach. Our findings indicate that there was an immediate increase of about 2-4% in reported revenue following the implementation of a certified cash register. However, the effect was temporary and diminished to zero after just a few months