This paper models misreporting fraud in the VAT when firms are heterogeneous in the level of unverifiable transactions and subjective evasion costs. Unverifiable transactions are determined by the level of sales to final consumers and the subjective evasion costs change the curvature of the cost...

This paper studies the impact of replacing sales tax by value-added tax (VAT) on production efficiency and informality among Indian states. We disentangle the production efficiency gains caused by removing the distortions of sales tax from the increase in enforcement caused by VAT's input refund...

In the VAT system, formal traders report their purchases to the administration for a deduction in their tax bill. I model this third-party reporting feature of the VAT in an input-output economy and quantify it among different activities using a forward linkages index. The administration can...