Direct incentives and punishments are the most common instruments to fight tax evasion. The theoretical literature disregarded indirect schemes, such as itemised deductions, in which an agent has an interest in that other agents declare their revenue. Itemised deductions provide an incentive for...

This paper extends the standard theoretical model of tax enforcement by allowing for the cross-matching of transactions in addition to the auditing of taxpayers. For the Value Added Tax (VAT) the matching of purchase and sales invoices is an important enforcement technique. The paper examines...

The study examines if recent reforms in taxation and labor regulations in several transition and developing countries contributed to the observed decline in tax evasion. It uses the Business Environment and Economic Performance Survey, a unified firm survey in 33 countries conducted in...

Agents are required to provide the principal with a standardised receipt from all economic transactions. Taxation of the agents is based on the information on these receipts. To give the agents an incentive to comply with the procedure, the principal imposes a 'transaction tax' on all...

We provide empirical support and a theoretical explanation for the vicious circle of political corruption and tax evasion in which countries often fall into. We address this issue in the context of a model with two distinct groups of agents: citizens and politicians. Citizens decide the fraction...

Appendix is available at: https://ssrn.com/abstract=3322092We examine recent survey data from California to investigate smokers’ responses to an increase in cigarette excise-tax rates. We estimate how tax avoidance and the economic crimes of tax evasion and illicit trade in tobacco products...

In recent years tax authorities worldwide have implemented voluntary disclosure schemes to recover tax on offshore investments. Such Schemes are characterized by the acquisition of non-audit information on offshore holdings, and a subsequent opportunity for affected taxpayers to make a voluntary...

If an additional competitor reduces output per firm in a homogenous Cournot-oligopoly, market entry will be excessive. Taxes can correct the so-called business stealing externality. We investigate how evading a tax on operating profits affects the excessive entry prediction. Tax evasion raises...

We use mandatory Russian banks' reports to the Central Bank to construct a novel measure of offshore-banking. Individual bank involvement in offshore operations is calculated as a fraction of total transactions with foreign countries that go through offshore financial centers. We find that...

In this paper we consider amoral taxpayers who access amoral tax preparers in order to receive help in evading taxes. Taxpayers are aware of having a biased perception of the audit probability, but are unable to correct such bias without the help of a tax preparer. The market for tax...