Tax Compliance Under Different Institutional Settings in the EU: An Experimental Analysis

27 Pages Posted: 7 Aug 2015

See all articles by Stefania Ottone

Stefania Ottone

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Ferruccio Ponzano

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS)

Giulia Andrighetto

Institute of Cognitive Sciences and Technologies; Linkoping University - Institute for Analytical Sociology (IAS); The Institute for Future Studies

Date Written: August 7, 2015

Abstract

In this paper we study how people from different European countries would react, in terms of tax compliance, to institutional changes. We choose an experimental setting and we focus on two features of the tax system - efficiency and tax rate. We develop our analysis in three countries characterized by different systems: Italy, Sweden, UK. The main finding is that participants from different countries react with the same intensity to efficiency changes but not to increases in the tax rate. In all countries tax compliance decreases as tax rate increases, but the reaction is stronger in Italy and softer in UK. Policy implications - mostly focused on fiscal harmonization - follow.

Keywords: tax compliance, fiscal harmonization, cross-country comparison, efficiency, tax rate

JEL Classification: C9, D31, H26

Suggested Citation

Ottone, Stefania and Ponzano, Ferruccio and Andrighetto, Giulia, Tax Compliance Under Different Institutional Settings in the EU: An Experimental Analysis (August 7, 2015). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 307, Available at SSRN: https://ssrn.com/abstract=2641069 or http://dx.doi.org/10.2139/ssrn.2641069

Stefania Ottone (Contact Author)

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Ferruccio Ponzano

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Giulia Andrighetto

Institute of Cognitive Sciences and Technologies ( email )

IASI BioMatLab
Institute of Systems Analysis and Computer Science
Rome
Italy

Linkoping University - Institute for Analytical Sociology (IAS) ( email )

Norrköping, 601 74
Sweden

The Institute for Future Studies ( email )

Holländargatan 13
Stockholm, 11136
Sweden

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