27 Pages Posted: 7 Aug 2015
Date Written: August 7, 2015
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: 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