Tax Enforcement (De)Centralization: Tax Compliance Versus Competitiveness

54 Pages Posted: 2 May 2019

See all articles by Jesse van der Geest

Jesse van der Geest

Tilburg University

Martin Jacob

WHU - Otto Beisheim School of Management

Date Written: April 1, 2019


We study tax compliance under decentralized versus centralized tax enforcement. Using a tax administration reform in Canada, we examine which organizational level of tax enforcement leads to higher compliance. Our results show that there is more tax avoidance under centralized tax enforcement. We also provide a rationale for centralized tax administration. We find that firms become more competitive after moving from decentralized to centralized tax enforcement. We attribute the increased competitiveness under centralized tax enforcement to compliance cost savings and reduced tax burdens. Our analysis suggests that governments face a trade-off between securing tax revenue and increasing firm competitiveness.

Keywords: Tax Enforcement, Tax Compliance, Tax Avoidance, Firm Competitiveness

JEL Classification: H11, H25, H26, H77, M48

Suggested Citation

van der Geest, Jesse and Jacob, Martin, Tax Enforcement (De)Centralization: Tax Compliance Versus Competitiveness (April 1, 2019). Available at SSRN: or

Jesse Van der Geest

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE

Martin Jacob (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
D-56179 Vallendar, 56179


Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics