Vat Compliance, Trade, and Institutions

41 Pages Posted: 9 Aug 2019

See all articles by Peter Morrow

Peter Morrow

University of Toronto

Michael Smart

University of Toronto - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Artur Swistak

International Monetary Fund (IMF)

Date Written: 2019

Abstract

We develop a simple structural model of value added tax (VAT) compliance, and estimate it using widely available national accounts data to learn about compliance in countries where little is currently known. International border controls improve VAT compliance, generating a correlation between imports and aggregate VAT revenues that is informative about domestic non-compliance. Estimates suggest that revenue lost due to domestic non-compliance is large, particularly in countries with low perceived institutional quality. Border controls keep overall VAT revenues high especially in countries open to international trade.

JEL Classification: H250, H260

Suggested Citation

Morrow, Peter and Smart, Michael and Swistak, Artur, Vat Compliance, Trade, and Institutions (2019). CESifo Working Paper No. 7780, Available at SSRN: https://ssrn.com/abstract=3434836

Peter Morrow (Contact Author)

University of Toronto ( email )

Michael Smart

University of Toronto - Department of Economics ( email )

150 St. George Street
Institute for Policy Analysis
Toronto, Ontario M5S 3G7
Canada
416-978-5119 (Phone)
416-978-6713 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Artur Swistak

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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

Paper statistics

Downloads
93
Abstract Views
542
rank
328,761
PlumX Metrics