Audit Publicity and Tax Compliance: A Natural Experiment

28 Pages Posted: 6 Jun 2020

See all articles by Pietro Battiston

Pietro Battiston

University of Pisa - Department of Economics and Management

Denvil Duncan

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); Institute for the Study of Labor (IZA)

Simona Gamba

Catholic University of the Sacred Heart of Milan - Department of Economics and Finance

Alessandro Santoro

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)

Date Written: January 2020

Abstract

We use confidential data on value‐added tax payments at the sector level, in two large Italian cities, to estimate the effect of audit publicity on the tax compliance of local sellers. By employing a difference‐in‐differences identification strategy, we find that such publicity has a positive effect on fiscal declarations made shortly thereafter. The results suggest that increasing awareness on future audits via the media can be an important instrument in the hands of tax authorities.

Keywords: Audits, media coverage, social norms, tax evasion

Suggested Citation

Battiston, Pietro and Duncan, Denvil and Gamba, Simona and Santoro, Alessandro, Audit Publicity and Tax Compliance: A Natural Experiment (January 2020). The Scandinavian Journal of Economics, Vol. 122, Issue 1, pp. 81-108, 2020, Available at SSRN: https://ssrn.com/abstract=3620265 or http://dx.doi.org/10.1111/sjoe.12330

Pietro Battiston (Contact Author)

University of Pisa - Department of Economics and Management ( email )

Pisa
Italy

Denvil Duncan

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Simona Gamba

Catholic University of the Sacred Heart of Milan - Department of Economics and Finance ( email )

Via Necchi 5
Milan, MI 20123
Italy

Alessandro Santoro

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

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