Short-Lived Effects of Electronic Cash Registers on Reported Revenue

26 Pages Posted: 25 Apr 2023 Last revised: 30 Sep 2023

See all articles by Per Engström

Per Engström

Uppsala University - Department of Economics

Johannes Hagen

Jönköping University; Netspar

Alireza Khoshghadam

Jonkoping University - Jonkoping International Business School (JIBS)

Andrea Schneider

Jonkoping University - Jonkoping International Business School (JIBS)

Date Written: September 26, 2023

Abstract

We assess the impact of a Swedish regulatory change, which required businesses with any business-to-consumer transactions, whether by cash or card, to use a certified electronic cash register (ECR), on reported revenue. To do this, we use administrative data on the monthly reported revenue of all affected firms and a staggered difference-in-differences approach. Our findings indicate that there was an immediate increase of about 2-4% in reported revenue following the implementation of a certified ECR. However, the effect was temporary and diminished to zero after just a few months. The decline in revenue can be attributed either to firms finding innovative methods to underreport their revenue or to demand decreasing in response to a price increase brought about by the ECR.

Keywords: tax compliance, tax enforcement, cash register, regulatory change, small business

JEL Classification: H25, H26, M21, O17

Suggested Citation

Engström, Per and Hagen, Johannes and Khoshghadam, Alireza and Schneider, Andrea, Short-Lived Effects of Electronic Cash Registers on Reported Revenue (September 26, 2023). Available at SSRN: https://ssrn.com/abstract=4422195 or http://dx.doi.org/10.2139/ssrn.4422195

Per Engström

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden
+46 - 18 - 471 15 65 (Phone)
+46 - 18 - 471 14 78 (Fax)

HOME PAGE: http://www.nek.uu.se/cgi/staffpage.pl?PId=13,lang=eng

Johannes Hagen

Jönköping University ( email )

Gjuterigatan 5
Jönköping, 553 18
Sweden

HOME PAGE: http://www.johanneshagen.com

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Alireza Khoshghadam

Jonkoping University - Jonkoping International Business School (JIBS)

Andrea Schneider (Contact Author)

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

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