Bribes and Business Tax Evasion

European Journal of Comparative Economics, Vol. 6, No. 2, pp. 227-244, December 2009

26 Pages Posted: 27 May 2006 Last revised: 26 Jan 2010

See all articles by David Joulfaian

David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA); Georgetown University - Department of Economics

Date Written: August 13, 2009

Abstract

This paper investigates the role of governance, in particular tax related bribes, in shaping business tax compliance behavior. The empirical results show that business noncompliance rises with corruption. More specifically, the findings from 27 transition economies suggest that tax evasion thrives when bribes to tax officials are commonplace. These findings are robust to a number of specifications that control for firm and country attributes. They also highlight the potential endogeneity of bribes.

Keywords: Tax Evasion, Firm Behavior, Bribes

JEL Classification: H25, H26, H32, D73

Suggested Citation

Joulfaian, David, Bribes and Business Tax Evasion (August 13, 2009). European Journal of Comparative Economics, Vol. 6, No. 2, pp. 227-244, December 2009. Available at SSRN: https://ssrn.com/abstract=904689

David Joulfaian (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
Washington, DC 20220
United States

Georgetown University - Department of Economics ( email )

37th St NW & O St NW
Washington, DC 20007
United States

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