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Randomized tax enforcement massages : a policy tool for improving audit strategies


Pomeranz, Dina; Marshall, Cristóbal; Castellón, Pamela (2014). Randomized tax enforcement massages : a policy tool for improving audit strategies. Tax Administration Review, (36):1-21.

Abstract

Reducing tax evasion is a key challenge for governments around the world, particularly in developing countries. This paper presents a methodology to generate information to optimize audit strategies. Randomly selected taxpayers receive a deterrence message. Comparing their subsequent tax payments to a control group allows estimating what types of taxpayers are more likely to respond to an increase in perceived audit probability. This information can be used to target audits toward taxpayers that respond particularly strongly, and to construct risk indicators to predict taxpayers’ responses. We show results from an application in Chile and describe lessons learned during the implementation.

Abstract

Reducing tax evasion is a key challenge for governments around the world, particularly in developing countries. This paper presents a methodology to generate information to optimize audit strategies. Randomly selected taxpayers receive a deterrence message. Comparing their subsequent tax payments to a control group allows estimating what types of taxpayers are more likely to respond to an increase in perceived audit probability. This information can be used to target audits toward taxpayers that respond particularly strongly, and to construct risk indicators to predict taxpayers’ responses. We show results from an application in Chile and describe lessons learned during the implementation.

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Additional indexing

Other titles:Improving audit strategies through randomized enforcementmessages : methodology and application in Chile
Item Type:Journal Article, not refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:January 2014
Deposited On:25 Apr 2017 15:22
Last Modified:23 Nov 2017 04:48
Publisher:Inter-American Center of Tax Administrators (C I A T)
ISSN:1684-9434

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