A conditional directional distance function approach for measuring tax collection efficiency: evidence from Spanish regional offices

Abstract

This paper analyzes the evolution of the technical efficiency of Spanish regional tax offices with respect to the main devolved taxes for the period 2005-2014. We apply the conditional directional distance function methodology, which allows us to incorporate undesirable outputs into the production function, represented by administrative complaints lodged by taxpayers as an (inverse) measure of the quality of service provision, and account for the influence of the socioeconomic context in which these offices operate. This methodology has been adapted for application in a dynamic context in order to analyze how the performance of these units has evolved over a period that includes different stages of the economic cycle. The main results show that efficiency levels have fallen over the period, especially since the start of the economic recession. Likewise, we identify that the influence of incomes and fiscal capacity are especially significant explanatory factors of this evolution.

Technical and managerial efficiency assessment of European banks using a conditional nonparametric approach

“…In this line, Cordero et al. (2018) argued that the main problem of the unconditional efficiency model is that it relies on an assumption that may be unrealistic. Indeed, in this model, it is implicitly assumed that all DMUs are operating under similar conditions.…”

A Novel Approach to Measuring the Performance of Tax Administrations

“…Second, our findings prioritize Value Revenue Collected as the main group of drivers for the overall performance of TAs. Usual 'suspects' investigated in other studies are digitalization and the use of novel technologies (Faúndez-Ugalde et al 2020;Martínez et al 2022) and human resources and culture of taxation (Chuenjit 2014;Radonić and Milosavljević 2019). Contrary to the findings of previous studies, we identified the variables in the operational excellence group (on-time filling and e-filling) as indicators that will drive excellence in the years to come.…”

“…Fourth, we also emphasize that the CIDI methodology used in this research is data-driven rather than biased. Although some authors would prefer that a weighting scheme of composite indicators should reflect the intuitive and biased importance of the individual sub-indicators, our research is predominantly guided by the methods that advocate data-driven results, such as Data Envelopment Analysis (DEA) (Charnes et al 1978;Milanović et al 2022) or Distance Based Analysis (DBA) (Dobrota et al 2015a). Additionally, through the CIDI methodology, we provide a transparent composite indicator that is easily interpretable and comprehensive.…”

“…Accordingly, tax administration performance is a multifaceted phenomenon, and measuring and benchmarking its performance against other countries or regions remains a puzzle for researchers and practitioners (Arltová and Kot 2023;Belmonte-Martin et al 2021). Many attempts have been made to measure the performance of tax administrations (Cordero et al 2021;Crandall 2010;Efecan Aktaş 2023;Nguyen et al 2020). Moreover, in the last few decades, an enormous amount of research has been carried out to explain, examine, and measure the performance of Tas (Gerritsen 2023).…”

Measuring the Efficiency of Tax Collection among Economic Sectors in Paraíba State Northeastern Brazil (2013-2015)

“…In Brazil, the continuous process of increasing tax burden registered in the last decades constrains tax collection by government (Mariano, 2005). Base erosion, which constitutes a serious risk to tax revenues, and recession affect the inefficiency of tax collection and constitute a serious barrier for local development process (Cordero, Dí az-Caro, Pedraja-Chaparro & Tzeremes, 2018). In this scenario, decreasing of public investments and competition for savings are inevitable (Schwengber & Ribeiro, 2000).…”