Corruption, Taxes and Compliance

Baum, Andrew; Gupta, Sanjeev; Kimani, Elijah; Tapsoba, Sampawende

doi:10.2139/ssrn.3104508

Cited by 6 publications

(4 citation statements)

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“…Tanzi and Davoodi (2000) point out that corruption hampers total tax revenues and that this effect differs according to the category of the tax considered in cross‐section analyses. Thornton (2008), Attila et al (2009), Imam and Jacobs (2014) and Baum et al (2017) also evidence similar findings that not only corruption has a negative effect on public revenues collection, but also modulates tax structure in favour of the tariffs whilst dipping direct and indirect revenues owing to rent‐seeking. Uslaner (2010) presents empirical findings that cover 27–28 transition economies from 2002 to 2005, which suggest that corruption negatively impacts tax payment decisions.…”

Section: Corruption Quality Of Public Policies and Fiscal Space In De...mentioning

confidence: 69%

Corruption, tax reform and fiscal space in emerging and developing economies

Yohou

2023

World Economy

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Several studies have demonstrated that corruption hinders efforts in enhancing public revenue and fiscal space through different channels. This paper assesses the effect of tax reform on fiscal space conditional on corruption control for a large panel of developing and emerging economies over 1990-2016. Using a threshold approach, our findings indicate that tax reform effect on fiscal space is not monotonic and depends on corruption control. Tax reform enhances fiscal space and tax revenue when corruption control is better. The results also suggest that heterogeneity across countries and time does matter. Individual estimates of elasticity of fiscal space to tax reform support evidence that countries that benefit most from tax reform are those that prove enough ability to control corruption.

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Section: Corruption Quality Of Public Policies and Fiscal Space In De...mentioning

confidence: 69%

Corruption, tax reform and fiscal space in emerging and developing economies

Yohou

2023

World Economy

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“…The level of corruption is included to control its potential effect on the quality of tax policy and administration as well as mobile money adoption. Indeed, corruption tends to penalise the quality of tax administration through its effect on tax compliance (Attila, Chambas and Combes 2009;Baum et al 2017). In addition, high corruption may dampen the population's trust in government and thus reduce the acceptance of or adoption of mobile money.…”

Section: Robustness Variablesmentioning

confidence: 99%

Finding the Missing Stone: Mobile Money and the Quality of Tax Policy and Administration

Apeti,

Edoh

2024

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Making tax administration more efficient and maximising voluntary compliance is a very difficult task for developing countries. In this paper, we analyse the effect of mobile money payments on the quality of tax policy and administration for a large sample of countries in developing economies. We use the World Bank indicator on efficiency of revenue mobilisation as a measure of the quality of tax policy and administration and employ an entropy balancing method to show that mobile money payments improve the quality of tax systems. This result is robust to several robustness tests, including sample alteration, alternative measures of mobile money, controlling for other aspects of tax policy, and alternative estimation methods such as GMM-system, event study approach and ordinary least square. In addition, our results show that the positive effect of mobile money on tax systems depends on the level of development, financial development, the state’s legitimacy, a country’s fiscal space, the number of available products/companies, the type of mobile money services, and the geographic position of countries. Finally, we highlight some potential mechanisms underlying these findings through lower tax compliance burden, smaller informal sector, and lower corruption.

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“…It hinders economic growth and the competitiveness of international trade when the costs of conducting business activities increase due to inflated prices resulting from bribery. Corruption also reduces the government's ability to implement regulations and take action to correct market failures, while providing an opportunity to impede government intervention due to motivations arising from corrupt behavior [4][5][6][7][8][9].…”

Section: Introductionmentioning

confidence: 99%

“…Empirical evidence also demonstrates that corruption reduces tax revenue. In fact, some studies have revealed that more than 50 percent of tax revenue goes uncollected due to corruption, which can have a substantial negative impact on economic growth and result in decreased human development [6,[18][19][20][21]. On the other hand, corruption affects public debt by lowering bond ratings, which in turn leads to higher costs of debt.…”

Section: Introductionmentioning

confidence: 99%

Decrypting the Relationship Between Corruption and Human Development: Evidence from Indonesia

Hardi,

Saputra,

Hadiyani

et al. 2023

Ekon. J. Econ.

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Corruption is considered endemic in a large part of the world's population and is believed to be a factor that disrupts market behavior and distorts competition, thereby hindering economic growth and human development. This study aims to unveil the impact of corruption on Indonesia's human development through various approaches, utilizing Fully-Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), Moderated Regression Analysis (MRA), Path Analysis, and Vector Error Correction Model (VECM) methods, with data covering the period from 1995 to 2022. The results of the estimation are discussed in three parts: 1) Dynamic Impact, by analyzing the long-term direct effect of corruption on human development; 2) Indirect Impact, by examining the role of government expenditure, tax revenue, and public debt in mediating the effect of corruption on human development; and 3) Causal Impact, by determining the unidirectional and bidirectional relationships between all variables studied. The findings indicate that corruption does not have a lasting direct impact on human development. Moreover, government expenditure and public debt play a role in moderating the impact of corruption on human development. Additionally, there is no causal link between corruption and human development, whereas there are causal connections between human development, government expenditure, tax revenue, and public debt. The results of this study will be valuable in assessing the extent of corruption's impact on human development, particularly in Indonesia, and aim to raise awareness of policymakers, hence encouraging individuals to participate in combating corruption.

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Corruption, Taxes and Compliance

Cited by 6 publications

References 0 publications

Corruption, tax reform and fiscal space in emerging and developing economies

Corruption, tax reform and fiscal space in emerging and developing economies

Finding the Missing Stone: Mobile Money and the Quality of Tax Policy and Administration

Decrypting the Relationship Between Corruption and Human Development: Evidence from Indonesia

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