Does going cashless make you tax-rich? Evidence from India’s demonetization experiment

Cashless Payments and Tax Evasion: Evidence From VAT Gaps in the EU

“…Although our study does not focus on whether these investments may lead to population-level, VAT compliance gap reductions detectable at conventional levels of statistical significance, our findings indicate that nearly costless behavioral changes in transaction payment norms such as the adoption of cashless payments may also yield significantly more tax revenues at a, presumably, significantly lower tax price to traditional tax enforcement strategies such as audits. Policies designed to increase e-money usage and decrease cash circulation such as those adopted in Italy, Greece or India are relevant steps into this direction (Hondroyiannis and Papaoikonomou, 2017;Sands et al, 2017;Danchev et al, 2020;Russo, 2022;Das et al, 2023). Future research could investigate more deeply whether a policy increasing e-money usage with the explicit aim to improve tax compliance has the same effects as the PHE policies studied in this paper.…”

Towards a Digital Revolution: Investigating the Impact of GDP, Tax Collection, and Interest Rates on Cashless Economy in India

“…Embracing cashless payment methods can enhance tax collection capabilities, as digital transactions are easier to track and monitor, reducing opportunities for tax evasion and increasing overall compliance. The resulting increased tax revenue can be utilized to fund welfare programs and initiatives that further stimulate economic growth (Bourreau et al, 2018;Garg & Panchal, 2017;Das et al, 2023) The role of interest rates cannot be understated in influencing consumer behavior and investment patterns. Fluctuations in interest rates can affect borrowing costs, spending patterns, and saving behavior, all of which impact the adoption and usage of digital payment platforms.…”