Small Business Tax Policy, Informality, and Tax Evasion : Evidence from Georgia

Bruhn, Miriam ; Loeprick, Jan

World Bank Group, Washington, DC

关键词: ACCOUNTING;    ADDED TAX;    ADMINISTRATIVE COSTS;    ADMINISTRATIVE REFORMS;    ASSISTANCE TO BUSINESSES;   

DOI  :  10.1596/1813-9450-7010
RP-ID  :  WPS7010

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Using a panel of administrative data andregression discontinuity analysis, this paper examines howthe introduction of preferential tax regimes for Georgianmicro and small businesses in 2010 affects formal firmcreation and tax compliance. The results show that the newtax regime for micro businesses increased the number ofnewly registered formal firms by 18-30 percent below theeligibility threshold during the first year of the reform,but not in subsequent years. The analysis does not find aneffect of the new tax regime for small businesses on formalfirm creation in any year. Policy makers are often concernedabout abuse risks stemming from differentiated tax treatmentof micro and small businesses. The analysis in this paperreveals reduced tax compliance in 2010 around the microbusiness eligibility threshold, but does not findsignificant evidence of reduced compliance by Georgian firmsin later years. The results also do not show any significantevidence of strategic sorting around the regime eligibility thresholds.