Can Tax Simplification Help Lower Tax Corruption?

Awasthi, Rajul ; Bayraktar, Nihal

World Bank Group, Washington, DC

关键词: ACCOUNTING;    BANK POLICY;    BOND;    BUSINESS ENVIRONMENT;    BUSINESS TAXES;   

DOI  :  10.1596/1813-9450-6988
RP-ID  :  WPS6988

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper seeks to find empiricalevidence of a link between tax simplification and corruptionin tax administration. It attempts to do this by firstdefining "tax simplicity" as a measurable variableand exploring empirical relationships between simpler taxregimes and corruption in tax administration. Corruption intax administration is calculated with data series from theWorld Bank's Enterprise Survey Database. The focus ison business taxes. The study includes 104 countries fromdifferent income groups and regions of the world. The timeperiod is 2002-12. The empirical findings support theexistence of a significant link between the measure of taxcorruption and tax simplicity, so a less complex tax systemis shown to be associated with lower corruption in taxadministration. It is predicted that the combined effect ofa 10 percent reduction in both the number of payments andthe time to comply with tax requirements can lower taxcorruption by 9.64 percent. Some interesting regionaldifferences are observed in the results. Similarly, theincome level of countries plays an important role indetermining the impact of tax simplification on taxcorruption; specifically, the link is stronger forlower-income level countries. The positive link between taxsimplicity and lower tax corruption has useful policy implications.