Regional tax evasion and audit enforcement

ABSTRACT

Regional tax evasion and audit enforcement. Regional Studies. Using an original panel dataset on tax gap and audits, this paper sheds light on the impact of audit and enforcement on the Italian regional tax evasion over the period 2001–11. Spatial econometric models were used to model regional tax gaps and to control for endogeneity issues and spatial patterns. Results provide evidence that greater enforcement increases tax compliance. A higher probability of targeted audits and additional schemes to increase the disclosure of declared income decrease the tax gap. The paper provides a general framework to study determinants of tax evasion at the regional level.

摘要

区域逃税与实施审计。Regional Studies. 本文运用税差和审计的原初面板数据集，对审计实施之于意大利2001年至2011年间的区域逃税之影响提出洞见。本研究运用空间计量经济模型模式化区域税差，并控制内生议题和空间模式。研究结果证实，实施更多的审计提升了守法纳税。更大的针对性审计之可能性，以及增加揭露宣称所得的额外方案，降低了税差。本文提供一个研究区域层级逃税的决定因素之普遍架构。

RÉSUMÉ

Évasion fiscale locale et application de l’audit. Regional Studies. À l’aide d’un ensemble de données originales recueillies par panel sur les écarts fiscaux et les audits, la présente communication apporte quelques éclaircissements sur l’impact de l’audit et son application en ce qui concerne l’évasion fiscale à l’échelon régional en Italie, au cours de la période 2001–11. On fait usage de modèles d’économétrie spatiale pour modéliser les manques à gagner fiscaux régionaux et contrôler les aspects endogènes et les tendances spatiales. Les résultats démontrent qu’un renforcement de l’application accroît l’observation des règles fiscales. Une majeure probabilité des audits ciblés et de systèmes additionnels pour accroître les déclarations du revenu entraîne une réduction du manque à gagner fiscal. La présente communication fournit un cadre général pour étudier les aspects déterminants de l’évasion fiscale à l’échelon régional.

ZUSAMMENFASSUNG

Regionale Steuerhinterziehung und Prüfungsvollzug. Regional Studies. In diesem Beitrag untersuchen wir mithilfe eines Original-Paneldatensatzes über Steuerlöcher und Steuerprüfungen die Auswirkungen von Prüfungen und Vollzug auf die regionale Steuerhinterziehung in Italien im Zeitraum von 2001 bis 2011. Zur Modellierung der regionalen Steuerlöcher und zur Kontrolle auf Endogenitätsprobleme und räumliche Muster kamen räumliche ökonometrische Modelle zum Einsatz. Aus den Ergebnissen geht hervor, dass ein stärkerer Vollzug die Einhaltung der Steuervorschriften fördert. Durch eine höhere Wahrscheinlichkeit von zielgerichteten Prüfungen und zusätzlichen Maßnahmen zur Erhöhung der ausgewiesenen Einkünfte verringert sich das Steuerloch. Der Beitrag bietet einen generellen Rahmen zur Untersuchung der Determinanten der Steuerhinterziehung auf regionaler Ebene.

RESUMEN

Evasión de impuestos regional y aplicación de auditorías. Regional Studies. A partir de un grupo de datos de panel original sobre la brecha tributaria y las auditorías, en este artículo arrojamos luz sobre el impacto de las auditorías y la aplicación en la evasión de impuestos en las regiones italianas durante el periodo de 2001 a 2011. Se utilizaron modelos econométricos espaciales para modelar las brechas tributarias regionales y controlar las cuestiones de endogeneidad y patrones espaciales. Los resultados aportan pruebas de que cuanto mayor es la aplicación mayor es el cumplimiento fiscal. Una mayor probabilidad de auditorías y esquemas adicionales orientados para aumentar los ingresos declarados disminuye la brecha tributaria. En este artículo se proporciona un contexto general para estudiar los determinantes de la evasión de impuestos en un ámbito regional.

KEYWORDS:

• tax evasion
• Italian regional tax gap
• spatial econometrics
• panel estimation

关键词:

• 逃税
• 意大利区域税差
• 空间计量经济学
• 面板估计

MOTS-CLÉS:

• évasion fiscale
• manque a gagner régional en Italie
• économétrie spatiale
• estimation par panel

SCHLÜSSELWÖRTER:

• Steuerhinterziehung
• regionales Steuerloch in Italien
• räumliche Ökonometrie
• Panelschätzung

PALABRAS CLAVES:

• evasión de impuestos
• brecha tributaria en las regiones italianas
• factores econométricos espaciales
• estimación de panel

JEL:

• C21
• C23
• E26
• H26

ACKNOWLEDGEMENTS

The authors thank the anonymous referees for their useful suggestions and comments. The opinions expressed and the conclusions drawn in this paper are those of the authors and do not necessarily reflect the views of the Italian Revenue Agency.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

SUPPLEMENTAL DATA

Supplemental data for this article can be accessed at https://doi.org10.1080/00343404.2017.1299934.

ORCiD

Alfonso Carfora http://orcid.org/0000-0002-5805-8198

Rosaria Vega Pansini http://orcid.org/0000-0003-0823-0508

Notes

1. Total tax gap is the sum of evasion related to value-added tax (VAT), personal income tax (namely, IRPEF), corporate income tax (namely, IRES) and tax on production activities (namely, IRAP), which are taxes under the duty IRA. For details on the calculation of the tax gap, see Braiotta et al. (2015).

2. For each i region we calculate the average TG as the ratio between the average tax gap (2001–11) and the average PTR (2001–11) as:

3. Endogeneity issues are eluded as this variable measures the ratio between non-congruous taxpayers and total taxpayers subjected to ‘studi di settore’; it does not refer to any amount of collectable and evaded taxes.

4. Since their institution in 1993 by Law n. 427, ‘studi di settore’ require that taxpayers subject to this audit scheme must attach to their tax return file a form containing information required in order to estimate their revenues. While they are obliged to fill in the form, they are not obliged to respect the criteria of congruity and coherence. For details on the effects of ‘studi di settore’ audit scheme on tax compliance, see Santoro and Fiorio (2011).

5. The two main tax-debt write-offs have been approved by Law n. 289 of December 2002 (fiscal amnesty) and Law n. 102 of August 2009 (tax shelter).

6. For the sake of simplicity of Table 1, the variable Lag(TG) indicates, alternatively, the time-lagged tax gap in the dynamic panel specification and the spatial-lagged tax gap in the SARSAR model.

7. As stated by Italian law, large firms are subject to a specific ‘tutoring’ activity by the IRA consisting of a detailed and longlasting fiscal assistance. Moreover, large firms are subject to several additional rules involving the widespread use of electronic payment and invoicing in business conduct that limit the opportunities of evasion.