2014年-世界发展银行全球_Can_Tax_Simplification_Help_Lower_Tax_Corruption__58页_1mb

Can Tax Simplification Help Lower Tax Corruption?

Summary

Core Content

This paper investigates the empirical relationship between tax simplification and tax corruption, focusing on business taxes across 104 countries from 2002 to 2012. The study aims to determine whether reducing the complexity of tax systems can lead to a reduction in corruption within tax administrations.

Main Points

• Tax simplicity is defined using two key indicators:

  • Time to Comply (TAXTIME): The time required to prepare and file tax returns and make payments.
  • Number of Payments (TAXPAY): The number of tax payments a business must make in a year.

• Tax corruption is measured using firm-level data from the World Bank's Enterprise Survey Database, which includes responses from businesses on whether they were visited by tax officials and whether informal payments were requested during such visits.

• The tax corruption indicator is calculated as the ratio of "yes" responses to J5 (informal payments requested) to the total "yes" responses to J3 (tax inspections), representing the percentage of tax visits that involved bribery or informal payments.

• The study finds that:

  • A 10% reduction in the number of payments leads to a 4% decrease in tax corruption.
  • A 10% reduction in compliance time leads to a 6% decrease in tax corruption.
  • The combined effect of both reductions is predicted to result in a 9.64% decrease in tax corruption.

• Regional differences are observed:

  • Latin America and the Caribbean and Sub-Saharan Africa show a stronger response to tax simplification.
  • Lower-income countries experience a more significant impact of tax simplification on reducing corruption compared to higher-income countries.

• Policy implications suggest that:

  • Simplifying tax systems can reduce corruption without requiring major legislative changes.
  • Tax simplification measures can be implemented in tax laws and administration to improve compliance and reduce opportunities for corruption.
  • The paper provides a roadmap for tax simplification, emphasizing the importance of reducing compliance time and the number of payments.

Key Information

• Data Sources:

  • World Bank's Enterprise Survey Database: Used to measure tax corruption.
  • World Bank's Doing Business Database: Used to measure tax complexity via TAXTIME and TAXPAY.

• Methodology:

  • The study uses regression analysis and GMM technique to account for endogeneity.
  • Data imputation via the expectation maximization (EM) method is used to handle missing data in the Enterprise Survey.
  • The tax corruption ratio is constructed using firm-level data, not aggregate data.

• Limitations:

  • The Enterprise Survey does not cover all countries.
  • The data is not collected annually in all countries.
  • The definition of tax corruption may miss certain forms of bribery, such as those related to obtaining a tax clearance certificate or a refund.

Policy Recommendations

• Simplify tax regimes by reducing the number of tax payments and compliance time.
• Use electronic filing and payment systems to reduce opportunities for corruption.
• Focus on developing countries where the impact of tax simplification on corruption is more pronounced.
• Consider regional variations when designing tax simplification policies.
• The World Bank's Doing Business indicators are used as proxies for tax simplicity, despite some criticisms regarding their subjectivity and methodological limitations.

Conclusion

The paper concludes that tax simplification is strongly associated with lower levels of tax corruption. By reducing the complexity of tax systems, governments can enhance tax morale, compliance, and public trust in tax administration. The findings have important policy implications, encouraging the implementation of tax simplification measures as a tool to combat corruption in tax systems.