Lipatov, Vilen (2006): Tax Evasion and Coordination.
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We consider corporate tax evasion as a decision affecting business partners. There are costs of uncoordinated tax reports, both in terms of catching inspectors' attention and running accounts. If these costs are small, there exist a unique Nash equilibrium of the game between the tax authority and a population of heterogenous firms. In this equilibrium, the miscoordination costs enhance non-compliance if and only if more than 50% of the firms are cheating. This provides one rationale for developing countries to be cautious with employing refined auditing schemes and for developed countries to promote complicated accounting procedures.
|Item Type:||MPRA Paper|
|Institution:||European University Institute|
|Original Title:||Tax Evasion and Coordination|
|Keywords:||tax evasion; coordination; business partners|
|Subjects:||H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H32 - Firm
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance
|Depositing User:||Vilen Lipatov|
|Date Deposited:||24. Dec 2006|
|Last Modified:||20. Feb 2013 21:01|
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