Presumptive taxation and firms’ efficiency: an integrated approach for tax compliance analysis

ferrara, giancarlo and campagna, arianna and bucci, valeria and atella, vincenzo (2021): Presumptive taxation and firms’ efficiency: an integrated approach for tax compliance analysis.

Abstract

Presumptive taxation methods are policy tools widespread adopted by fiscal authorities with the aim to improve voluntary tax compliance and to fight tax evasion. Such methods allow authorities to uncover firms’ under-reporting, but face several limits. In particular, presumptive taxation methods do not allow to disentangle when the presence of under-reporting is ascribable to tax evasion behaviour or to the lack of managerial skills and inefficiency. To overcome the main presumptive taxation weakness, we propose combining presumptive frameworks with a measure of technical efficiency, thus developing an integrated approach for tax evasion analysis able to support the audit activities of fiscal authorities. Further, we provide some considerations in terms of tax compliance and support our approach with evidence obtained from an empirical application based on Italian firms.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tax Compliance, Presumptive Taxation, Efficiency, Stochastic Frontier, Business Sector Studies
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C14 - Semiparametric and Nonparametric Methods: General; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance; H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H32 - Firm

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