Fighting Collaborative Tax Evasion
نویسنده
چکیده
We build a model where a buyer negotiates a price discount with a seller in exchange for not asking the receipt and paying in cash, allowing tax evasion. Sellers and buyers are heterogeneous with respect to their tax morale and to their cost of managing payment instruments different from cash. We study how a tax rebate for the buyer and a tax on cash withdrawals affect tax evasion and government revenue. We found that an appropriate mix of these two instruments can reduce tax evasion while, at the same time, raising additional revenue. We discuss the implementation problems of the tax on cash withdrawals and we suggest how to overcome them. JEL: O17, H21
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