Consumers as VAT "evaders": incidence, social bias, and correlates in Colombia

Fergusson, Leopoldo, Molina, Carlos and Riaño, Juan Felipe (2019) Consumers as VAT "evaders": incidence, social bias, and correlates in Colombia. Economía, 19 (2). 21 - 67. ISSN 1529-7470

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Abstract

Tax evasion lies at the core of the relationship between citizens and the state: it reflects the level of trust in the state and compliance with society’s implicit social contract. However, empirically analyzing tax evasion is challenging, particularly because there are few direct and reliable measures. We conduct list experiments on a large sample of households to estimate how frequently consumers are willing to be complicit in value added tax (VAT) evasion, as well as the extent of social desirability bias in respondent answers. Around 20 percent of respondents agree to make purchases without a receipt in order to avoid paying VAT; surprisingly, they are not ashamed to admit this openly. Evasion is more prevalent in places with more informality and less physical presence of the state, as well as among poorer, less educated individuals and those who disregard the rule of law.

Item Type:	Article
Official URL:	https://economia.lse.ac.uk/
Additional Information:	© 2019 LACTEA
Divisions:	LSE
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HV Social pathology. Social and public welfare. Criminology H Social Sciences > HF Commerce
JEL classification:	C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy; Administrative Processes in Public Organizations; Corruption H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion C - Mathematical and Quantitative Methods > C8 - Data Collection and Data Estimation Methodology; Computer Programs > C80 - General
Date Deposited:	05 Aug 2024 23:14
Last Modified:	14 Sep 2024 10:00
URI:	http://eprints.lse.ac.uk/id/eprint/123049

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