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Title:Tax rates and tax evasion: an empirical analysis of the structural aspects and long-run characteristics in Italy PDF Logo
Authors:Chiarini, Bruno
Marzano, Elisabetta
Schneider, Friedrich G.
Issue Date:2008
Series/Report no.:IZA Discussion Papers 3447
Abstract:By using official time series of the Italian evaded VAT base (Ministry of Finance) for the period 1980-2004 we investigate empirically the long-run characteristics of tax evasion and the relationship with the tax burden. We focus on three important issues not analyzed so far. First, using different measures of aggregate economic activity as reference variables in estimating the average tax burden, we investigate the size and dynamics of the over-burden traceable back to tax evasion. Second, exploiting cointegration techniques, we quantify the elasticity between tax evasion and the average tax rate in Italy. We then comment on the complex dynamic interaction between tax burden and tax evasion, to ascertain whether in the Italian experience there is evidence for any vicious circle between them.
Subjects:Tax evasion
VAT evasion
effective tax rate
apparent tax rate
VECM
JEL:H30
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008042116
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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