Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/254253 
Year of Publication: 
2022
Series/Report no.: 
IFS Working Paper No. W22/03
Publisher: 
Institute for Fiscal Studies (IFS), London
Abstract: 
This paper investigates the effect of electronic payments technology on firms' tax compliance in a large developing economy. We consider India's demonetization policy which, by limiting the availability of cash, led to a large increase in the use of electronic forms of payments. Using administrative data on firms' tax returns and variation in the strength of the demonetization shock across local areas, we find that greater use of electronic payments leads to firms reporting more sales to the tax authorities. This effect is strong enough to explain roughly half of the large (11%) increase in reported sales observed during demonetization.
Subjects: 
tax compliance
electronic payments
demonetization
JEL: 
H26
O23
H25
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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