Cost uncertainty and taxpayer compliance
Caballé, Jordi (Universitat Autònoma de Barcelona)
Panadés Martí, Judith (Universitat Autònoma de Barcelona)

Publicació:	Barcelona: CREA-Barcelona Economics, 2004
Resum:	The existence of a private cost borne by audited taxpayers affects the tax enforcement policy. This is so because tax auditors will face now two sources of uncertainty, namely, the typical one associated with taxpayers' income and that associated with the taxpayers' idiosyncratic attitude towards tax compliance. Moreover, the inspection policy can be exposed to some randomness from the taxpayers' viewpoint due to the uncertainty about the audit cost borne by the tax authority. In this paper we provide an unified framework to analyze the effects of all these sources of uncertainty in a model of tax compliance with strategic interaction between auditors and taxpayers. We show that more variance in the distribution of the taxpayers' private cost of evading raises both tax compliance and the ex-ante welfare of taxpayers. The effects of the uncertainty about the audit cost faced by the tax authority are generally ambiguous. We also discuss the implications of our model for the regressive (or progressive) bias of the effective tax system.
Ajuts:	Ministerio de Ciencia y Tecnología SEC2003-306 Ministerio de Ciencia y Tecnología HI2001-0039 Generalitat de Catalunya 2001 / SGR-00162
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Llengua:	Anglès
Col·lecció:	CREA working paper; 127
Document:	Working paper ; recerca ; Article ; Versió publicada
Matèria:	Audit cost ; Tax evasion
Publicat a:	CREA Centre de Referència en Economia Analítica Working Paper Series, 2004

Adreça alternativa: https://bse.eu/research/working-papers/cost-uncertainty-and-taxpayer-compliance

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