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Tax Evasion from Cross-Border Fraud: Does Digitalization Make a Difference?
Author:
Emmanouil Kitsios
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,
João Tovar Jalles
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Ms. Genevieve Verdier
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Series:
IMF Working Papers
Volume/Issue:
Volume 2020: Issue 245
Language:
English
Publication Date:
13 Nov 2020
DOI:
https://doi.org/10.5089/9781513561189.001
ISBN:
9781513561189
ISSN:
1018-5941
Pages:
16
Keywords:
panel data; fiscal policy; carousel fraud; e-government; technology; taxation; WP; tariff revenue; digitalization index; tax authority; transaction data; government policy; digitalization; tax evasion; VAT revenue; Value-added tax; Tariffs; Imports; Sub-Saharan Africa; Africa; North Africa; East Africa; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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How can governments reduce the prevalence of cross-border tax fraud? This paper argues that the use of digital technologies offers an opportunity to reduce fraud and increase government revenue. Using data on intra-EU and world trade transactions, we present evidence that (i) cross-border trade tax fraud is non-trivial and prevalent in many countries; (ii) such fraud can be alleviated by the use of digital technologies at the border; and (iii) potential revenue gains of digitalization from reducing trade fraud could be substantial. Halving the distance to the digitalization frontier could raise revenues by over 1.5 percent of GDP in low-income developing countries.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2020: Issue 245