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Enhancing Tax Compliance in the Dominican Republic Through Risk-based VAT Invoice Management
Author:
Cristian Alonso
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,
Ledys Feliz
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,
Patricia Gil
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Miguel Pecho
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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 231
Language:
English
Publication Date:
10 Sep 2021
DOI:
https://doi.org/10.5089/9781513595924.001
ISBN:
9781513595924
ISSN:
1018-5941
Pages:
32
Keywords:
invoice management; filing obligation; compliance history; authorized invoice; compliance strategy; Value-added tax; Income and capital gains taxes; Tax administration core functions; Tax arrears management; Small and medium enterprises; Caribbean
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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Invoices document economic transactions and are thus critical to assess tax liabilities. We study a reform in the Dominican Republic that aimed to integrate invoice management into a broader, more comprehensive, risk-based compliance strategy. By rationing authorized invoices based on an extra scrutiny of each taxpayer’s compliance history, the reform led to significant and persistent improvements on filing, payment, and information reporting obligations and a modest increase in reported tax liabilities. Our study shows that deterrence effects over compliance behaviors are strengthened when the tax administration makes explicit and active use of taxpayers’ information, no matter if the invoicing framework is paper-based or electronic.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund