Cover IMF Working Papers
Digitalization and Tax Compliance Spillovers: Evidence from a VAT e-Invoicing Reform in Peru
Author:
Mr. Matthieu Bellon
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Ms. Era Dabla-Norris
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Salma Khalidnull

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Juan Carlos Paliza
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Jillie Changnull

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Pilar Villenanull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 057
Language:
English
Publication Date:
18 Mar 2022
DOI:
https://doi.org/10.5089/9798400204876.001
ISBN:
9798400204876
ISSN:
1018-5941
Pages:
40
Keywords:
VAT; tax compliance; technology spillovers; firm transaction data; transaction data; tax compliance Spillovers; downstream partner; technology adoption spillover; technology spillover; export-oriented firm; Value-added tax; Tax return filing compliance; Spillovers; Positive spillovers; Tax spillovers; Caribbean
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Our study uses administrative data on firm-to-firm transactions and quasi- experimental variation in the rollout of electronic invoicing reforms in Peru to study the diffusion of e-invoicing through firm networks and its effect on tax compliance. We find that voluntary e-invoicing adoption is higher amongst firms with partners who are mandated to adopt e-invoicing, implying positive technology adoption spillovers. Spillovers are stronger from downstream partners and from export-oriented firms. Firms are less likely to continue transacting with a partner who has been mandated into e-invoicing, with the effect only partially reversed if both firms adopt e-invoicing, suggesting that network segmentation may occur. Smaller firms who transact with partners mandated into e-invoicing report 11 percent more sales and pay 17 more VAT in the year that their partner is mandated to adopt e-invoicing, suggesting positive spillovers in tax compliance behavior for this subset of firms.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2022: Issue 057