Tax Evasion and Corruption in Tax Administration

  title={Tax Evasion and Corruption in Tax Administration},
  author={Maurizio d’Amato and Rodriguez Martina},
In this paper we consider a simple economy where self interested tax payers may have incentives to evade taxes and, to escape sanctions, to bribing public o¢cials in charge for collection. We analyze the interactions between evasion, corruption and monitoring as well as their adjustment to a change in the institutional setting. At equilibrium we ...nd that the e¤ects of a tougher deterrence policy, increasing ...nes, reduces evasion, whereas its e¤ect on corruption is ambiguous. The normative… CONTINUE READING

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