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The Incentive to Declare Taxes and Tax Revenue: The Lottery Receipt Experiment in China

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  • Junmin Wan

Abstract

Indirect tax such as sales tax collection is difficult as the government has difficulty monitoring the actual economic dealings. To bring out private information on transaction only known to a firm and a consumer, China's government has set up a lottery receipt system which has been tried out in many areas. This paper empirically examines the validity of this new system. Estimation is performed based on panel data for different periods during 1998-2003 from a total of 37 districts in Beijing and Tianjin. It is found that the lottery receipt experiment (LRE) has significantly raised the sales tax and the growth of sales tax and total tax revenues. Copyright (C) 2010 Blackwell Publishing Ltd.

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  • Junmin Wan, 2010. "The Incentive to Declare Taxes and Tax Revenue: The Lottery Receipt Experiment in China," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 611-624, August.
    • Handle: RePEc:bla:rdevec:v:14:y:2010:i:s1:p:611-624
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    1. Junmin Wan, 2010. "The Incentive to Declare Taxes and Tax Revenue: The Lottery Receipt Experiment in China," Review of Development Economics, Wiley Blackwell, vol. 14(3), pages 611-624, August.
    2. Kim, Junghun, 2005. "Tax reform issues in Korea," Journal of Asian Economics, Elsevier, vol. 16(6), pages 973-992, December.
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    6. Christopher Bajada & Friedrich Schneider, 2005. "The Shadow Economies Of The Asia-Pacific," Pacific Economic Review, Wiley Blackwell, vol. 10(3), pages 379-401, October.
    7. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
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    Cited by:

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    7. World Bank, 2014. "More Jobs, Better Jobs : A Priority for Egypt," World Bank Publications - Reports 20584, The World Bank Group.
    8. Fatas, Enrique & Nosenzo, Daniele & Sefton, Martin & Zizzo, Daniel John, 2021. "A self-funding reward mechanism for tax compliance," Journal of Economic Psychology, Elsevier, vol. 86(C).
    9. M. Martin Boyer & Philippe d'Astous, 2023. "Tax compliance and firm response to electronic sales monitoring," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(4), pages 1430-1468, November.
    10. Kateřina Krzikallová & Filip Tošenovský, 2020. "Is the Value Added Tax System Sustainable? The Case of the Czech and Slovak Republics," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    11. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    12. Lotta Björklund Larsen, 2023. "Game of tax: Rethinking the relationship between redistribution and reciprocity through a Georgian tax lottery," Economic Anthropology, Wiley Blackwell, vol. 10(1), pages 100-111, January.
    13. Wan, Junmin, 2021. "The lottery receipt," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 733-750.

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