Tax evasion and misreporting in income tax returns and household income surveys
This paper studies tax evasion and misreporting by comparing data from income tax files and a survey of household incomes, both relative to a medium-size Italian town. The novelty of our approach lies in the use of individual microdata, obtained by "exact matching" between the two data sources. As usual, the adopted proxy for tax evasion is the difference between survey income and tax-declared income. Our results lend support to the widely shared belief that in Italy the propensity to evade is higher among the self-employed. However, our findings do not bear out the existence, which emerged in previous studies, of a negative relationship between tax evasion and income levels. Underreporting seems to be concentrated in the lowest income deciles, while the level of tax evasion is higher at the top of the income distribution. Notwithstanding the reliability of the statistical base, our results must be accepted with caution, as the measure of tax evasion adopted is not able to make a clear distinction between evasion and misreporting.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:mul:je8794:doi:10.1429/30792:y:2009:i:3:p:333-348. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.