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Corruption and tax compliance: evidence from small retailers in Bamako, Mali

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  • Luisito Bertinelli
  • Arnaud Bourgain
  • Florian Léon

Abstract

We investigate the impact of corruption on tax compliance using a sample of 700 small business in Bamako, Mali. The main contribution of this paper is to focus on micro-enterprises (including semi-formal and informal ones), while existing works concentrate on large and formal firms. Our results show that (i) even very small firms pay taxes (two-thirds of firms pay taxes in our sample); and, (ii) paying bribes reduces significantly tax compliance. This latter finding is robust (i) to the addition of a set of control variables accounting for other determinants, (ii) to treatment for endogeneity, and (iii) the use of a different proxy for tax compliance.

Suggested Citation

  • Luisito Bertinelli & Arnaud Bourgain & Florian Léon, 2020. "Corruption and tax compliance: evidence from small retailers in Bamako, Mali," Applied Economics Letters, Taylor & Francis Journals, vol. 27(5), pages 366-370, March.
    • Handle: RePEc:taf:apeclt:v:27:y:2020:i:5:p:366-370
    DOI: 10.1080/13504851.2019.1616057
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    More about this item

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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