IDEAS home Printed from https://ideas.repec.org/a/wei/journl/v11y2021i2p221-235.html
   My bibliography  Save this article

Does Digitalisation in Public Services Reduce Tax Evasion?

Author

Listed:
  • Cristina Strango

    (Faculty of Economics and Business Administration, West University of Timisoara, Timisoara, Romania)

Abstract

The aim of this paper is to investigate the impact of digitalisation from public services on tax evasion. The analysis targets the European Union 27 (EU-27) member states over the period 2015-2019 by using panel estimators. The findings prove a nonlinear U-shaped relationship between digitalisation from public services and tax evasion in the former communist EU countries. More precisely, the acceleration of digitalisation in public services reduces the level of tax evasion up to a certain point. Once the acceleration reaches that point, the level of tax evasion increases once again. The impact of digitalization on tax evasion seems to be rather neutral in the non-ex-communist EU group, due to the digitalization process being very advanced.

Suggested Citation

  • Cristina Strango, 2021. "Does Digitalisation in Public Services Reduce Tax Evasion?," Economic Research Guardian, Mutascu Publishing, vol. 11(2), pages 221-235, December.
    • Handle: RePEc:wei:journl:v:11:y:2021:i:2:p:221-235
    as

    Download full text from publisher

    File URL: https://www.ecrg.ro/files/p2021.11(2)2021ySI1y5.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James Alm, 2021. "Tax evasion, technology, and inequality," Economics of Governance, Springer, vol. 22(4), pages 321-343, December.
    2. Simon Johnson & Daniel Kaufmann & John McMillan & Christopher Woodruff, 2007. "Why Do Firms Hide? Bribes and Unofficial Activity after Communism," Palgrave Macmillan Books, in: Erik Berglöf & Gérard Roland (ed.), The Economics of Transition, chapter 10, pages 335-359, Palgrave Macmillan.
    3. Jonathan S. Feinstein, 1991. "An Econometric Analysis of Income Tax Evasion and its Detection," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 14-35, Spring.
    4. Michele Bernasconi & Alberto Zanardi, 2004. "Tax Evasion, Tax Rates, and Reference Dependence," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 422-445, September.
    5. Amrit Tiwana & Benn Konsynski & Ashley A. Bush, 2010. "Research Commentary ---Platform Evolution: Coevolution of Platform Architecture, Governance, and Environmental Dynamics," Information Systems Research, INFORMS, vol. 21(4), pages 675-687, December.
    6. Emmanouil Kitsios & João Tovar Jalles & Geneviève Verdier, 2023. "Tax evasion from cross-border fraud: does digitalization make a difference?," Applied Economics Letters, Taylor & Francis Journals, vol. 30(10), pages 1400-1406, June.
    7. Senyo, P.K. & Effah, John & Osabutey, Ellis L.C., 2021. "Digital platformisation as public sector transformation strategy: A case of Ghana's paperless port," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    8. Uyar, Ali & Nimer, Khalil & Kuzey, Cemil & Shahbaz, Muhammad & Schneider, Friedrich, 2021. "Can e-government initiatives alleviate tax evasion? The moderation effect of ICT," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    9. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
    10. Brown, A. & Fishenden, Jerry & Thompson, M. & Venters, Will, 2017. "Appraising the impact and role of platform models and Government as a Platform (GaaP) in UK Government public service reform: towards a Platform Assessment Framework (PAF)," LSE Research Online Documents on Economics 73864, London School of Economics and Political Science, LSE Library.
    11. Friedland, Nehemiah & Maital, Shlomo & Rutenberg, Aryeh, 1978. "A simulation study of income tax evasion," Journal of Public Economics, Elsevier, vol. 10(1), pages 107-116, August.
    12. Robert W. McGee (ed.), 2012. "The Ethics of Tax Evasion," Springer Books, Springer, number 978-1-4614-1287-8, March.
    13. Robert W. McGee, 2012. "Christian Views on the Ethics of Tax Evasion," Springer Books, in: Robert W. McGee (ed.), The Ethics of Tax Evasion, chapter 0, pages 201-210, Springer.
    14. Yitzhaki, Shlomo, 1974. "Income tax evasion: A theoretical analysis," Journal of Public Economics, Elsevier, vol. 3(2), pages 201-202, May.
    15. Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-373, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marwin Heinemann & Wojciech Stiller, 2023. "Digitalization and Cross-Border Tax Fraud: Evidence from E-Invoicing in Italy," CESifo Working Paper Series 10227, CESifo.
    2. Bruno Emmanuel Ongo Nkoa & Jacques Simon Song, 2022. "Les canaux de transmission des effets des TIC sur la mobilisation des recettes fiscales en Afrique," African Development Review, African Development Bank, vol. 34(S1), pages 80-101, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dhami, Sanjit & Al-Nowaihi, Ali, 2010. "Optimal taxation in the presence of tax evasion: Expected utility versus prospect theory," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 313-337, August.
    2. Sanjit Dhami & Narges Hajimoladarvish, 2020. "Mental Accounting, Loss Aversion, and Tax Evasion: Theory and Evidence," CESifo Working Paper Series 8606, CESifo.
    3. Amedeo Piolatto & Matthew D. Rablen, 2017. "Prospect theory and tax evasion: a reconsideration of the Yitzhaki puzzle," Theory and Decision, Springer, vol. 82(4), pages 543-565, April.
    4. Çule, Monika & Fulton, Murray, 2009. "Business culture and tax evasion: Why corruption and the unofficial economy can persist," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 811-822, December.
    5. Matthew D. Rablen, 2010. "Tax Evasion and Exchange Equity: A Reference-Dependent Approach," Public Finance Review, , vol. 38(3), pages 282-305, May.
    6. Dhami, Sanjit & al-Nowaihi, Ali, 2007. "Why do people pay taxes? Prospect theory versus expected utility theory," Journal of Economic Behavior & Organization, Elsevier, vol. 64(1), pages 171-192, September.
    7. Michele Bernasconi & Rosella Levaggi & Francesco Menoncin, 2020. "Dynamic Tax Evasion with Habit Formation in Consumption," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 966-992, July.
    8. Torgler, Benno & Schneider, Friedrich & Schaltegger, Christoph A., 2007. "With or Against the People? The Impact of a Bottom-Up Approach on Tax Morale and the Shadow Economy," Berkeley Olin Program in Law & Economics, Working Paper Series qt6331x6vz, Berkeley Olin Program in Law & Economics.
    9. Fortin, Bernard & Lacroix, Guy & Villeval, Marie-Claire, 2007. "Tax evasion and social interactions," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2089-2112, December.
    10. Mathieu Lefebvre & Pierre Pestieau & Arno Riedl & Marie-Claire Villeval, 2011. "Tax Evasion, Welfare Fraud, and the « Broken Windows » Effect : An Experiment in Belgium, France and the Netherlands," Working Papers 1116, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    11. Bayer, Ralph-C & Sutter, Matthias, 2009. "The excess burden of tax evasion--An experimental detection-concealment contest," European Economic Review, Elsevier, vol. 53(5), pages 527-543, July.
    12. James Alm, 2012. "Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 54-77, February.
    13. Klarita Gërxhani, 2004. "The Informal Sector in Developed and Less Developed Countries: A Literature Survey," Public Choice, Springer, vol. 120(3_4), pages 267-300, September.
    14. Cécile Bazart, 2002. "Les comportements de fraude fiscale. Le face à face contribuables — administration fiscale," Revue Française d'Économie, Programme National Persée, vol. 16(4), pages 171-212.
    15. Joel Slemrod & Caroline Weber, 2012. "Evidence of the invisible: toward a credibility revolution in the empirical analysis of tax evasion and the informal economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 25-53, February.
    16. Cristina Strango, 2021. "Does Digitalisation in Public Services Reduce Tax Evasion?," Economic Research Guardian, Weissberg Publishing, vol. 11(2), pages 218-232, December.
    17. Benno Torgler & Friedrich Schneider & Christoph Schaltegger, 2010. "Local autonomy, tax morale, and the shadow economy," Public Choice, Springer, vol. 144(1), pages 293-321, July.
    18. Benno Torgler & Friedrich Schneider & Christoph Schaltegger, 2010. "Local autonomy, tax morale, and the shadow economy," Public Choice, Springer, vol. 144(1), pages 293-321, July.
    19. Lumir Abdixhiku, Geoff Pugh, Iraj Hashi, 2018. "Business Tax Evasion in Transition Economies: A Cross-Country Panel Investigation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 15(1), pages 11-36, June.
    20. Christian Traxler, 2009. "Voting over taxes: the case of tax evasion," Public Choice, Springer, vol. 140(1), pages 43-58, July.

    More about this item

    Keywords

    Tax evasion; Digitalisation; EU27; Panel estimations;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • C89 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wei:journl:v:11:y:2021:i:2:p:221-235. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mihai Mutascu (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.