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Does Digitalisation in Public Services Reduce Tax Evasion?

Author

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  • 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
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    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. 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.
    3. 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.
    4. 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.
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    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.

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    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

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