Tax Compliance and Firms’ StrategicInterdependence
We focus on a relatively neglected area of the tax-compliance literature ineconomics, the behaviour of firms. We examine the impact of alternativeaudit rules on receipts from a tax on profits in the context of strategicinter-dependence of firms. In the market firms may compete in terms ofeither output or price. The enforcement policy can have an effect onfirms' behaviour in two dimensions - their market decisions as well astheir compliance behaviour. An appropriate design of the enforcementpolicy can thus have a "double dividend" by manipulating firms in bothdimensions.
|Date of creation:||Feb 2006|
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References listed on IDEAS
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- Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, June.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
- Vives, Xavier, 2004. "Complementarities and Games: New Developments," CEPR Discussion Papers 4742, C.E.P.R. Discussion Papers.
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