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Keeping It Off The Books: An Empirical Investigation Into the Characteristics of Firms That Engage In Tax Non-Compliance


  • Lindsay M. Tedds


We investigate firm tax noncompliance using a survey of firms from around the world. Overall, we find that small firms are less and large firms are more compliant. Foreign owned firms, exporters and firms that have audited finance statements are also more compliant, as found by others, but, quite surprisingly, government ownership is insignificant. Not surprisingly, organized crime, high taxes, and government corruption all result in lower compliance. Finally, we find that firms around the world engage in tax noncompliance but, holding all else constant, compliance in highest in OECD countries and the lowest in Latin American, African & Middle Eastern countries.

Suggested Citation

  • Lindsay M. Tedds, 2005. "Keeping It Off The Books: An Empirical Investigation Into the Characteristics of Firms That Engage In Tax Non-Compliance," Department of Economics Working Papers 2005-01, McMaster University.
  • Handle: RePEc:mcm:deptwp:2005-01

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    Cited by:

    1. Laszlo Goerke, 2012. "The Optimal Structure of Commodity Taxation in a Monopoly with Tax Avoidance or Evasion," Public Finance Review, , vol. 40(4), pages 519-536, July.

    More about this item


    Underground Economy; Tax Noncompliance; Firm Characteristics; Interval Regression;

    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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