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Inter-municipal cooperation and tax enforcement capabilities

Author

Listed:
  • Naruki Notsu

    (Osaka School of International Public Policy, The University of Osaka)

  • Haruaki Hirota

    (Faculty of Economics, Musashi University)

  • Nobuo Akai

    (Osaka School of International Public Policy, The University of Osaka)

Abstract

This study examines the effects of enhancing the tax enforcement of administration on the tax gap, focusing on inter-municipal cooperation (IMC). IMC refers to collaborative tax collection efforts among multiple municipalities and promotes the aggregation of tax collection resources and expertise, improving tax enforcement. Using the time variation in IMC creation across municipalities, we show that IMC substantially improves the tax gap measurement by reinforcing tax enforcement in local governments. Our findings suggest that enhanced administrative capability in tax enforcement can be an effective tool against noncompliance in ways other than facilitating voluntary compliance.

Suggested Citation

  • Naruki Notsu & Haruaki Hirota & Nobuo Akai, 2024. "Inter-municipal cooperation and tax enforcement capabilities," OSIPP Discussion Paper 24E004Rev., Osaka School of International Public Policy, Osaka University, revised May 2025.
    • Handle: RePEc:osp:wpaper:24e004rev.
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    File URL: https://www.osipp.osaka-u.ac.jp/archives/DP/2024/DP2024E004Rev.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Inter-municipal cooperation; Tax enforcement; Tax compliance;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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