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Bureaucracy and Corruption Taxation Proof

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  • Jellal, Mohamed

Abstract

Using the Principal-Agent-Supervisor paradigm, we examine in this paper how a tax collection agency changes optimal schemes in order to lessen the occurrence of bribery between the tax collector and the taxpayer. The Principal, who maximizes the expected net fiscal revenue, reacts by decreasing tax rates when the supervisor is likely to engage in corrupt transaction with taxpayer. The combat against collusion may explain the greater reliance on indirect taxes than on direct taxes both in developed and developing countries

Suggested Citation

  • Jellal, Mohamed, 2009. "Bureaucracy and Corruption Taxation Proof," MPRA Paper 17177, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17177
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    File URL: https://mpra.ub.uni-muenchen.de/17177/1/MPRA_paper_17177.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Principal Agent Supervisor; Bureaucracy ; Collusion; Tax evasion;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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