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On the effects of repeated tax amnesties

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  • Sanchez Villalba, Miguel A.

Abstract

We examine empirically the effect of tax amnesties on long term tax collection when such amnesties are used by a government as a regular source of revenue. We use data from the Tucuman province (Argentina) to test the main hypothesis of the model, namely, that amnesties lower the government’s revenue, as they reduce the penalties and make evasion more profitable. We find, however, that amnesties do not affect the long-term revenue. The other main result is in line with the theoretical predictions: the increase in short-run revenue is temporary and only accelerates the collection of the taxes but does not increase the amount collected. Thus, we conclude that amnesties were used only to obtain a short-run surge in revenue and to avoid more fundamental tax reforms.

Suggested Citation

  • Sanchez Villalba, Miguel A., 2017. "On the effects of repeated tax amnesties," MPRA Paper 80936, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:80936
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    References listed on IDEAS

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    1. Cassone, Alberto & Marchese, Carla, 1995. "Tax Amnesties as Special Sales Offers: The Italian Experience," Public Finance = Finances publiques, , vol. 50(1), pages 51-66.
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    5. Alm, James & McKee, Michael J. & Beck, William, 1990. "Amazing Grace: Tax Amnesties and Compliance," National Tax Journal, National Tax Association, vol. 43(1), pages 23-37, March.
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    13. James Alm & William Beck, 1990. "Tax Amnesties and Tax Revenues," Public Finance Review, , vol. 18(4), pages 433-453, October.
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    More about this item

    Keywords

    tax amnesties; tax evasion;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue

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