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Can e-filing reduce tax compliance costs in developing countries ?


  • Yilmaz, Fatih
  • Coolidge, Jacqueline


The purpose of this study is to investigate the association between electronic filing (e-filing) and the total tax compliance costs incurred by small and medium size businesses in developing countries, based on survey data from South Africa, Ukraine, and Nepal. A priori, most observers expect that use of e-filing should reduce tax compliance costs, but this analysis suggests that the assumption should be more nuanced. In particular, policies that require business taxpayers to submit paper-based information in addition to their e-filing roughly negate savings that would otherwise be realized. In addition, adoption of e-filing requires an up-front investment by the business not only in capital assets, but also in the time, effort, and resources required to learn how to use e-filing properly and efficiently. Small businesses, in particular, are likely to face a steep"learning curve"and should probably not be forced to use e-filing before the majority of them have access to computers (with reliable electricity service) and have had a chance to become familiar with both computer use and the Internet.

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  • Yilmaz, Fatih & Coolidge, Jacqueline, 2013. "Can e-filing reduce tax compliance costs in developing countries ?," Policy Research Working Paper Series 6647, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6647

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    Taxation&Subsidies; Information Security&Privacy; Debt Markets; Information and Records Management; Emerging Markets;

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