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Motivation and collusion among agents in the evasion of indirect taxes: an experimental approach

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  • Hj2240 Revenue. Taxation
  • Economics
  • Psychology


0RWLYDWLRQV�DQG�FROOXVLRQ�DPRQJ�DJHQWV�LQ�WKH�HYDVLRQ�RI�LQGLUHFW�WD[HV� DQ�H[SHULPHQWDO�DSSURDFK ’UDIW�-DQXDU\�µ�� By Luigi Mittone Department of Economics and Computable and Experimental Economics Laboratory (CEEL) University of Trento [email protected] * In writing this paper I have benefited from the valuable assistance of Marco Tecilla, and Dominique Cappelletti from CEEL. Marco wrote the software used to run the experiments and participated in all the different phases of the project and Dominique helped me with the statistical analysis. I also wish to thank Paul Webley, who helped me with ideas and constructive criticisms and by running one of the experiments at Exeter. As usual, all responsibility for mistakes or omissions is mine alone. 2 �� ,QWURGXFWLRQ Since the seminal paper by Allingham and Sandmo (1972) the theoretical microeconomic approach to tax evasion has almost exclusively treated only personal income tax and, more recently and with fewer examples, profit taxes (e.g. Kreutzer and Lee, 1986; Lee, 1997, Yaniv, 1995, Panteghini, 2000). The evasion of indirect taxes, and more precisely of value added tax (VAT), is an almost unexplored topic for microeconomic theory, and the few papers that have explicitly treated it from a theoretical perspective (e.g. Marrelli, 1984) have done so within the production theory framework, i.e. once again as part of a problem of profit maximization. None of these works analyze those interesting aspects of VAT evasion tied to the highly social nature of this kind of tax evasion. The social-psychological dimension of tax evasion is not a new topic, and it has been widely analyzed from both the theoretical (e.g. Gordon, 1989) and the empirical-experimental perspectives (e.g. Webley, P.Robben, H., Elffers, H. and Hessing, D., 1991; Bosco, Mittone, 1997), but once again this literature refers only to income tax. The most distinctive characteristic of the evasion of VAT

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