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The Effect of the Cash Receipt System on Preventing Tax Evasion from Consumers' Perspective (in Korean)

Author

Listed:
  • Eunbi Ko

    (Department of Economics, University of Seoul)

  • Heonjae Song

    (Department of Economics, University of Seoul)

Abstract

This paper studies the effect of the cash receipt system on preventing tax evasion by analyzing consumers?? behavior about the income tax deduction for cash receipt. The estimation results show that consumers ask self-employed to issue the cash receipt by 340??1,160 thousand KRW in order to reduce their effective income tax rate by 0.1%p which is defined by the ratio of labor income tax to yearly wage. This result can be interpreted as a supportive evidence that the cash receipt system is effectively working in preventing tax evasion of the self-employed.

Suggested Citation

  • Eunbi Ko & Heonjae Song, 2018. "The Effect of the Cash Receipt System on Preventing Tax Evasion from Consumers' Perspective (in Korean)," Economic Analysis (Quarterly), Economic Research Institute, Bank of Korea, vol. 24(1), pages 99-126, March.
    • Handle: RePEc:bok:journl:v:24:y:2018:i:1:p:99-126
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    More about this item

    Keywords

    Cash receipt system; Tax evasion; Legalization of taxable income; Credit card income deduction; Labor income tax;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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