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Misreporting in the Norwegian business cash support scheme

Author

Listed:
  • Dinara Alpysbayeva

    (Norwegian University of Life Sciences)

  • Annette Alstadsæter

    (Norwegian University of Life Sciences)

  • Wojciech Kopczuk

    (Columbia University)

  • Simen Markussen

    (Norwegian University of Life Sciences
    Ragnar Frisch Centre for Economic Research)

  • Oddbjørn Raaum

    (Norwegian University of Life Sciences
    Ragnar Frisch Centre for Economic Research)

Abstract

We analyze the reporting response to an ambitiously targeted government support scheme for Norwegian businesses at the very start of the Coronavirus crisis in 2020. Our empirical design is based on cross-checking self-reported data in the applications for support with administratively reported data used for VAT. We find strong evidence that strategic misreporting was present but conclude that its remaining quantitative extent after enforcement actions already taken by the tax authorities was relatively small. Firms tend to misreport 4% more often than expected, and the actual support paid out was 5% higher than it should have been. We discuss possible reasons for the relatively limited extent of non-compliance and more general lessons for the design of transfer programs.

Suggested Citation

  • Dinara Alpysbayeva & Annette Alstadsæter & Wojciech Kopczuk & Simen Markussen & Oddbjørn Raaum, 2024. "Misreporting in the Norwegian business cash support scheme," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(6), pages 1463-1493, December.
    • Handle: RePEc:kap:itaxpf:v:31:y:2024:i:6:d:10.1007_s10797-024-09857-6
    DOI: 10.1007/s10797-024-09857-6
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    More about this item

    Keywords

    Government support programs; Policy design; Cash transfers; Firm behavior; Misreporting; COVID-19;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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