IDEAS home Printed from https://ideas.repec.org/p/bge/wpaper/1454.html
   My bibliography  Save this paper

E-invoicing, Tax Audits and VAT Compliance

Author

Listed:
  • Christos Kotsogiannis
  • Luca Salvadori
  • John Karangwa
  • Innocente Murasi

Abstract

Difficult to find another policy shift that has promised as much for tax compliance in developing countries as digitalization. Yet the evidence on its impact is scant. Using the universe of tax filings in Rwanda over the period 2012-2019, this paper investigates the extent to which digitalization (in the form of e-invoicing) has impacted on VAT compliance and, in particular, the effectiveness of tax audits. The evidence suggests that while e-invoicing adoption per se has increased firms’ net VAT payments, this impact is quantitatively limited, as firms seem to re-adjust their expenses so to keep VAT payments low. Interestingly, e-invoicing had a sizable compliance impact on net VAT liabilities re- ported by audited firms, with this impact being attributed to tax audits becoming more efficient, rather than to VAT registered firms becoming more cautious following their participation in the e-invoicing mechanism.

Suggested Citation

  • Christos Kotsogiannis & Luca Salvadori & John Karangwa & Innocente Murasi, 2024. "E-invoicing, Tax Audits and VAT Compliance," Working Papers 1454, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1454
    as

    Download full text from publisher

    File URL: https://bse.eu/sites/default/files/working_paper_pdfs/1454.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. King, Gary & Nielsen, Richard, 2019. "Why Propensity Scores Should Not Be Used for Matching," Political Analysis, Cambridge University Press, vol. 27(4), pages 435-454, October.
    2. Iacus, Stefano & King, Gary & Porro, Giuseppe, 2009. "cem: Software for Coarsened Exact Matching," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 30(i09).
    3. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 524-546, December.
    4. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2011. "Multivariate Matching Methods That Are Monotonic Imbalance Bounding," Journal of the American Statistical Association, American Statistical Association, vol. 106(493), pages 345-361.
    5. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2012. "Causal Inference without Balance Checking: Coarsened Exact Matching," Political Analysis, Cambridge University Press, vol. 20(1), pages 1-24, January.
    6. Imbens,Guido W. & Rubin,Donald B., 2015. "Causal Inference for Statistics, Social, and Biomedical Sciences," Cambridge Books, Cambridge University Press, number 9780521885881, October.
    7. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2019. "A Theory of Statistical Inference for Matching Methods in Causal Research," Political Analysis, Cambridge University Press, vol. 27(1), pages 46-68, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuri Ostrovsky & Garnett Picot, 2021. "Innovation in immigrant-owned firms," Small Business Economics, Springer, vol. 57(4), pages 1857-1874, December.
    2. Zhang, Chi & Managi, Shunsuke, 2020. "Functional social support and maternal stress: A study on the 2017 paid parental leave reform in Japan," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 153-172.
    3. Leduc, Elisabeth & Tojerow, Ilan, 2020. "Subsidizing Domestic Services as a Tool to Fight Unemployment: Effectiveness and Hidden Costs," IZA Discussion Papers 13544, Institute of Labor Economics (IZA).
    4. Philipp vom Berge & Achim Schmillen, 2023. "Effects of mass layoffs on local employment—evidence from geo-referenced data," Journal of International Economic Law, Oxford University Press, vol. 23(3), pages 509-539.
    5. Sara Pavone & Elena Ragazzi & Lisa Sella, 2015. "Sostenere le imprese agro-industriali in Piemonte: un?analisi controfattuale," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(3 Suppl.), pages 129-143.
    6. Davidson Heath & Giorgo Sertsios, 2022. "Profitability and Financial Leverage: Evidence from a Quasi-Natural Experiment," Management Science, INFORMS, vol. 68(11), pages 8386-8410, November.
    7. Khanna, Rajat, 2021. "Aftermath of a tragedy: A star's death and coauthors’ subsequent productivity," Research Policy, Elsevier, vol. 50(2).
    8. Ravi Bapna & Alok Gupta & Gautam Ray & Shweta Singh, 2023. "Single-Sourcing vs. Multisourcing: An Empirical Analysis of Large Information Technology Outsourcing Arrangements," Information Systems Research, INFORMS, vol. 34(3), pages 1109-1130, September.
    9. Gustavsson Tingvall, Patrik & Videnord, Josefin, 2017. "Regional Effects of Publicly Sponsored R&D Grants on SME Performance," Ratio Working Papers 289, The Ratio Institute.
    10. Corral, Leonardo & Henderson, Heath & Miranda, Juan José, 2016. "Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru," IDB Publications (Working Papers) 7520, Inter-American Development Bank.
    11. Daunfeldt, Sven-Olov & Halvarsson, Daniel & Gustavsson Tingvall, Patrik & McKelvie, Alexander, 2021. "Do Targeted R&D Grants Towards Potential Highgrowth Firms Increase Employment and Demand for High Human Capital Workers?," HFI Working Papers 23, Institute of Retail Economics (Handelns Forskningsinstitut).
    12. Vikas A. Aggarwal & David H. Hsu, 2014. "Entrepreneurial Exits and Innovation," Management Science, INFORMS, vol. 60(4), pages 867-887, April.
    13. Ainhoa Herrarte & Paloma Urcelay, 2022. "The Wage Penalty for Motherhood in Spain (2009-2017): The Role of the Male Partner’s Job Characteristic," Hacienda Pública Española / Review of Public Economics, IEF, vol. 241(2), pages 27-57, June.
    14. Julia Muschallik & Kerstin Pull, 2016. "Mentoring in higher education: does it enhance mentees’ research productivity?," Education Economics, Taylor & Francis Journals, vol. 24(2), pages 210-223, April.
    15. Yiwei Qian & Rodolfo M. Nayga & Michael R. Thomsen & Heather L. Rouse, 2016. "The Effect of the Fresh Fruit and Vegetable Program on Childhood Obesity," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 260-275.
    16. Ramboer, Sander & Reynaerts, Jo, 2020. "Indecent proposals: Estimating the impact of regional state aid through EU guideline compliance," Regional Science and Urban Economics, Elsevier, vol. 82(C).
    17. Khanna, Rajat, 2023. "Passing the torch of knowledge: Star death, collaborative ties, and knowledge creation," Research Policy, Elsevier, vol. 52(1).
    18. Augusto Cerqua & Guido Pellegrini, 2017. "Industrial policy evaluation in the presence of spillovers," Small Business Economics, Springer, vol. 49(3), pages 671-686, October.
    19. Markku Maula & Wouter Stam, 2020. "Enhancing Rigor in Quantitative Entrepreneurship Research," Entrepreneurship Theory and Practice, , vol. 44(6), pages 1059-1090, November.
    20. Ferrés, Daniel & Ormazabal, Gaizka & Povel, Paul & Sertsios, Giorgo, 2021. "Capital structure under collusion," Journal of Financial Intermediation, Elsevier, vol. 45(C).

    More about this item

    Keywords

    tax audit evaluation; technological change; digitalisation initiatives; tax administration; Tax evasion; tax compliance;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bge:wpaper:1454. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bruno Guallar (email available below). General contact details of provider: https://edirc.repec.org/data/bargses.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.