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Measuring the Performance of Chile's Tax Administration

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  • Pablo Serra

Abstract

This purpose of this article is to develop an effectiveness indicator (EI) for Chile’s tax administration. We assume that the goal of the Chilean Internal Revenue Service (SII) is to maximize tax revenue while minimizing compliance costs. Sample taxpayer surveys and statistical information both show that SII service standards - a proxy for compliance costs - improved in the 1990s. Compliance rates, which are used as EI by the SII itself, also improved significantly. Regression analysis, however, suggests that this improvement can largely be explained by the strong economic growth experienced during the period. We argue that an appropriate EI for the goal of revenue maximization is the actual compliance rate divided by maximum achievable compliance given the values of variables that are beyond SII control.

Suggested Citation

  • Pablo Serra, 2000. "Measuring the Performance of Chile's Tax Administration," Documentos de Trabajo 77, Centro de Economía Aplicada, Universidad de Chile.
    • Handle: RePEc:edj:ceauch:77
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    2. Gobena, Lemessa Bayissa & Van Dijke, Marius, 2017. "Fear and caring: Procedural justice, trust, and collective identification as antecedents of voluntary tax compliance," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 1-16.
    3. Pablo Serra, 2000. "Fundamentos para una Reforma Tributaria en Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 37(111), pages 299-322.
    4. Taliercio, Robert Jr., 2004. "Designing performance: the semi-autonomous revenue authority model in Africa and Latin America," Policy Research Working Paper Series 3423, The World Bank.
    5. Fjeldstad, Odd-Helge, 2013. "Taxation and Development : A Review of Donor Support to Strengthen Tax Systems in Developing Countries," WIDER Working Paper Series 010, World Institute for Development Economic Research (UNU-WIDER).

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