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Enhancing Tax Compliance in the Dominican Republic Through Risk-based VAT Invoice Management

Author

Listed:
  • Cristian Alonso
  • Ledys Feliz
  • Patricia Gil
  • Miguel Pecho

Abstract

Invoices document economic transactions and are thus critical to assess tax liabilities. We study a reform in the Dominican Republic that aimed to integrate invoice management into a broader, more comprehensive, risk-based compliance strategy. By rationing authorized invoices based on an extra scrutiny of each taxpayer’s compliance history, the reform led to significant and persistent improvements on filing, payment, and information reporting obligations and a modest increase in reported tax liabilities. Our study shows that deterrence effects over compliance behaviors are strengthened when the tax administration makes explicit and active use of taxpayers’ information, no matter if the invoicing framework is paper-based or electronic.

Suggested Citation

  • Cristian Alonso & Ledys Feliz & Patricia Gil & Miguel Pecho, 2021. "Enhancing Tax Compliance in the Dominican Republic Through Risk-based VAT Invoice Management," IMF Working Papers 2021/231, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/231
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    Cited by:

    1. Marwin Heinemann & Wojciech Stiller, 2023. "Digitalization and Cross-Border Tax Fraud: Evidence from E-Invoicing in Italy," CESifo Working Paper Series 10227, CESifo.

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