IDEAS home Printed from https://ideas.repec.org/p/osp/wpaper/24e004.html
   My bibliography  Save this paper

Inter-municipal cooperation and tax enforcement capabilities

Author

Listed:
  • Naruki Notsu

    (Osaka School of International Public Policy, Osaka University)

  • Haruaki Hirota

    (Faculty of Economics, Musashi University)

  • Nobuo Akai

    (Osaka School of International Public Policy, Osaka University)

Abstract

This study examines the effects of enhancing the tax enforcement of administration on the tax gap, focusing on inter-municipal cooperation (IMC). IMC refers to collaborative tax collection efforts among multiple municipalities and promotes the aggregation of tax collection resources and expertise, improving tax enforcement. Using the time variation in IMC creation across municipalities, we show that IMC substantially improves the tax gap measurement by reinforcing tax enforcement in local governments. The effects also appear to be driven at both the inter-municipal organization and municipal official levels. Our findings suggest that enhanced administrative capability in tax enforcement can be an effective tool against noncompliance in ways other than facilitating voluntary compliance.

Suggested Citation

  • Naruki Notsu & Haruaki Hirota & Nobuo Akai, 2024. "Inter-municipal cooperation and tax enforcement capabilities," OSIPP Discussion Paper 24E004, Osaka School of International Public Policy, Osaka University.
    • Handle: RePEc:osp:wpaper:24e004
    as

    Download full text from publisher

    File URL: https://www.osipp.osaka-u.ac.jp/archives/DP/2024/DP2024E004.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jan-Emmanuel De Neve & Clément Imbert & Johannes Spinnewijn & Teodora Tsankova & Maarten Luts, 2021. "How to Improve Tax Compliance? Evidence from Population-Wide Experiments in Belgium," Journal of Political Economy, University of Chicago Press, vol. 129(5), pages 1425-1463.
    2. James Alm, 2019. "What Motivates Tax Compliance?," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 353-388, April.
    3. Joel Slemrod, 2019. "Tax Compliance and Enforcement," Journal of Economic Literature, American Economic Association, vol. 57(4), pages 904-954, December.
    4. Bellon, Matthieu & Dabla-Norris, Era & Khalid, Salma & Lima, Frederico, 2022. "Digitalization to improve tax compliance: Evidence from VAT e-Invoicing in Peru," Journal of Public Economics, Elsevier, vol. 210(C).
    5. M. Chatib Basri & Mayara Felix & Rema Hanna & Benjamin A. Olken, 2021. "Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia," American Economic Review, American Economic Association, vol. 111(12), pages 3827-3871, December.
    6. Jorge De La Roca & Diego Puga, 2017. "Learning by Working in Big Cities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(1), pages 106-142.
    7. Marie-Laure Breuille & Pascale Duran-Vigneron & Anne-Laure Samson, 2018. "Inter-municipal cooperation and local taxation," Post-Print hal-02943321, HAL.
    8. Breuillé, Marie-Laure & Duran-Vigneron, Pascale & Samson, Anne-Laure, 2018. "Inter-municipal cooperation and local taxation," Journal of Urban Economics, Elsevier, vol. 107(C), pages 47-64.
    9. Garriga, Pablo & Tortarolo, Dario, 2024. "Firms as tax collectors," Journal of Public Economics, Elsevier, vol. 233(C).
    10. Maarten A. Allers & J.A. de Greef, 2018. "Intermunicipal cooperation, public spending and service levels," Local Government Studies, Taylor & Francis Journals, vol. 44(1), pages 127-150, January.
    11. Notsu, Naruki, 2024. "Inter-municipal cooperation cloud and tax administrative costs," Regional Science and Urban Economics, Elsevier, vol. 105(C).
    12. Jia, Junxue & Ding, Siying & Liu, Yongzheng, 2020. "Decentralization, incentives, and local tax enforcement," Journal of Urban Economics, Elsevier, vol. 115(C).
    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. Marco Di Cataldo & Licia Ferranna & Margherita Gerolimetto & Stefano Magrini, 2023. "Splitting Up or Dancing Together? Local Institutional Structure and the Performance of Urban Areas," Economic Geography, Taylor & Francis Journals, vol. 99(1), pages 81-110, January.
    2. C. Yiwei Zhang & Jeffrey Hemmeter & Judd B. Kessler & Robert D. Metcalfe & Robert Weathers, 2023. "Nudging Timely Wage Reporting: Field Experimental Evidence from the U.S. Supplemental Security Income Program," Management Science, INFORMS, vol. 69(3), pages 1341-1353, March.
    3. James Alm & Lilith Burgstaller & Arrita Domi & Amanda März & Matthias Kasper, 2023. "Nudges, Boosts, and Sludge: Using New Behavioral Approaches to Improve Tax Compliance," Economies, MDPI, vol. 11(9), pages 1-22, September.
    4. Castro, Juan Francisco & Velásquez, Daniel & Beltrán, Arlette & Yamada, Gustavo, 2020. "Spillovers and Long-Run Effects of Messages on Tax Compliance: Experimental Evidence from Peru," IZA Discussion Papers 13974, Institute of Labor Economics (IZA).
    5. Clémence Tricaud, 2019. "Better alone? Evidence on the costs of intermunicipal cooperation," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2019-12-ccr, Condorcet Center for political Economy.
    6. repec:hal:journl:hal-03380333 is not listed on IDEAS
    7. Antinyan, Armenak & Asatryan, Zareh, 2019. "Nudging for tax compliance: A meta-analysis," ZEW Discussion Papers 19-055, ZEW - Leibniz Centre for European Economic Research.
    8. Yogama, Eko Arief & Gray, Daniel J. & Rablen, Matthew D., 2024. "Nudging for prompt tax penalty payment: Evidence from a field experiment in Indonesia," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 548-579.
    9. Sonia Paty & Morgan Ubeda, 2021. "Inter-municipal cooperation and the provision of local public goods," Working Papers 2121, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    10. von Haldenwang, Christian, 2020. "Digitalising the fiscal contract: An interdisciplinary framework for empirical inquiry," IDOS Discussion Papers 20/2020, German Institute of Development and Sustainability (IDOS).
    11. Castro, Juan Francisco & Velásquez, Daniel & Beltrán, Arlette & Yamada, Gustavo, 2022. "The direct and indirect effects of messages on tax compliance: Experimental evidence from Peru," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 483-518.
    12. Arun Advani, 2022. "Who does and doesn't pay taxes?," Fiscal Studies, John Wiley & Sons, vol. 43(1), pages 5-22, March.
    13. Dossè Mawussi Djahini‐Afawoubo, 2024. "Understanding tax payment behaviour in the West African Economic and Monetary Union: The role of perceived detection capacity and honesty," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 795-823, March.
    14. James Alm, 2024. "Tax Compliance, Technology, Trust, and Inequality in a Post-Pandemic World," Working Papers 2404, Tulane University, Department of Economics.
    15. Sanjit Dhami & Narges Hajimoladarvish, 2020. "Mental Accounting, Loss Aversion, and Tax Evasion: Theory and Evidence," CESifo Working Paper Series 8606, CESifo.
    16. Miloš Fišar & Tommaso Reggiani & Fabio Sabatini & Jiří Špalek, 2022. "Media negativity bias and tax compliance: experimental evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1160-1212, October.
    17. Antinyan, Armenak & Asatryan, Zareh & Dai, Zhixin & Wang, Kezhi, 2021. "Does the frequency of reminders matter for their effectiveness? A randomized controlled trial," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 752-764.
    18. James Alm & Antoine Malézieux, 2021. "40 years of tax evasion games: a meta-analysis," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 699-750, September.
    19. Geschwind, Stephan & Roesel, Felix, 2022. "Taxation under direct democracy," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 536-554.
    20. Sylvain Chassang & Lucia Del Carpio & Samuel Kapon, 2022. "Using Divide and Conquer to Improve Tax Collection: Theory and Laboratory Evidence," Working Papers 299, Princeton University, Department of Economics, Center for Economic Policy Studies..
    21. Lancee, Bora & Rossel, Lucia & Kasper, Matthias, 2023. "When the agency wants too much: Experimental evidence on unfair audits and tax compliance," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 406-442.

    More about this item

    Keywords

    Inter-municipal cooperation; Tax enforcement; Tax compliance;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

    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:osp:wpaper:24e004. 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: Akiko Murashita (email available below). General contact details of provider: https://edirc.repec.org/data/iposujp.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.