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Tax Evasion, Corruption and tax Loopholes

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  • Seidel, André
  • Marjit, Sugata

Abstract

This paper addresses tax loopholes that allow firms to exploit borderline cases between legal tax avoidance and illegal tax evasion. In general, tax loopholes are detrimental for a revenue-maximizing government. This may change in the presence of corruption in the tax administration. Tax loopholes may serve as a separating mechanism that helps governments maximize revenues and curb corruption, which may explain why developing countries only gradually close loopholes in their tax codes.

Suggested Citation

  • Seidel, André & Marjit, Sugata, 2016. "Tax Evasion, Corruption and tax Loopholes," VfS Annual Conference 2016 (Augsburg): Demographic Change 145635, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145635
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    References listed on IDEAS

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    Cited by:

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    2. Dzhumashev, Ratbek & Levaggi, Rosella & Menoncin, Francesco, 2023. "Optimal tax enforcement with productive public inputs," Economic Modelling, Elsevier, vol. 126(C).
    3. Katarzyna Bilicka & André Seidel, 2020. "Profit shifting and corruption," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(5), pages 1051-1080, October.
    4. Sugata Marjit & Suryaprakash Mishra & Sandip Mitra, 2019. "Sham Litigation, Delayed Tax Payment and Evasion: The Role of Informal Credit Market," CESifo Working Paper Series 8034, CESifo.
    5. Uyar, Ali & Nimer, Khalil & Kuzey, Cemil & Shahbaz, Muhammad & Schneider, Friedrich, 2021. "Can e-government initiatives alleviate tax evasion? The moderation effect of ICT," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    6. Lumir Abdixhiku, Geoff Pugh, Iraj Hashi, 2018. "Business Tax Evasion in Transition Economies: A Cross-Country Panel Investigation," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 15(1), pages 11-36, June.
    7. Gregory T. Papanikos, 2024. "Variations of Self-Employed in Eurozone Countries: The Role of Corruption and Wage Rate Growth," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 10(1), pages 9-18, January.

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    More about this item

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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