Loading...
The Reform and Design of Commodity Taxes in the Presence of Tax Evasion with Illustrative Evidence from India
Ray,R.
Ray,R.
Abstract
The literature on tax evasion and its implication for optimal tax theory has concentrated on income tax evasion. The issue of commodity tax evasion has received relatively little attention even though it is important in many cases, especially in developing countries. This paper proposes a theory of marginal reform of indirect taxes that recognises the presence of commodity tax evasion. Illustrative evidence from Indian data confirm the sensitivity of the Pareto improving direction of marginal tax changes to alternative a priori assumptions on commodity tax evasion. The theory of marginal reform of commodity taxes is, then, extended to propose a theory of marginal reform of audits and penalties, and several propositions are derived. The underlying theory of tax design is also extended to include income tax design and income tax evasion, and a framework is proposed to allow the simultaneous analyses of both forms of tax evasion, and study of their impact on the "optimal mix" of direct and indirect taxes.
Description
Date
1994
Journal Title
Journal ISSN
Volume Title
Publisher
CentER
Files
Loading...
108.pdf
Adobe PDF, 276.56 KB
Research Projects
Organizational Units
Journal Issue
Keywords
SDG 17 - Partnerships for the Goals
Citation
Ray, R 1994 'The Reform and Design of Commodity Taxes in the Presence of Tax Evasion with Illustrative Evidence from India' CentER Discussion Paper, vol. 1994-108, CentER.
License
info:eu-repo/semantics/restrictedAccess