Tax credits response to tax enforcement: evidence from a quasi-experiment in Chile
- Autores: Claudio A. Agostini, Claudia Martínez Alvear
- Localización: XX Encuentro Economía Pública: estado del bienestar. Sostenibilidad y reformas, 2013, ISBN 978-84-695-6945-0, pág. 4
- Idioma: inglés
- Enlaces
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Resumen
Diesel in Chile receives a different tax treatment depending on its use.
I f diesel is used in industrial activities the diesel tax paid can be used as a credit against VAT and if diesel is used in freight or public transportation (basically trucks and buses) a fraction of gasoline taxes paid can be used as a credit against VAT. As a result of this different tax treatment firms have incentives to use �tax exempted� diesel in activities requiring �non tax exempted� diesel.
This price wedge generates and opportunity for tax evasion. In this paper we analyze the impact of a tax enforcement program implemented by the Chilean IRS, where letters requiring information about diesel tax credi t s were sent to around 200 firms in 2003. Using different empirical strategies to consider the non - randomness of the selection of firms, we find that firms receiving a letter decreased their diesel tax credits by 16 %
