Publication: Revealing Tax Evasion: Experimental Evidence from a Representative Survey of Indonesian Firms
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2024-07-24
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2024-07-24
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This paper examines the pervasiveness of tax evasion among firms in Indonesia and the characteristics associated with higher levels of noncompliance. Tax evasion is estimated through a randomized, double-list experiment embedded in a nationally representative survey of 2,955 registered firms. This revealed whether firms pay all the taxes they owe without them having to disclose this directly. Across both list experiments, around a quarter of the firms indirectly reveal that they have evaded taxes. Firms that do not export, face intense competition from informal firms, and believe tax administration is a major obstacle to their business are the most likely to evade taxes. These findings help to inform the enforcement activities of tax authorities in middle-income countries, which face substantial challenges in estimating levels of tax evasion and identifying noncompliant taxpayers.
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“Hoy, Christopher; Jolevski, Filip; Obeyesekere, Anthony. 2024. Revealing Tax Evasion: Experimental Evidence from a Representative Survey of Indonesian Firms. Policy Research Working Paper; 10857. © World Bank. http://hdl.handle.net/10986/41944 License: CC BY 3.0 IGO.”
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