PUBLICATIONS
The Equity of Tax Systems in Low and Middle Income Countries, with Lucie Gadenne & Anders Jensen.
Journal of Economic Perspectives, February 2024
Informality, Consumption Taxes and Redistribution with Lucie Gadenne & Anders Jensen.
Review of Economic Studies, September 2023. NBER Working Paper 27429 , WB Working Paper 9267, Codes. Coverage: VoxDev, World Bank
Corporate Taxation Under Weak Enforcement, with Mauricio Soto.
American Economic Journal: Economic Policy, November 2021. WB Working Paper 8524, Coverage: Estado de la Nacion.
How Debit Cards Enable the Poor to Save More, with Paul Gertler, Sean Higgins & Enrique Seira,
Journal of Finance, March 2021. NBER Working Paper No 23252, Coverage: VoxDev.
Size-Dependent Tax Enforcement and Compliance: Global Evidence and Aggregate Implications, with Roberto Fattal Jaef & Anders Jensen, Journal of Development Economics, September 2019. WB Working Paper 8363.
Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion, with Paul Gertler, Sean Higgins & Enrique Seira, American Economic Association Papers and Proceedings, May 2018
Journal of Economic Perspectives, February 2024
Informality, Consumption Taxes and Redistribution with Lucie Gadenne & Anders Jensen.
Review of Economic Studies, September 2023. NBER Working Paper 27429 , WB Working Paper 9267, Codes. Coverage: VoxDev, World Bank
Corporate Taxation Under Weak Enforcement, with Mauricio Soto.
American Economic Journal: Economic Policy, November 2021. WB Working Paper 8524, Coverage: Estado de la Nacion.
How Debit Cards Enable the Poor to Save More, with Paul Gertler, Sean Higgins & Enrique Seira,
Journal of Finance, March 2021. NBER Working Paper No 23252, Coverage: VoxDev.
Size-Dependent Tax Enforcement and Compliance: Global Evidence and Aggregate Implications, with Roberto Fattal Jaef & Anders Jensen, Journal of Development Economics, September 2019. WB Working Paper 8363.
Digital Financial Services Go a Long Way: Transaction Costs and Financial Inclusion, with Paul Gertler, Sean Higgins & Enrique Seira, American Economic Association Papers and Proceedings, May 2018
WORKING PAPERS
The Impact of COVID-19 on Formal Firms: Lessons from Administrative Tax Data with Anne Brockmeyer, Pablo Garriga & Camille Semelet Accepted, Journal of Development Economics, January 2025
Earlier Working Paper written during the pandemic in 2020 Replication Codes. Coverage: EconObservatory | UCL Stone Centre
Capital Taxation, Development, and Globalization: Evidence from a Macro-Historical Database with Matt Fischer-Post, Anders Jensen & Gabriel Zucman. October 2024 [Submitted]
[Note: This paper previously circulated under the title "Globalization and Factor Income Taxation]
Online Appendix, Data & Codes, NBER Working Paper 29819, WB Working Paper 9973. Coverage: VoxEU Blog, World Bank Blog
Effective Tax Rates, Firm Size, and the Global Minimum Tax with Anne Brockmeyer, Roel Dom and Camille Semelet. October 2024 [Submitted]
WB Working Paper 10312, EUTAX Observatory WP 14. Coverage: World Bank Blog
The Impact of COVID-19 on Formal Firms: Lessons from Administrative Tax Data with Anne Brockmeyer, Pablo Garriga & Camille Semelet Accepted, Journal of Development Economics, January 2025
Earlier Working Paper written during the pandemic in 2020 Replication Codes. Coverage: EconObservatory | UCL Stone Centre
Capital Taxation, Development, and Globalization: Evidence from a Macro-Historical Database with Matt Fischer-Post, Anders Jensen & Gabriel Zucman. October 2024 [Submitted]
[Note: This paper previously circulated under the title "Globalization and Factor Income Taxation]
Online Appendix, Data & Codes, NBER Working Paper 29819, WB Working Paper 9973. Coverage: VoxEU Blog, World Bank Blog
Effective Tax Rates, Firm Size, and the Global Minimum Tax with Anne Brockmeyer, Roel Dom and Camille Semelet. October 2024 [Submitted]
WB Working Paper 10312, EUTAX Observatory WP 14. Coverage: World Bank Blog
IN PROGRESS
Algorithms and Bureaucrats: Evidence from Tax Audit Selection in Senegal, with Anne Brockmeyer, Alipio Ferreira & Bassirou Sarr, AEA RCT REGISTRY
Developing economies are characterized by limited compliance with government regulations, such as taxation. Resources for enforcement are scarce and audit cases are often selected by bureaucrats in a discretionary manner. We study whether an algorithm drawing on newly digitized data can help improve audit selection. Leveraging a nationwide field experiment in Senegal, we compare audits selected by tax inspectors to audits selected by a risk-scoring algorithm. We find that inspector-selected audits are more likely to be conducted, are similarly likely to detect evasion, and detect higher amounts of evasion. Inspectors prioritize auditing larger firms despite their lower evasion rate, as the observed return on audits is increasing in firm size.
Luxurious Tax Cuts: Equity vs Efficiency of Indirect Taxation in India, with Davi Behring and Pulak Ghosh
Should countries with constrained income taxation use differentiated commodity taxes for redistribution? This paper quantifies the equity-efficiency trade-off of indirect taxation in India. We estimate behavioral responses to the Value-Added-Tax following a sudden rate cut from 28% to 18% for many products, using granular administrative data and a difference in differences design. We find that the 10p.p. tax cut led to a 5p.p. rise in reported sales; the tax reduction was fully passed-through to consumers via lower prices; and the sales of substitute products did not change, suggesting limited tax evasion via re-labelling. These results challenge the common view on differentiated com- modity taxes: taxing luxury goods at higher rates might achieve distributional goals at moderate efficiency costs, and complement suboptimal income taxation.
The three body problem: Ecuador’s tax on tax haven shareholdership, with Alex Bajaña and Jakob Brounstein
Can a country reduce its exposure to tax havens, and what are the consequences? We analyze the effects of the 2015 corporate tax surcharge applied by Ecuador to all its domestic firms with shareholders in tax havens. This reform was made possible by the establishment of a mandatory ownership registry in 2012. We compare the behavior of firms with tax haven shareholders at baseline versus other internationally owned firms in a difference-in-differences design. Exposed firms reduce their shareholder linkages to havens by 12.5pp on average, with 11 percent of exposed firms ceasing observable ties to tax havens entirely. We document a nearly complete substitution (10pp) towards foreign non-haven ownership, hinting at a layering response. However, we also document a modest rise in profits and tax liability (∼10%), which suggests the presence of substantial frictions in multinational profit shifting.
Technology, tax, and domestic trade: Evidence from Rwanda’s electronic invoicing expansion, with Lucas Zavala, Kieran Byrne, Florence Kondylis and John Karangwa
Digital technology facilitates trade but also increases the visibility of firms’ activity to the government. This paper examines the trade-off between technology adoption and regulatory exposure in the context of electronic billing machines (EBM) and business taxation in Rwanda. In December 2020, the government mandated that large firms’ tax deductions for purchases be validated by corresponding EBM receipts. Using a shift-share design, we find that receipt demand from large clients predicts EBM adoption and growth of small suppliers. We combine a model of invoicing in supply chains and a nationwide survey of firms to shed light on the underlying mechanisms.
Towards a Cashless Economy? Evidence from the Elasticity of Cash Deposits of Mexican Firms, with Sean Higgins & Anders Jensen. Oct 2020. (Slides)
Algorithms and Bureaucrats: Evidence from Tax Audit Selection in Senegal, with Anne Brockmeyer, Alipio Ferreira & Bassirou Sarr, AEA RCT REGISTRY
Developing economies are characterized by limited compliance with government regulations, such as taxation. Resources for enforcement are scarce and audit cases are often selected by bureaucrats in a discretionary manner. We study whether an algorithm drawing on newly digitized data can help improve audit selection. Leveraging a nationwide field experiment in Senegal, we compare audits selected by tax inspectors to audits selected by a risk-scoring algorithm. We find that inspector-selected audits are more likely to be conducted, are similarly likely to detect evasion, and detect higher amounts of evasion. Inspectors prioritize auditing larger firms despite their lower evasion rate, as the observed return on audits is increasing in firm size.
Luxurious Tax Cuts: Equity vs Efficiency of Indirect Taxation in India, with Davi Behring and Pulak Ghosh
Should countries with constrained income taxation use differentiated commodity taxes for redistribution? This paper quantifies the equity-efficiency trade-off of indirect taxation in India. We estimate behavioral responses to the Value-Added-Tax following a sudden rate cut from 28% to 18% for many products, using granular administrative data and a difference in differences design. We find that the 10p.p. tax cut led to a 5p.p. rise in reported sales; the tax reduction was fully passed-through to consumers via lower prices; and the sales of substitute products did not change, suggesting limited tax evasion via re-labelling. These results challenge the common view on differentiated com- modity taxes: taxing luxury goods at higher rates might achieve distributional goals at moderate efficiency costs, and complement suboptimal income taxation.
The three body problem: Ecuador’s tax on tax haven shareholdership, with Alex Bajaña and Jakob Brounstein
Can a country reduce its exposure to tax havens, and what are the consequences? We analyze the effects of the 2015 corporate tax surcharge applied by Ecuador to all its domestic firms with shareholders in tax havens. This reform was made possible by the establishment of a mandatory ownership registry in 2012. We compare the behavior of firms with tax haven shareholders at baseline versus other internationally owned firms in a difference-in-differences design. Exposed firms reduce their shareholder linkages to havens by 12.5pp on average, with 11 percent of exposed firms ceasing observable ties to tax havens entirely. We document a nearly complete substitution (10pp) towards foreign non-haven ownership, hinting at a layering response. However, we also document a modest rise in profits and tax liability (∼10%), which suggests the presence of substantial frictions in multinational profit shifting.
Technology, tax, and domestic trade: Evidence from Rwanda’s electronic invoicing expansion, with Lucas Zavala, Kieran Byrne, Florence Kondylis and John Karangwa
Digital technology facilitates trade but also increases the visibility of firms’ activity to the government. This paper examines the trade-off between technology adoption and regulatory exposure in the context of electronic billing machines (EBM) and business taxation in Rwanda. In December 2020, the government mandated that large firms’ tax deductions for purchases be validated by corresponding EBM receipts. Using a shift-share design, we find that receipt demand from large clients predicts EBM adoption and growth of small suppliers. We combine a model of invoicing in supply chains and a nationwide survey of firms to shed light on the underlying mechanisms.
Towards a Cashless Economy? Evidence from the Elasticity of Cash Deposits of Mexican Firms, with Sean Higgins & Anders Jensen. Oct 2020. (Slides)