Can Tax Reform Work in an Economy Where Tax Avoidance and Evasion are Endemic?
Author InfoEdimon Ginting Abstract In this model firms seek to minimise their tax liabilities by purchasing rent-seeking services from a provider who also sells legitimate public services to the government. The provider enjoys economies of scope – its two outputs are produced jointly. Tax reform in this setting can increase both government revenue and the efficiency of the economy because a type of Laffer curve is operational and because such reform can lead to resources being moved out of rent-seeking activity. Later this partial equilibrium framework will be embedded within a conventional general equilibrium model. Download InfoTo download: If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
