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Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/116306
Empirical evidence on horizontal competition in tax enforcement [WP-IEB]
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Tax auditing parameters have been largely overlooked by the literature as policy-making instruments of any relevance; however, enforcement strategies are critical elements of the tax burden. In this paper we show that, in a federal framework, tax auditin policies can serve as additional tools for regional interaction. We examine the presence of this interaction by adopting a spatial econometric approach. We employ a time-space recursive model that accounts for sluggish adjustment in auditing policies and obtain results that are congruent with standard theory, corroborating the presence of horizontal competition between regions in their tax auditing policies. We also find that once regional governments acquire legal power, the opaque competition in enforcement policies disappears apparently switching to a more transparent competition in statutory tax parameters.
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DURÁN CABRÉ, José María, ESTELLER MORÉ, Alejandro and SALVADORI, Luca. Empirical evidence on horizontal competition in tax enforcement [WP-IEB]. IEB Working Paper 2012/05. [consulted: 15 of October of 2026]. Available at: https://hdl.handle.net/2445/116306