Enhancing Tax Compliance in the Dominican Republic Through Risk-based VAT Invoice Management
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Summary:
Invoices document economic transactions and are thus critical to assess tax liabilities. We study a reform in the Dominican Republic that aimed to integrate invoice management into a broader, more comprehensive, risk-based compliance strategy. By rationing authorized invoices based on an extra scrutiny of each taxpayer’s compliance history, the reform led to significant and persistent improvements on filing, payment, and information reporting obligations and a modest increase in reported tax liabilities. Our study shows that deterrence effects over compliance behaviors are strengthened when the tax administration makes explicit and active use of taxpayers’ information, no matter if the invoicing framework is paper-based or electronic.
Series:
Working Paper No. 2021/231
Subject:
Economic sectors Income and capital gains taxes Revenue administration Small and medium enterprises Tax administration core functions Tax arrears management Taxes Value-added tax
Frequency:
regular
English
Publication Date:
September 10, 2021
ISBN/ISSN:
9781513595924/1018-5941
Stock No:
WPIEA2021231
Pages:
32
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