Digitalization to Improve Tax Compliance: Evidence from VAT e-Invoicing in Peru
IMF Working Papers, November 1, 2019
Source details
- Canonical URL
- Digitalization to Improve Tax Compliance: Evidence from VAT e-Invoicing in Peru
Other formats
Bibliographic details
- Authors: Matthieu Bellon, Jillie Chang, Era Dabla-Norris, Salma Khalid, Frederico Lima, Enrique Rojas, Pilar Villena
- Published: November 1, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513513713.001
Overview
- Title: Digitalization to Improve Tax Compliance: Evidence from VAT e-Invoicing in Peru
- By Matthieu Bellon, Jillie Chang, Era Dabla-Norris, Salma Khalid, Frederico Lima, Enrique Rojas, Pilar Villena
- Publication date: November 1, 2019
- Series: IMF Working Papers, Working Paper No. 2019/231
- Issue: 231
Key Findings
- E-invoicing increases reported firm sales, purchases and value-added by over 5 percent in the first year after adoption.
- The impact is concentrated among smaller firms and sectors with higher rates of non-compliance.
- The reform’s positive effects on tax collection are hindered by shortcomings in the VAT refund mechanism in Peru.
Mechanisms and Interpretation
- E-invoicing enhances compliance by:
- Lowering compliance costs.
- Strengthening deterrence against non-compliance.
- Concentration of effects:
- Stronger effects for smaller firms.
- Stronger effects in sectors with higher pre-existing non-compliance rates.
Policy Implications and Recommendations
- Digital tools such as e-invoicing can improve tax compliance and declared economic activity.
- To fully realize revenue gains, digitalization should be complemented by reforms addressing:
- VAT refund mechanism shortcomings.
- Other administrative and procedural constraints that limit the translation of compliance improvements into higher tax collection.
Content in this bundle
- Working Paper