## Digitalization to Improve Tax Compliance: Evidence from VAT e-Invoicing in Peru

_IMF Working Papers, November 1, 2019_

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## 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

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### 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.

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2019/11/01/digitalization-to-improve-tax-compliance-evidence-from-vat-e-invoicing-in-peru-48672_