## Tax Evasion from Cross-Border Fraud: Does Digitalization Make a Difference?

_IMF Working Papers, November 13, 2020_

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## Bibliographic details
- Authors: Emmanouil Kitsios, João Tovar Jalles
- Published: November 13, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513561189.001

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### Summary
- The paper examines how the use of digital technologies can reduce cross-border tax fraud and increase government revenue.
- Uses data on intra-EU and world trade transactions to evaluate prevalence of trade tax fraud and effects of border digitalization.
- Core claims:
  - Cross-border trade tax fraud is non-trivial and prevalent in many countries.
  - Use of digital technologies at the border can alleviate such fraud.
  - Potential revenue gains from digitalization could be substantial.

### Key findings
- Empirical evidence indicates cross-border trade tax fraud is widespread across many countries.
- Digitalization at the border is correlated with reductions in trade-related tax fraud.
- Quantified impact:
  - Halving the distance to the digitalization frontier could raise revenues by over 1.5 percent of GDP in low-income developing countries.

### Scope and data
- Data sources: intra-EU and world trade transactions.
- Subject areas: Digitalization, Imports, International trade, Revenue administration, Tariffs, Tax evasion, Taxes, Technology, Value-added tax.
- Keywords include: carousel fraud, digitalization index, e-government, transaction data, VAT revenue, tariff revenue, tax authority.

### Policy implications
- Enhancing border digitalization is a promising avenue for reducing cross-border tax fraud.
- Digital technology investments at border administration could yield substantial fiscal returns, especially in low-income developing countries where gains are estimated to be sizable.

### Publication metadata (selected)
- Authors: Emmanouil Kitsios, João Tovar Jalles
- Date: November 13, 2020
- Series: IMF Working Papers, Working Paper No. 2020/245
- Pages: 16
- DOI: https://doi.org/10.5089/9781513561189.001

*Tax Evasion from Cross-Border Fraud: Does Digitalization Make a Difference? By Emmanouil Kitsios and João Tovar Jalles. IMF Working Paper No. 2020/245, November 13, 2020.*

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2020/11/13/tax-evasion-from-cross-border-fraud-does-digitalization-make-a-difference-49857_