Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia
We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into “medium taxpayer offices,” with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining nonlinear changes to corporate income tax rates, we...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | en_US |
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American Economic Association
2024
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| Subjects: | |
| Online Access: | https://hdl.handle.net/1721.1/153913 |
| _version_ | 1811084203955060736 |
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| author | Basri, M. Chatib Felix, Mayara Hanna, Rema Olken, Benjamin A. |
| author_facet | Basri, M. Chatib Felix, Mayara Hanna, Rema Olken, Benjamin A. |
| author_sort | Basri, M. Chatib |
| collection | MIT |
| description | We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into “medium taxpayer offices,” with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining nonlinear changes to corporate income tax rates, we estimate an elasticity of taxable income of 0.579. Combining these estimates, improved tax administration is equivalent to raising top rates on all firms by 8 percentage points. On net, improved tax administration can have significant returns for developing countries. (JEL H25, H26, K34, O17). |
| first_indexed | 2024-09-23T12:46:57Z |
| format | Article |
| id | mit-1721.1/153913 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T12:46:57Z |
| publishDate | 2024 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1539132024-03-22T03:37:55Z Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia Basri, M. Chatib Felix, Mayara Hanna, Rema Olken, Benjamin A. Economics and Econometrics We compare two approaches to increasing tax revenue: tax administration and tax rates. We show that when Indonesia moved top regional firms into “medium taxpayer offices,” with high staff-to-taxpayer ratios, tax revenue more than doubled. Examining nonlinear changes to corporate income tax rates, we estimate an elasticity of taxable income of 0.579. Combining these estimates, improved tax administration is equivalent to raising top rates on all firms by 8 percentage points. On net, improved tax administration can have significant returns for developing countries. (JEL H25, H26, K34, O17). 2024-03-21T20:18:16Z 2024-03-21T20:18:16Z 2021-12-01 Article http://purl.org/eprint/type/JournalArticle 0002-8282 https://hdl.handle.net/1721.1/153913 Basri, M. Chatib, Mayara Felix, Rema Hanna, and Benjamin A. Olken. 2021. "Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia." American Economic Review, 111 (12): 3827-71. en_US 10.1257/aer.20201237 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association Author |
| spellingShingle | Economics and Econometrics Basri, M. Chatib Felix, Mayara Hanna, Rema Olken, Benjamin A. Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia |
| title | Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia |
| title_full | Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia |
| title_fullStr | Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia |
| title_full_unstemmed | Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia |
| title_short | Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia |
| title_sort | tax administration versus tax rates evidence from corporate taxation in indonesia |
| topic | Economics and Econometrics |
| url | https://hdl.handle.net/1721.1/153913 |
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