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 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.
Date: 8 June 2022, 15:00 (Wednesday, 7th week, Trinity 2022)
Venue: By Zoom
Speaker: Mayara Felix (Harvard Kennedy School of Government)
Organising department: Saïd Business School
Organisers: Dr Alice Pirlot (Oxford University Centre for Business Taxation), Dr Martin Simmler (Oxford University Centre for Business Taxation)
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Part of: Oxford University Centre for Business Taxation Research Seminars
Booking required?: Required
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Audience: Members of the University only
Editor: Alison Meeson