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Publication year
Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia
Resource type
Authors/contributors
- Basri, M. Chatib (Author)
- Felix, Mayara (Author)
- Hanna, Rema (Author)
- Olken, Benjamin A. (Author)
Title
Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia
Abstract
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.
Publication
American Economic Review
Volume
111
Issue
12
Pages
3827-71
Date
2021-12
Citation
Basri, M. C., Felix, M., Hanna, R., & Olken, B. A. (2021). Tax Administration versus Tax Rates: Evidence from Corporate Taxation in Indonesia. American Economic Review, 111, 3827–3871.
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