International Tax and Public Finance

, Volume 2, Issue 3, pp 397–417

Administrative corruption and taxation

Authors

  • Frank Flatters
    • Department of EconomicsQueeen's University
  • W. Bentley Macleod
    • Université de Montréal, C.R.D.E.
Article

DOI: 10.1007/BF00872774

Cite this article as:
Flatters, F. & Macleod, W.B. Int Tax Public Finan (1995) 2: 397. doi:10.1007/BF00872774

Abstract

Administrative corruption, whereby taxpayers and collectors collude to reduce remissions, is central to tax evasion in developing countries. A framework is developed for the analysis of such corruption, based on imperfect information concerning true tax liabilities. Some tolerance of corruption can be part of an efficient collection system, especially when there are constraints on government wages or effort is required to learn payers' tax liabilities. With variable collector effort a certain amount of corruption is required, together with a two-level penalty structuredismissal if revenue targets are not met and much heavier penalties for gross corruption.

Key words

corruptiondevelopmenttaxes

Copyright information

© Kluwer Academic Publishers 1995