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Mathematical models for organizing the tax service

  • Mathematical Models of Control
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Abstract

Game-theoretical models are proposed for describing the interaction of tax inspectors and taxpayers. A return-auditing probability that maximizes net tax revenue is calculated for a model without corruption. A dynamic audit strategy is described, and it is shown to converge to the optimal model under complete information. For a model with corruption, we also calculate the optimal probability of secondary audit and carry out a comparative analysis of net tax revenue assuming various tax rates and various penalties for evasion and negligent audit.

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Authors
  1. A. A. Vasin
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Additional information

The study was partially supported by the Russian Program for Economic Studies (grant 97-3011) and Russian Foundation of Basic Research (grant 96-01-0999). Useful comments by Mikhail Alekseev, Jim Leitzel, and Francisco Marhuenda are acknowledged.

Translated from Chislennye Metody i Vychislitel'nyi Eksperiment, Moscow State University, pp. 64–81, 1998.

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Vasin, A.A. Mathematical models for organizing the tax service. Comput Math Model 10, 379–391 (1999). https://doi.org/10.1007/BF02359088

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