Tax Evasion,Corruption and Tax Loopholes |
| |
| Authors: | Sugata Marjit André Seidel Marcel Thum |
| |
| Affiliation: | 1. Calcutta University;2. TU Dresden;3. TU Dresden, ifo Dresden & CESifo |
| |
| Abstract: | This paper addresses tax loopholes that allow firms to exploit borderline cases between legal tax avoidance and illegal tax evasion. In general, tax loopholes are detrimental to a revenue‐maximizing government. This may change in the presence of corruption in the tax administration. Tax loopholes may serve as a separating mechanism that helps governments maximize revenues and curb corruption, which may explain why developing countries only gradually close loopholes in their tax codes. |
| |
| Keywords: | Tax evasion tax avoidance corruption enforcement |
|
