Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201962 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7736
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
During the period 1996-2000, the coverage of VAT in Pakistan rose by twenty times in terms of the number of firms in the tax net and by ten times in terms of the volume of transactions subject to it. This paper leverages this staggered introduction of VAT in the country to estimate its enforcement spillovers. Focusing on firms already in the tax net, I explore if their tax compliance improves as VAT gets extended to their trading partners. Using differential responses to upward and downward extension of the tax, I characterize the mechanisms underlying the self-enforcement response.
Subjects: 
VAT
tax evasion
informality
JEL: 
H25
H26
O17
Document Type: 
Working Paper
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