How can governments tackle tax evasion?

To explore this question, Professor Dina Pomeranz examined two Randomized Control Trials in Chile, and a natural experiment in Ecuador.

Her research indicates that firms are more likely to pay their taxes when they anticipate government sanctions and enforcement. Information alone is not enough to boost compliance; firms also need to believe that government will penalise evasion.

To learn more, read: https://voxdev.org/topic/public-economics/dodging-taxman-evidence-ecuador; https://www.povertyactionlab.org/sites/default/files/publications/role-vat-tax-enforcement.pdf; https://www.econ.uzh.ch/en/people/faculty/pomeranz.html

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