Strategic or Confused Firms? Evidence from "Missing" Transactions in Uganda / Miguel Almunia, Jonas Hjort, Justine Knebelmann, Lin Tian.

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Almunia, Miguel

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w29059.Publication details: Cambridge, Mass. National Bureau of Economic Research 2021.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Are firms sophisticated maximizers, or do they consistently make errors? Using transaction-level data from Ugandan value-added tax (VAT) returns, we show that sellers and buyers report different amounts 79% of the time, despite invoices being easily cross-checked. We estimate that 25% of firms are disadvantageous misreporters--they systematically misreport own sales and purchases such that their tax liability increases--while 75% are advantageous misreporters. Many firms--especially disadvantageous misreporters--fail to report imported inputs they themselves reported at Customs, increasing their VAT liability. On net, unilateral VAT misreporting cost Uganda about US$384 million in foregone 2013-2016 tax revenue

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w29059 (Browse shelf(Opens below))	Not For Loan

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July 2021.

Are firms sophisticated maximizers, or do they consistently make errors? Using transaction-level data from Ugandan value-added tax (VAT) returns, we show that sellers and buyers report different amounts 79% of the time, despite invoices being easily cross-checked. We estimate that 25% of firms are disadvantageous misreporters--they systematically misreport own sales and purchases such that their tax liability increases--while 75% are advantageous misreporters. Many firms--especially disadvantageous misreporters--fail to report imported inputs they themselves reported at Customs, increasing their VAT liability. On net, unilateral VAT misreporting cost Uganda about US$384 million in foregone 2013-2016 tax revenue