The Dynamics of Tax Compliance

Francesco Pappadà (1, 2)

1 PSE - Paris School of Economics
2 Banque de France - Banque de France

The literature on tax compliance has focused on its level but little is known about its dynamics. This paper shows that fluctuations in tax compliance are driven by changes in the state of the economy and the response of tax compliance to them. Tax compliance is markedly volatile and there are large differences in such volatility across countries. A large fraction of these differences (about 70%) is explained by different responses of tax compliance to tax changes and output fluctuations.

Mots clés: Tax compliance; Volatility; Fiscal policy

Domaines: Economies et finances

Francesco Pappadà. The Dynamics of Tax Compliance. 2022. ⟨halshs-03634401⟩