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- Title
Strategic or Confused Firms? Evidence from "Missing" Transactions in Uganda.
- Authors
Almunia, Miguel; Hjort, Jonas; Knebelmann, Justine; Tian, Lin
- Abstract
Are firms sophisticated maximizers, or do they appear to make mistakes? Using transaction data from Ugandan value-added tax returns, we show that sellers and buyers report different amounts 79% of the time, despite invoices being easily cross-checked. Our estimates suggest that most firms are "advantageous misreporters," but that 25% are "disadvantageous misreporters" who systematically overreport own sales minus purchases such that their tax liability increases. Similarly, many firms—especially disadvantageous misreporters—fail to VAT-report imported inputs they themselves reported at Customs, increasing their liability. On net, unilateral VAT misreporting cost Uganda about US$384 million in foregone 2013–2016 tax revenue.
- Subjects
UGANDA; VALUE-added tax; INTERNAL revenue; TAX returns; BUSINESS enterprises; INVOICES
- Publication
Review of Economics & Statistics, 2024, Vol 106, Issue 1, p256
- ISSN
0034-6535
- Publication type
Article
- DOI
10.1162/rest_a_01180