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15 eJTR 190 (2017)
Corruption, Taxes and Compliance

handle is hein.journals/ejotaxrs15 and id is 190 raw text is: eJournal of Tax Research (2017) vol 15, no. 2, pp. 190-216 Corruption, taxes and compliance Anja Baum,' Sanjeev Gupta,2 Elijah Kimani3 and Sampawende Jules Tapsoba4 Abstract This article revisits the effects of corruption on the state's capacity to raise revenue, building on the existing empirical literature using new and more disaggregated data. We use a comprehensive dataset for 147 countries spanning 1995-2014, compiled by the International Monetary Fund. The study finds that-consistent with the existing literature-corruption is negatively associated with overall tax revenue, and most of its components. This relationship is predominantly influenced by the way corruption interacts with tax compliance. The establishment of large taxpayer offices within revenue administrations improves tax compliance by dampening the perception of corruption, thereby boosting revenue. Keywords: taxation, compliance, corruption Anja Baum, Economist at the IMF, abaum@imf.org. 2 Sanjeev Gupta, Deputy Director, Fiscal Affairs Department, IMF, sgupta@imf.org. Elijah Kimani, Graduate Student, Princeton University, elijahkimanil7@gmail.com. 4 Sampawende Jules Tapsoba, Economist at the IMF, stapsoba@imf org. We would like to thank Vitor Gaspar, Michael Keen, Paolo Mauro, Kevin Greenidge, Ashvin Ahuja, Davide Furceri, Claudia Berg, Suhaib Kebhaj, Carlos Goncalves, Antonio Spilimbergo, Santiago Acosta Ormaechea, Ricardo Llaudes, and John Ralyea for their helpful comments, as well as participants of the IMF's Fiscal Affairs Department seminar for their insightful comments. We are grateful to Mark Albertson for his research assistance.

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