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Informal Taxation ∗ (2011)
| Citations: | 7 - 0 self |
BibTeX
@MISC{Olken11informaltaxation,
author = {Benjamin A. Olken and Monica Singhal and Amy Finkelstein and Roger Gordon and Seema Jayach and Henrik Kleven and Wojciech Kopczuk and Angelin Baskaran and Octavia Foarta and Angela Kilby and Arash Nekoei},
title = {Informal Taxation ∗},
year = {2011}
}
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Abstract
Informal payments are a frequently overlooked source of local public finance in developing countries. We use microdata from ten countries to establish stylized facts on the magnitude, form, and distributional implications of this "informal taxation. " Informal taxation is widespread, particularly in rural areas, with substantial in-kind labor payments. The wealthy pay more, but pay less in percentage terms, and informal taxes are more regressive than formal taxes. Failing to include informal taxation underestimates household tax burdens and revenue decentralization in developing countries. We discuss various explanations for and implications of these observed stylized facts.
Keyphrases
informal taxation stylized fact various explanation distributional implication informal tax revenue decentralization wealthy pay formal tax informal taxation underestimate informal payment local public finance substantial in-kind labor payment rural area ten country percentage term tax burden
