Journal article
Do lower taxes reduce informality? Evidence from Brazil
- Abstract:
- We exploit a unique, large-scale formalization program in Brazil to estimate the effects of reducing the costs of formality on firm formalization. We rely on both firm-level administrative data and individual panel data to show that reducing taxes once registration costs have already been eliminated reduces firm informality. This effect comes from the formalization of existing informal firms, and not from the creation of new formal businesses nor greater formal firm survival. The implied formalization elasticity is otherwise low, and our cost-benefit analysis indicates that the program led to net losses in tax revenues.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
Actions
Access Document
- Files:
-
-
(Preview, Accepted manuscript, pdf, 758.6KB, Terms of use)
-
- Publisher copy:
- 10.1016/j.jdeveco.2018.04.003
Authors
- Publisher:
- Elsevier
- Journal:
- Journal of Development Economics More from this journal
- Volume:
- 134
- Pages:
- 28-49
- Publication date:
- 2018-04-12
- Acceptance date:
- 2018-04-04
- DOI:
- ISSN:
-
0304-3878
- Language:
-
English
- Keywords:
- Pubs id:
-
pubs:944061
- UUID:
-
uuid:d6e8548e-f15e-4652-8efb-ea5fd154f3f0
- Local pid:
-
pubs:944061
- Source identifiers:
-
944061
- Deposit date:
-
2018-11-19
- ARK identifier:
Terms of use
- Copyright holder:
- Elsevier BV
- Copyright date:
- 2018
- Rights statement:
- Copyright © 2018 Elsevier B.V.
- Notes:
- This is the accepted manuscript version of the article. The final version is available online from Elsevier at https://doi.org/10.1016/j.jdeveco.2018.04.003
If you are the owner of this record, you can report an update to it here: Report update to this record