The Studi di Settore are used by the Italian tax administration to calculate reference revenue levels for small businesses and provide a kind of cut-off level for tax audits. Recently new rules have been introduced in order to render the Studi di Settore more efficient in producing realistic estimates, with the aim of reducing the "legalized evasion" that might arise in case of a systematic downward bias. Voices of the involved categories, however, convinced the Government to partially step back. Building upon the standard firm's tax evasion model of Cowell [Cowell, F.A., 2004. Carrots and sticks in enforcement. In: Aaron, H.J., Slemrod, J. (Eds.), The Crisis in Tax Administration. The Brookings Institution, Washington DC, pp. 230-275] and the approach of Santoro [Santoro, A.C., 2006. Evasione delle società di capitali: evidenze empiriche e proposte di policy. In: Brosio, G., Muraro, M. (Eds.), Il Finanziamento del Settore Pubblico. SIEP, Angeli, Milano, pp. 163-186] we show that, under given conditions, a stringency increase might backfire implying a larger overall tax evasion and a smaller tax revenue.

A model of the Italian cut-off system for taxing small businesses

PRIVILEGGI, Fabio
2009-01-01

Abstract

The Studi di Settore are used by the Italian tax administration to calculate reference revenue levels for small businesses and provide a kind of cut-off level for tax audits. Recently new rules have been introduced in order to render the Studi di Settore more efficient in producing realistic estimates, with the aim of reducing the "legalized evasion" that might arise in case of a systematic downward bias. Voices of the involved categories, however, convinced the Government to partially step back. Building upon the standard firm's tax evasion model of Cowell [Cowell, F.A., 2004. Carrots and sticks in enforcement. In: Aaron, H.J., Slemrod, J. (Eds.), The Crisis in Tax Administration. The Brookings Institution, Washington DC, pp. 230-275] and the approach of Santoro [Santoro, A.C., 2006. Evasione delle società di capitali: evidenze empiriche e proposte di policy. In: Brosio, G., Muraro, M. (Eds.), Il Finanziamento del Settore Pubblico. SIEP, Angeli, Milano, pp. 163-186] we show that, under given conditions, a stringency increase might backfire implying a larger overall tax evasion and a smaller tax revenue.
2009
63
2
127
134
http://dx.doi.org/10.1016/j.rie.2009.04.003
Tax evasion by firms; Cut-off rule
C. Marchese; F. Privileggi
File in questo prodotto:
File Dimensione Formato  
MarchesePrivileggi09.pdf

Accesso riservato

Tipo di file: PDF EDITORIALE
Dimensione 742.56 kB
Formato Adobe PDF
742.56 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
OAMarchesePrivileggi09.pdf

Accesso aperto

Tipo di file: POSTPRINT (VERSIONE FINALE DELL’AUTORE)
Dimensione 279.73 kB
Formato Adobe PDF
279.73 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/135469
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 3
  • ???jsp.display-item.citation.isi??? ND
social impact