Tax Evasion from Cross-Border Fraud

Loading...
Thumbnail Image

Date

2020-11-13

Journal Title

Journal ISSN

Volume Title

Publisher

IMF

Abstract

How can governments reduce the prevalence of cross-border tax fraud? This paper argues that the use of digital technologies offers an opportunity to reduce fraud and increase government revenue. Using data on intra-EU and world trade transactions, we present evidence that (i) cross-border trade tax fraud is non-trivial and prevalent in many countries; (ii) such fraud can be alleviated by the use of digital technologies at the border; and (iii) potential revenue gains of digitalization from reducing trade fraud could be substantial. Halving the distance to the digitalization frontier could raise revenues by over 1.5 percent of GDP in low-income developing countries.

Description

Keywords

Digitalization, Imports, International trade, Revenue administration, Tariffs, Tax evasion, Taxes, Technology, Value-added tax

Citation