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Audit Publicity and Tax Compliance: A Natural Experiment
Author(s) -
Battiston Pietro,
Duncan Denvil,
Gamba Simona,
Santoro Alessandro
Publication year - 2020
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12330
Subject(s) - publicity , audit , compliance (psychology) , business , accounting , natural experiment , payment , confidentiality , value added tax , public economics , economics , finance , marketing , political science , law , psychology , social psychology , statistics , mathematics
We use confidential data on value‐added tax payments at the sector level, in two large Italian cities, to estimate the effect of audit publicity on the tax compliance of local sellers. By employing a difference‐in‐differences identification strategy, we find that such publicity has a positive effect on fiscal declarations made shortly thereafter. The results suggest that increasing awareness on future audits via the media can be an important instrument in the hands of tax authorities.