Bureaucratic Corruption and Profit Tax Evasion

27 Pages Posted: 23 Mar 2006

See all articles by Laszlo Goerke

Laszlo Goerke

University of Trier - Institute of Labour Law and Industrial Relations in the European Union; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: February 2006

Abstract

Firms may evade taxes on profits and can also avoid fulfilling legal restrictions on production activities by bribing bureaucrats. It is shown that the existence of tax evasion does not affect corruption activities at the firm level, while the budgetary repercussions of tax evasion induce less corruption. Policy measures which alter the gains or losses from corruption have a non-systematic impact on tax evasion behaviour.

Keywords: corruption, firms, tax evasion

JEL Classification: D73, H25, H26

Suggested Citation

Goerke, Laszlo, Bureaucratic Corruption and Profit Tax Evasion (February 2006). CESifo Working Paper Series No. 1666, Available at SSRN: https://ssrn.com/abstract=892726

Laszlo Goerke (Contact Author)

University of Trier - Institute of Labour Law and Industrial Relations in the European Union ( email )

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Trier, 54296
Germany

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CESifo (Center for Economic Studies and Ifo Institute)

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IZA Institute of Labor Economics

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