Template-Type: ReDIF-Paper 1.0
Author-Name: Bhanu Gupta
Author-Name-First: Bhanu
Author-Name-Last: Gupta
Author-Email: bhanu.gupta@ashoka.edu.in
Author-Workplace-Name: Ashoka University
Author-Name: Tejaswi Velayudhan
Author-Name-First: Tejaswi
Author-Name-Last: Velayudhan
Author-Email: tvelayud@uci.edu
Author-Workplace-Name: University of California, Irvine
Author-Name: Prince Dhawan
Author-Name-First: Prince
Author-Name-Last: Dhawan
Author-Email: princedhawan@gmail.com
Author-Workplace-Name: Government of NCTD
Author-Name: Ankur Garg
Author-Name-First: Ankur
Author-Name-Last: Garg
Author-Email: gargankur1980@gmail.com
Author-Workplace-Name: Government of NCTD
Title: Limits to VAT Self-Enforcement: Role of Network Frictions in Compliance
Abstract: The Value-Added Tax incentivizes taxpayers to self-enforce compliance within a supply chain. Combining administrative tax data and a randomized experiment in New Delhi nudging on-time payment, we show that the same incentives that create positive compliance spillovers can constrain enforcement when suppliers are delinquent, because influencing supplier behavior is costly. While nudges increase compliance by 8 percent on average, only taxpayers with high compliance in their supplier network respond. Taxpayers file on time, yet lower net tax payments and continue buying from delinquent suppliers. Our findings highlight how the effectiveness and distributional burden of enforcement depends on production networks.
length: 67
Creation-Date: 20250916
Revision-Date: 
Publication-Status: 
File-URL:/www/wwwashokaeduin_628/public/dp/RePEc/ash/wpaper/paper155_0.pdf
File-Format: Application/pdf 
Number: 155
Handle: RePEc:ash:wpaper:155