Loading Events

« All Events

  • This event has passed.

Asymmetry in Civic Information: An Experiment on Tax Participation among Small and Informal Firms in Togo

October 20, 2021 — 12:30 pm to 1:45 pm

In low-income countries, tax collection practices can give rise to a substantial wedge between firms’ beliefs about what their tax obligations are and what they should actually pay, especially for small firms in the informal sector. Assistant Professor Paul Dower and colleagues ran a randomized controlled trial on informal and small scale firms in Lomé, Togo, to investigate whether alleviating this informational asymmetry improves tax participation. Surprisingly, the researchers found that treated firms, who they show are now better informed, participate less in the tax system. However, Dower and colleagues also found that this decline is steeper for treated firms with lower revenues at baseline. Given many of these firms are owner-operated, positive sorting by firm revenue is likely to be welfare-enhancing, the researchers provide suggestive evidence that this sorting also leads to an increase in total tax revenues.

Presenter: Paul Dower, assistant professor, Department of Agricultural & Applied Economics, UW–Madison

Paper: Asymmetry in Civic Information: An Experiment on Tax Participation among Small and Informal Firms in Togo

Details

Date:
October 20, 2021
Time:
12:30 pm to 1:45 pm
Event Categories:
,