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Accepted Paper:

Hidden in plain sight. Measuring tax rule breaking  

Authors:

Lotta Björklund Larsen (University of Exeter)
Lynne Oats (University of Exeter)

Paper short abstract:

This paper revisits the work with recent quantifications of the tax gap in Sweden and the U.K. We consider the political framing of these tax gap calculations, where the appropriation of the gap ‘number’ by the commentariat has important implications for the management of tax rule breaking.

Paper long abstract:

(This paper is co-authored with Lynne Oats, University of Exeter.)

The tax gap is an increasingly common mechanism for assessing the mismatch between tax that theoretically should be collected, and tax that is actually collected. Many are the countries that attempt to estimate what can be conceived of as a ‘revenue loss’ and where rule breaking looms large. The work of quantifying the tax gap has assumed almost a mythical status, presumed to be an accurate reflection of a real phenomenon. Simple in theory, full of caveats in practice, this is a number that causes quite a stir when published: “Imagine the good policies that could be implemented if all due tax was collected”! Politicians and public administrators steer compliance policies according to the development of the tax gap, tax administrations see a shrinking tax gap as a sign of success and media and stakeholders make all sorts of comparison based on this fickle number.

This paper revisits the work with recent quantifications and calculations of the tax gap in Sweden and the United Kingdom. We consider the political framing of these tax gap calculations, where the appropriation of the gap ‘number’ by the commentariat has important implications for the management of tax rule breaking.

Panel Res05
Tax matters: are rules made to be broken?