Description:

Speaker: Devis Decet

Title: Tax administration organization and fiscal capacity

Abstract: This paper studies how the centralization of tax administration impacts fiscal capacity. Following a sizable reduction in personnel due to retirements and externally imposed budget cuts, the Brazilian federal tax authority closed three local tax offices in 2017 and twenty-four in 2020. Affected municipalities experienced a reduction in tax collection after the closings. The absence of evidence for differential trends in tax collection or economic activity suggests that the observed tax revenue decline is due to a reduction in tax enforcement. I investigate the role of a specific mechanism: the distance between tax offices and municipalities. Results suggest that, despite the pervasive role of technology in tax collection and auditing, physical distance remains a relevant friction and limits tax officials' ability to monitor local economic activity.

If you plan to join and have lunch at the presentation, please take the time to confirm your attendance and food preference in this Google spreadsheet by Monday 5/27 at 5:00pm. We hope to see you there.