Document Type

Article

Publication Date

10-1993

Abstract

This paper uses a game-theoretic model of the tax compliance game to estimate a model of audit selection and income tax underreporting in Jamaica. The empirical analysis make use of audited tax returns for individual taxpayers, and a random sample of tax returns for the population from which the audited returns are selected. The estimation results strongly indicate a nonrandom audit strategy, and thus provide support for the game-theoretic approach. The results also indicate that the probability of underreporting and the level of underreporting are positively related to the marginal tax rate and to income, and negatively related to marginal payroll tax benefits; in general, the underreporting elasticities are small.

Comments

Originally published in

James Alm, Roy Bahl, Matthew N. Murray, Audit selection and income tax underreporting in the tax compliance game, Journal of Development Economics, 42(1), 1-33, 1993. https://doi.org/10.1016/0304-3878(93)90070-4.

(c) Elsevier. Posted by permission.

DOI

https://doi.org/10.1016/0304-3878(93)90070-4

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