Essays on Tax Administration


Salvadori, Luca


Durán Cabré, José María

Esteller Moré, Alejandro

Date of defense


Legal Deposit

B 18565-2015


135 p.


Universitat de Barcelona. Departament d'Economia Pública, Economia Política i Economia Espanyola


Tax administration is central to the working of any tax system. This thesis focuses on the Spanish case and proves the existence of two kind of externalities that might arise in tax administration policies when decentralized. These are: inter-jurisdictional externalities due to the federal institutional design (competition vs. cooperation), and tax authority's endogenous reaction to external shocks (in terms of changes in tax enforcement) as a result of tax autonomy. The focus for the whole research line developed in this thesis is Spain, which provides a interesting federal framework for investigation. Indeed the regional governments of fifteen of the seventeen “common” regime autonomous communities have had the power to administer several wealth taxes since the mid-eighties and subsequent reforms, in 1997 and 2002, have conferred on them the normative power to make changes to certain statutory tax parameters (see Esteller, 2008, for further details on these reforms). The other two regions, the so-called “foral” autonomous communities (the Basque Country and Navarre), for historical reasons, administer almost all the taxes falling due within their territory – including VAT, personal income tax and corporate income tax – and they have the normative power to regulate most of them . This setting provides me with the opportunity to explore different types of externalities that might impact tax administration policies. In Chapter 2 the presence of horizontal competition in tax enforcement is examined in the context of the common regime autonomous communities. Chapter 3 presents an analysis of the potential room for cooperation derived from misreported tax returns in this federal context. Chapter 4 estimates the externality effect on tax enforcement caused by the costs of terrorism in the foral autonomous communities. The three central chapters of this thesis represent something of a novelty in the literature as they are the first empirical studies on externalities in tax administration policies. The whole research line shows that in a federal framework these policies are employed by tax authorities as strategic instruments, demonstrating that decentralizing tax administration gives regional governments additional degrees of tax autonomy. In particular, Chapters 2 and 4 show that tax enforcement policies can be used by tax authorities in order to counter the loss of revenues due to the potential mobility of tax bases. In both studies, tax administrations are found to lower the tax burden by cutting the tax audit rate in order to retain mobile tax bases, where the taxpayers’ incentive to move is based solely on classic horizontal tax competition or, alternatively, on an external shock such as terrorism. In the context of horizontal tax competition presented in Chapter 2, the mutual strategic reaction of tax authorities generates inefficiency in the setting of enforcement policies. Although this problem is partially reduced by the subsequent decentralization of normative power, the further inefficiencies that arise open the door for future research in this field so as to identify means, other than harmonization, that might circumvent this issue. Chapter 4 allows us to conclude that part of the shock due to terrorism is internalized by the tax administration and, thus, further research is needed in order to disentangle the actual impact of terrorism in terms of economic costs for the region. Chapter 3 shows that potential cooperation in tax management is possible when tax administration is decentralized at a sub-central level although it is partially undermined by short-sighted incentives caused by administrative, transaction and financial costs.


Política fiscal; Fiscal policy; Finances públiques; Hacienda pública; Public finance


33 - Economia

Knowledge Area

Ciències Jurídiques, Econòmiques i Socials






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