Tax evasion by tax deferment: Sham litigation with an informal credit market
European Journal of Political Economy
We show theoretically how tax evasion is facilitated by informal credit market through tax deferment. Our model is empirically based. Using sham litigation, tax evaders earn a higher rate of return than the stipulated penalty rate for tax evasion while the government loses tax revenue. We propose an upfront part–payment of the disputed amount of tax as a solution to the form of tax evasion we describe.
Marjit, Sugata; Mishra, Suryaprakash; and Mitra, Sandip, "Tax evasion by tax deferment: Sham litigation with an informal credit market" (2021). ISI Best Publications. 18.