TAX AMNESTIES AND TAX REVENUES

This article examines some unexplored and unresolved issues surrounding the Abstract impact of tax amnesties on tax revenues. The results indicate that amnesties can have a positive impact on compliance and tax collections, if the amnesty makes individuals see that paying taxes is the norm and if individuals anticipate a future amnesty that will have a tougher enforcement package than the current regime. However, the results also suggest that amnesties can reduce compliance if the individual jointly chooses the amount of past evasion to report in the amnesty and the amount of current income to declare to the authorities, or if the taxpayer anticipates another future amnesty with lax enforcement. In sum, the overall impact of tax amnesties on tax collections is uncertain. © 1990, Sage Publications. All rights reserved.