Reproducibility package for Electronic Payment Technology and Tax Compliance: Evidence from Uruguay’s Financial Inclusion Reform
Overview
Does the digitization of transactions in an economy increase tax compliance? We study the effect of financial incentives on the adoption of electronic payment technology and on tax compliance by firms. Exploiting administrative data and policy variation from Uruguay, we show that i) consumer VAT rebates for credit and debit card transactions trigger an immediate 50% increase in the number of card transactions, ii) firms’ use of card machines increases only on the intensive margin, and iii) tax compliance is unaffected. Endogenous card machine adoption and a low share of card sales in total reported sales can rationalize the findings.
Reproducibility Package
| Repository name | URI |
|---|---|
| Reproducible Research Repository (World Bank) | https://reproducibility.worldbank.org |
Reproducibility
• The public part of the code was reproduced in a computer with the following specifications:
– OS: Windows 11 Enterprise
– Processor: Intel(R) Core(TM) i5-1145G7 CPU @ 2.60GHz
– Memory available: 15.7 GB
– Software version: Stata version 17
• The private part of the code was reproduced in a private server with the following specifications:
– OS: Windows 10 Enterprise
– Processor: Intel(R) Xeon (R) CPU @ 2.80GHz
– Memory available: 71.1 GB
– Software version: Stata version 17
The code associated with this project is divided into public and private parts. The public portion of the code can be executed in approximately 2 minutes. The private part, as currently configured with a modified number of bootstrap iterations (as documented in the published version), takes about 8 hours to run. Additionally, the extended version of the private code, which includes the complete set of bootstrap iterations and aligns with the results presented in the paper, requires approximately 3 days for a full run.
To run the public part of the code the replicator only needs to open the main do file, change the paths, and run the code.
Data
This study utilizes two types of data, divided into two parts in the reproducibility package. The first part, the Private Part, contains confidential tax data from Uruguay and Costa Rica, focusing on firm-level VAT declarations. This data is accessible only to authorized personnel and is securely stored on a World Bank server. The second part, known as the Public Part, consists of datasets that replicate selected figures from the paper. This includes both included data and publicly available datasets, with specific access instructions provided in the metadata or README file. For any inquiries about the data, one can contact one of the authors, Magaly Sáenz Somarriba at msaenzsomarriba@worldbank.org.
Description
| Author | Affiliation | |
|---|---|---|
| Anne Brockmeyer | World Bank, Institute for Fiscal Studies, University College London and CEPR | abrockmeyer@worldbank.org |
| Magaly Sáenz Somarriba | World Bank | msaenzsomarriba@worldbank.org |
We are deeply indebted to the Uruguayan authorities for an outstanding collaboration. We particularly thank Felipe Quintela and Fernando Pelaez at the General Directorate of Taxation, Ariel Cancio and Florencia López from the Ministry of Economy and Finance, and Martin Vallcorba. We are grateful to La´ısa Rachter de Sousa Dias for excellent research assistance and to Deeksha Kokas for help with the Findex data. We thank Juliana Londoño Vélez for excellent contributions in the beginning of this project. Marcelo Bergolo, Naomi Feldman, Dirk Foremny, Rafaella Giacomini, Sean Higgins, Michael Keen, Leora Klapper, Dennis Kristensen, Vedanth Nair, Joana Naritomi, Panayiotis Nicolaidis, Eduardo Olaberria, David Phillips, Daniel Prinz, Dorothee Singer, Joel Slemrod, Tavneet Suri, Alisa Tazhitdinova, Javier V´azquez-Grenno and seminar/conference participants at the World Bank, NTA, AEA, the Gates Foundation, Chr. Michelsen Institute, IEB Barcelona, the IGC and IFSUCL-STICERD provided helpful comments. The work benefited from funding from the World Bank through the Research Support Budget and from Macroeconomics, Trade and Investment Global Practice; from UK aid from the UK government via the Centre for Tax Analysis in Developing Countries (TaxDev), and from the UKRI through Brockmeyer’s UKRI Future Leaders Fellowship (grant reference MR/V025058/1). The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent.
2024-01
Scope and coverage
| Location | Code |
|---|---|
| Uruguay | URY |
Disclaimer
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
Access and rights
| Name | URI |
|---|---|
| Modified BSD3 | https://opensource.org/license/bsd-3-clause/ |
Contacts
| Name | Affiliation | |
|---|---|---|
| Magaly Sáenz Somarriba | World Bank | msaenzsomarriba@worldbank.org |
| Reproducibility WBG | World Bank | reproducibility@worldbank.org |
Information on metadata
| Name | Abbreviation | Affiliation | Role |
|---|---|---|---|
| Reyes Retana | MRR | World Bank | Junior Data Scientist |
2024-01-02
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