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The Cost of Evading: Evidence on Tax Evasion Mitigation from Ecuador

Ecuador

Credit: Rotten Assembly

The Ecuadorian currency tax (ISD in Spanish) taxes money transfers abroad at rates and exemption thresholds that change periodically without public anticipation. The research team will spend the summer in Quito at the Ecuadorian tax authority using administrative tax data to quantify the avoidance response to the ISD, and in doing so, producing new estimates of the tax avoidance elasticity. They will also study the changes in flows to and from tax havens using new monitoring infrastructure.
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