Leveraging Digital Technologies in Boosting Tax Collection

Excerpt:  “There is a positive relationship between firm digitalization and domestic tax revenues. Countries with higher level of business digital adoption have larger tax-to-GDP ratios. A two-way fixed effect regression at firm-level reveals that firms using more [Information and Communication Technology (ICT)] as inputs for their intermediate production are also more likely to pay taxes, pay more taxes when they do pay taxes, and pay a larger share of their operating revenues in taxes. A causal interpretation of this relationship, however, cannot be established with certitude.”