Cross-border shopping of alcoholic beverages reduces domestic sales and tax revenue. We estimate the magnitude of Norwegian cross-border shopping of hard liquor and wine and its effects on tax revenue by using the travel restrictions during the COVID-19 pandemic as a natural experiment. The Norwegian alcohol retail market is controlled by a state monopoly (Vinmonopolet), and our data set includes the complete transaction data of Vinmonopolet. The effects are identified by using a difference-in-difference approach comparing changes in sales in stores with different driving time to the nearest foreign alcohol store. We find reduced sales in the stores of Vinmonopolet for driving times up to three hours. The reduced sales are about 9% for wine and 6% for hard liquor corresponding to almost one billion NOK in lost annual tax revenue.

Products with negative externalities are often subject to regulations that limit competition. The single-product case may suggest that it is irrelevant for aggregate welfare whether output is restricted via corrective taxes or limiting competition. However, when products are differentiated curbing consumption through market power is costly if purchase decisions of inframarginal consumers are distorted. We examine a regulation known as post-and-hold (PH) used by a dozen states for the sale of alcoholic beverages. Theoretically, PH eliminates competitive incentives among wholesalers. We assemble unique data on distilled spirits from Connecticut, including matched manufacturer and wholesaler prices, to evaluate the welfare consequences of PH. PH leads to substantially lower consumer welfare compared to excise, sales or Ramsey taxes by distorting consumption choices away from high-quality and towards low-quality brands. Replacing PH with taxes could reduce consumption by over 9% without reducing consumer surplus, and increase tax revenues by over 300%.

This paper studies the repercussions of biased tax enforcement on firms’ export per- formance. Mandated transparency at Customs enhances tax authorities’ capabilities for scrutinizing exporting firms, potentially creating an implicit barrier to global market participation. Leveraging an institutional reform in China that introduced exogenous variations in tax enforcement practices for two sets of comparable firms, I estimate the impact of such information-based tax enforcement for manufacturing firms. I find that this bias leads to underperformance in export market, primarily in the intensive margin. Further investigation suggests that effects come from the product portfolio choices: firms under such bias display a great tendency to be a single-product exporter and have a smaller product scope. Heterogeneous effects underscore the paramount significance of fixed costs regarding exporting.

Taxes and tariffs on imports are a major source of government revenue for many developing countries. This means that tax evasion at the border through understating the amount and value of imports as well as mis-classifying them as lower-taxed goods represents a potentially significant loss to much-needed public funds. In the recent years, many countries implemented non-intrusive fixed cargo scanners at entry points as one way to mitigate such misreporting, providing a quasi-experimental treatment setting. Using transaction-level customs data for Uganda, we estimate the impact of scanners on trade and taxes collected at the border. Our estimates suggest that while these scanners reduced evasion, they also raised trade costs. The net impact of these two effects was to lower tariff revenues at the affected entry points by 0.898 percent and VAT receipts by 0.66 percent. t.