Conference Agenda

This paper explores how digitalization in the corporate sector can boost tax revenue collection. finding that stronger firm digitalization is associated with higher tax revenues across countries and also higher tax paid across firms. The cross-country estimates illustrate that a one-standard-deviation increase in firm digitalization is associated with an increase in tax-to-GDP by up to 3 percentage points, conditional upon the level of digitalization of tax administration. Firm digitalization significantly improves tax compliance among high-risk taxpayers, such as small and informal enterprises, particularly in the service sector. This indicates that digitalization not only broadens the corporate tax base but also plays a crucial role in improving tax compliance. Both country and firm-level analyses reveal a significant synergy between firm digitalization and GovTech, undescoring the importance of promoting both to enhance tax collection.

Digital monitoring technologies promise “automated enforcement,” but in many low-capacity states, compliance cannot be mandated—firms must be induced to opt in. We study what such reforms deliver when participation is voluntary, and enforcement credibility is limited. Using administrative panel data matched to transaction level device records from a real-time reporting program in Pakistan, we track both selection into integration and the dynamic effects of adoption. Take-up is sharply selected: adopters are firms already more engaged with the tax system before integration. Conditional on adoption, reported activity and tax payments rise immediately but fade within months, consistent with learning about the authority’s ability to sustain follow-up. Finally, incentive design shapes the reform’s equilibrium effects: linking preferential rates to restrictions on input-credit claims shifts reporting away from inputs documentation, weakening the self-enforcing VAT chain. The results highlight credibility and design—not technology alone—as central to digital state-building.

Do standard fiscal policy tools work for state-owned enterprises (SOEs)? We address this question by exploiting a bonus depreciation policy in China as a quasi-natural experiment. Using a staggered difference-in-differences design on national tax survey data, we find that while private firms increase investment by 11% in response to the tax incentive, SOEs show no reaction on average—a result that holds even for the most financially constrained firms and those with high shares of private capital. However, we find that SOE investment is activated through a political channel: local SOEs increase investment only when their controlling governments face pressure from growth slowdown, revealing a dual mechanism for fiscal stimulus: market-based for private firms and political for state-owned firms.

Multinational enterprises (MNEs) organize diverse business functions across  jurisdictions, yet evidence on how taxation shapes these location choices is limited. We exploit a new micro-level  Country-by-CountryReporting (CbCR) dataset that identifies individual MNE affiliates and their functions, overcoming the constraints of previously aggregated data. The microdata reveal new descriptive patterns in the global  organization of production and enable more precise analysis of how functions such as manufacturing, R&D, holding activities, and internal finance respond to tax environments. Our results provide the first micro-based evidence on the tax sensitivity of MNE business functions, offering new insights for international tax policy.