This paper studies the role of cashless payments in third-party reporting for the purposes of Value Added Tax compliance management. In economies with well-developed financial institutions, the traceability of digital payments could serve as a deterrent to sales suppression even in the absence of explicit policies utilizing electronic payments for tax enforcement. Using country-level data for the European Union, this paper shows that a 1% increase in the value of payments made with cards to GDP improves VAT performance by 0.05 to 0.09%. This effect is found to be strongest in economies characterized by low level of trust in public institutions, and does not vary with the extent of third-party reported information used by tax administrations, or the presence of a large-scale VAT invoice matching system. The result is robust to a rich number of characteristics controlling for various aspects of VAT’s design.

中文翻译：

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可追溯的付款和增值税设计：对增值税绩效的影响

本文研究了无现金支付在第三方报告中的作用，以实现增值税合规管理。在金融机构发达的经济体中，即使没有明确的利用电子支付执行税收的政策，数字支付的可追溯性也可以阻止销售抑制。使用欧盟的国家/地区数据，本文显示，信用卡支付的国内生产总值增加1％，可将增值税表现提高0.05-0.09％。在以公共机构信任度低为特征的经济体中，这种影响最为明显，并且不会随税务机关使用第三方报告的信息的程度或存在大规模的增值税发票匹配系统而变化。