The Role of Withholding in the Self-Enforcement of a Value-Added Tax: Evidence from Pakistan
利用巴基斯坦增值税分阶段推行的数据，研究发现增值税向上游延伸触发预扣机制后，企业报告销售额立即大幅增长超过40%，表明预扣机制能有效促进增值税的自我执行。
Abstract I leverage the staggered rollout of VAT in Pakistan to document the role of withholding mechanism in the self-enforcement of a VAT. Focusing on firms already in the tax net, I see how their outcomes respond when the tax is extended upward to intermediates used by them. I find that the upward extension of VAT, which triggers the withholding mechanism, causes an immediate and large (more than 40 log points) surge in sales reported by firms. The evolution of bunching above the zero-liability point and of input costs reported by firms suggests that this large response is indeed driven by the withholding mechanism. I also explore the role of withholding in the extensive margin compliance choices of firms.