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The paper examines the impact of providing market-based reference prices on public procurement efficiency in Brazil. Specifically, the study focuses on the State Secretariat of Health (SES) in Rio Grande do Sul and the algorithm developed by the local tax administration to calculate representative reference prices for pharmaceutical products. Unlike previous studies, reference prices are calculated based on the universe of local business-to-business transactions. The study finds that SES procurement officers access to this information caused a significant reduction in purchase unit prices, particularly for products characterized by a higher ex-ante unit price, a smaller number of suppliers, and purchased by a smaller number of public institutions. The gains in efficiency are attributed to the use of up-to-date market information, which is particularly useful for products where information asymmetry is more likely to exist between procurement officers and private providers.

This paper studies tax evasion in the form of under-reported wages in Ecuador using microdata from a combination of electronic billing and personal income tax returns filed in 2017. Bringing together this novel combination of data, the study applies the standard method Pissarides and Weber (1989) used to estimate the under-reporting of income by comparing public- and private-sector employees. The results demonstrate empirically that under-reporting of income in private-sector employees is between 7 and 9 percent of their income, which translates to an estimated 3 percent of unregistered GDP. The under-reporting has important implications for social security, reducing these contributions by about 10 percent. Beyond the overall picture of under-reporting, the study detects substantial heterogeneities concerning firm size, concluding that the gap size is negatively correlated with the number of employees at the firm, which is consistent with different risks and administrative costs of envelope wages in small versus large firms.

This publication reviews the history of digitalization of tax administration in Korea dating back to the 1990s and shares the countrys experience and know-how in building an efficient e-taxation architecture. Its main emphasis is on how the Korean government managed to make the best use of a wide range of taxpayer information efficiently and securely. It highlights information security and presents three case studies of an institutional framework for using third-party data: tax schemes for credit card usage, a cash receipt system, and e-invoicing. It then lays out a range of policy implications for consideration by tax authorities in the Latin American and Caribbean region.

The exponential growth in the capacity to transmit, store, and process large quantities of data through information and communication technologies is transforming the way in which tax administrations carry out their functions. The tax administrations of Latin American and Caribbean countries are currently making significant efforts to exploit digital technology so as to provide better services, eliminate gaps in compliance and become more efficient. This paper presents a methodology for identifying the gaps between the current state of the regions tax administrations and the digital model that has been evolving in international forums based on successful experiences with a specific focus on Chile. The analytical dimensions considered are the countrys prevailing digital ecosystem, the capacities available to the tax authority, the processes for obtaining data from taxpayers and, finally, outputs in the form of the digital services that these organizations provide. In Chiles favorable digital ecosystem, the Internal Revenue Service, a pioneer in the implementation of electronic invoicing and pre-filled tax returns, has made significant progress, although there is still room for improvement when it comes to data governance.

The electronic invoicing (EI) of taxes is one of Latin America’s contributions to international taxation in support of the fight against evasion, global efforts towards tax transparency, and the digitization of tax administrations (TAs). Initially, EI was conceived as an instrument of documentary control over the invoicing process, so as to avert both the omission of sales and the inclusion of false purchases. The original idea was extended to other areas of tax control, such as payroll, goods in transit, and new services such as factoring. To some extent, EI can be regarded as the start of the process of digitizing the TAs in the broad sense. This publication addresses the pioneering experience of EI in Latin America, from its implementation to its extensions and impact on tax collection.