Events
Seminar
Minimising Selection Failure and Measuring Tax Gap: An empirical model
Speaker
Dr. Sudhanshu Kumar, Assistant Professor, NIPFP, New DelhiEvent date
सोम, 11 मईVenue
NIPFP AuditoriumAbstract
This paper presents an empirical model for minimising selection failure by the tax departments in selecting cases for scrutiny assessment. This model also provides a new methodology for estimating tax gap from limited information that the department collects on a regular basis through scrutiny assessments. Using a maximum-likelihood procedure that corrects for sample selection bias, and the data on the scrutiny assessment exercise carried out by the income tax department, we estimate the model which relates the probability and extent of underreporting to various inputs provided by the tax filer. The estimated model provides a mechanism to analyze the trade-off between the two types of cases of failure- wrong selection of a case and failure to take up the potential under reporter.