The impact of terrorism on tax enforcement effectiveness: a case study of the Basque Country and Navarre

Luca Salvadori *

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This paper analyses the impact of terrorism on tax enforcement effectiveness by focusing on the case of the Basque Country and Navarre. The reduced-form model shows that terrorism negatively affects tax enforcement set by the regional administration and, consequently, the way it is perceived by residents in this area. These results are tested by using Spanish surveys and other data sources, finding evidence of the negative impact of terrorism on tax enforcement as it is perceived by residents in the Basque Country and Navarre. In particular, this effect is stronger for entrepreneurs and liberal professionals. Instead, no significant impact for individuals resident in the rest of Spain is found.
Original languageEnglish
Pages (from-to)1425-1441
Number of pages40
JournalRegional studies
Volume54
Issue number10
DOIs
Publication statusPublished - 13 Feb 2020

Keywords

  • Tax enforcement
  • Audit perception
  • Fiscal externalities
  • Terrorism

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