Template-Type: ReDIF-Paper 1.0

Author-Name: Gábor Lovics
Author-X-Name-First: Gábor
Author-X-Name-Last: Lovics
Author-Email: gabor.lovics@ksh.hu
Author-Workplace-Name: Központi Statisztikai Hivatal (Hungarian Central Statistical Office)

Author-Name: Katalin Szőke
Author-X-Name-First: Katalin
Author-X-Name-Last: Szőke
Author-Email: szokek@mnb.hu
Author-Workplace-Name: Magyar Nemzeti Bank (Central Bank of Hungary)

Author-Name: Csaba G. Tóth
Author-X-Name-First: Csaba G.
Author-X-Name-Last: Tóth
Author-Email: toth@demografia.hu
Author-Workplace-Name: KSH Népességtudományi Kutatóintézet (Hungarian Demographic Research Institute)

Author-Name: Bálint Ván
Author-X-Name-First: Bálint
Author-X-Name-Last: Ván
Author-Email: balint.van@pm.gov.hu 
Author-Workplace-Name: Pénzügyminisztérium (Ministry of Finance)

Title: The Effect of the Introduction of Online Cash Registers on Reported Turnover in Hungary


Abstract: In order to reduce the shadow economy, in 2013 and 2014 the Hungarian government introduced mandatory online cash registers (OCR) in some sectors. As a result, almost 200,000 OCRs have been installed by 100,000 enterprises. In this paper we use micro data to estimate the effect of OCR introduction on reported turnover in the most affected sectors: retail, and accommodation and food services (AFS). We assume that OCR installation does not change a company’s operating model, so the increase in reported turnover around the installation date reflects a reduction in the shadow economy. We identify a remarkable effect of OCR introduction on reported turnover in both sectors. For small enterprises, reported turnover increased by 23 percent and 35.1 percent in the retail and AFS sector, respectively. We also find significant but smaller effects for medium-sized enterprises in both sectors. For large companies, we only observe a significant impact in the AFS sector.


Length: 24 pages
Creation-Date: 2019
File-URL: https://www.mnb.hu/letoltes/mnb-op-137-final-1.pdf
File-Format: Application/pdf
Number: 2019/137
Classification-JEL: E26, H25, H26
Keywords: Value Added Tax, Tax Evasion, Shadow Economy
Handle: RePEc:mnb:opaper:2019/137