Measuring the performance of Chile's tax administration

Abstract

- The purpose of this paper is to measure the effectiveness of Chile’s Internal Revenue Service (SII). We assume that its goal is to achieve maximum compliance from taxpayers while minimizing compliance costs. Sample taxpayer surveys and statistical data both show that SII service standards—a proxy for compliance costs—improved during the 1990s. Compliance rates also increased significantly in the same period. Regression analysis, however, suggests that this is largely explained by the country’s strong economic growth during the decade. Our preferred performance indicator— the degree to which observed compliance falls short of its maximum achievable level—displays no change