B2-[Rocha et al 2017] - Do-Lower-Taxes-Reduce-Informality-Evidences-from-Brazil
ANALYSIS OF ARTICLE Article B2 analyzes the period of 2009-2012 for the introduction of the MEI program in Brazil. Since then, the number of registered firms has grown from ~2.6M MEI firms in 2012 to ~11M firms in 2021. Article B1 shows data from 2009-2015, and present results that show that both (1) reduction of entry cost and (2) reduction of ongoing taxes have impact on MEI growth, while this article B2 with data from 2009-2012 shows that only (2) happens. New data from MEI from 2019 may provide subsidy for further investigation on the application of the policy. SUMMARY OF ARTICLE Section 1 (Introduction) – Paper aims to analyze the effects of reducing ongoing formality costs to a firm by estimating the impact of a large-scale program in Brazil called MEI (Individual Micro-Entrepreneur Program – IMP), introduced in 2009. Exogeneity comes from a pre-existing tax framework for micro, small and medium enterprises. Identification hypothesis comes from no indi...