Christopher Hoy (World Bank), Filip Jolevski (George Mason), and Anthony Obeyesekere (World Bank) have posted “Revealing Tax Evasion: Experimental Evidence from a Representative Survey of Indonesian Firms” on SSRN. Here is the abstract:

Measuring tax evasion by firms is notoriously difficult: direct questions yield biased responses while administrative data captures only detected violations. This paper examines the pervasiveness of tax evasion in Indonesia and the characteristics associated with non-compliance through a randomized, double-list experiment embedded in a nationally representative survey of 2,955 registered firms that preserves anonymity. The results reveal that around a quarter of firms indirectly admit to evading tax, which is equivalent to a revenue loss of two percent of GDP.  Firms that do not export, face informal sector competition, and believe tax administration is a major obstacle are the most likely to evade taxes. These findings help inform tax authorities, which face substantial challenges in estimating levels of tax evasion and identifying non-compliant taxpayers. This study provides the first validation that double-list experiments reliably measure sensitive organizational behaviors and offers representative estimates of firm tax evasion in a major middle-income country.