MANKIW: PRINCIPLES OF MICROECONOMICS
8th Edition
ISBN: 9781337801775
Author: Mankiw
Publisher: CENGAGE L
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Chapter 11.2, Problem 2QQ
To determine
The problem of free-rider.
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Discuss the preferred deterrent method employed by the Zambian government to combat tax evasion, monetary fines. As noted in the reading the potential penalty for corporate tax evasion is a fine of 52.5% of the amount evaded plus interest assessed at 5% annually along with a possibility of jail time. In general, monetary fines as a deterrent are preferred to blacklisting of company directors, revoking business operation licenses, or calling for prison sentences. Do you agree with this preference? Should companies that are guilty of tax evasion face something more severe than a monetary fine? Something less severe? Should the fine and interest amount be set at a different rate? If so at why? Provide support and rationale for your responses.
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MANKIW: PRINCIPLES OF MICROECONOMICS
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