The Deterrent Effect of Whistleblowing on Tax Collections

Eli Amir, Adi Lazar, Shai Levi*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Many countries use tax-related whistleblowing programs, but the evidence on these programs suggests information provided by whistleblowers yields modest tax collections. However, when every citizen could become a whistleblower, deterrence from tax evasion can by itself increase tax collections. We find that tax collections significantly increased after the introduction of the whistleblowing mechanism in Israel in February 2013, although this mechanism directly yielded little or no tax collections. In support of the hypothesis that deterrence led to the increase in tax collections, we find that collections increased in industries with high tax-evasion risk, but not in industries with low tax-evasion risk. Furthermore, the increase in tax collections occurred in corporations, where the timing and magnitude of tax payments are more discretionary, but not from employees, for whom employers directly deduct taxes. Eventually, following reports that the whistleblowing mechanism is ineffective, deterrence diminished and tax collections decreased, suggesting the deterrence effect was temporary.

Original languageEnglish
Pages (from-to)939-954
Number of pages16
JournalEuropean Accounting Review
Issue number5
StatePublished - 20 Oct 2018


  • deterrence
  • tax evasion
  • whistleblowing


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