Does going cashless make you tax-rich? Evidence from India’s demonetization experiment

This paper investigates the tax compliance effects of India’s demonetization policy, which limited cash availability for a short period time. Using administrative data on firms’ returns and variation in strength shock across local areas, we find that increased sales reported to authorities payments. Investigating mechanisms, show led large increase use electronic forms We argue this likely strengthened authorities’ capacity observe liabilities enforce compliance.