Panayiotis Nicolaides

Panayiotis Nicolaides

Director of Research, EU Tax Observatory

EU Tax Observatory

Paris School of Economics

Welcome! I am Director of Research at the EU Tax Observatory, Paris School of Economics. I specialise in public economics and taxation, in particular tax compliance and the empirical analysis of tax policy using administrative data.

My research uses administrative data and utilises discontinuities, exemptions and cut-offs created by policy to provide empirical evidence on economic behaviour and to estimate the effect on government revenue. Topics include novel forms of third-party reporting policy, tax lotteries and VAT incidence. You can find recent papers and ongoing projects in the research section.

The majority of my work is guided closely by policy developments, having spent the first part of my career (2013-2019) managing the Greek economic crisis in Brussels and Athens. Since 2021, I have been working on establishing the EU Tax Observatory in Paris; I direct its scientific programme, coordinate research output and manage relations with external stakeholders. You can find more in the policy section.

Interests
  • Public Economics
  • Taxation
  • Tax Enforcement
  • Applied Microeconomics
Education
  • Dr. rer. pol. (eqv. PhD) Essays on the Economics of Taxation, 2023

    Hertie School, Berlin

  • M.Phil in Economics, 2013

    University of Oxford

  • BA(Hons) in Economics and Economic History, 2011

    University of Manchester

Research

Consumption Taxes and Corporate Income Taxes: Evidence from Place-based VAT

Consumption Taxes and Corporate Income Taxes: Evidence from Place-based VAT

Using a quasi-experimental setting, we document that corporations decrease declared profits and corporate income taxes in response to an increase in the VAT rate. In an attempt to raise tax revenue during the Greek economic crisis, a 16% VAT rate, which existed for historicopolitical reasons in Greek islands, was harmonised to the national 24% rate. We combine tax filings with Orbis and ICAP data that enable us to geolocate corporations and to construct comparable groups based on locations in or out of the preferential rate. Counteracting the reform’s intended effect, declared profits decreased by 28% and corporate income taxes by 34% on a permanent basis. Macroeconomic factors and a fall in reported revenue cannot fully explain this decrease. Pervasive tax evasion in the Greek islands, where corporations might have an opportunity to adjust profits, offers a plausible explanation of the magnitude of responses.

Winning the Tax Lottery: Evidence from a Superdraw on Christmas Eve

Winning the Tax Lottery: Evidence from a Superdraw on Christmas Eve

This paper studies a tax lottery in Greece and documents an increase in VAT revenue. The lottery incentivises the use of electronic payments over cash to fight tax evasion by allocating EUR 1 million in prizes every month. Tickets are awarded automatically when individuals complete retail transactions by electronic means. I exploit a superdraw at the start of the lottery in Christmas Eve 2017; participation was unanticipated and individuals could not influence their winning chances. I estimate that regional VAT revenue increased by 0.01% per additional winner (or by EUR 2,700 compared to a EUR 1,000 winning prize). This effect can be explained through winners, who increased their electronic consumption by 14%. Lasting for five months, this channel alone cannot explain the entire VAT effect. A second channel is documented through spillover effects from winners to non-winners. The lottery’s positive outcome demonstrates the potential of electronic payments to raise tax revenue.

Income Tax Incentives for Electronic Payments: Evidence from Greece’s Electronic Consumption Tax Discount

Income Tax Incentives for Electronic Payments: Evidence from Greece’s Electronic Consumption Tax Discount

How effective are features of the income tax in incentivising a change in behaviour? I study how Greek taxpayers respond to a novel policy, which conditions their personal tax allowance on electronic consumption, requiring specific amounts to be reached during the financial year. Aimed at incentivising a change from cash to electronic payments, the policy includes almost all taxpayers by default, generates monthly electronic spending information and pre-fills the annual amounts spent in tax returns. Using a unique administrative dataset of 50,000 randomly-drawn taxpayers, I document (a) strong responses to the policy during tax filing, with 92% reporting the required amounts to gain the full tax discount, (b) evidence of increased reported amounts if consumption is lower than required, (c) economically and statistically significant electronic consumption responses in some taxpayers as the end-of-year deadline approaches. Adjustment costs in the form of policy inattention, liquidity constraints and low perceived costs of audit can explain the mixed policy outcome. The results suggest that linking incentives to existing features of the income tax system can trigger large responses, but the overall effect depends on adjustment costs in the taxpayer population.

Are Tax Lotteries Regressive? Income, Consumption and, Occupational Characteristics of Winners

Are Tax Lotteries Regressive? Income, Consumption and, Occupational Characteristics of Winners

Tax lotteries can increase tax compliance by providing incentives to consumers to ask for a receipt. Whilst their effectiveness has been studied in economic literature, less is known about their progressivity. Using administrative data from the Greek tax lottery, I analyse the income, consumption and occupational characteristics of winners and I document that high income individuals win more frequently. A 10% increase in taxpayer [spousal] income is associated with a 0.11% [0.6%] increase in the winning probability. Self-employed or business owners record particularly large amounts of transactions and receive a large number of lottery tickets, which indicates either under-reporting of income or the channeling business expenditure through personal bank accounts. They exhibit 18% higher winning probability than other occupational categories. Using Monte Carlo simulations, I explore reforms for tax lottery design and I find that a monthly ticket ceiling per individual improves prize allocation and progressivity. Additional results with economic significance are (i) imperfect income sharing within household (ii) a marginal propensity to consume at 0.18.

Policy

Global Tax Evasion Report 2024 (with Annette Alstadsæter, Sarah Godar and Gabriel Zucman)
Over the last 10 years, governments have launched major initiatives to reduce international tax evasion. Yet despite the importance of these developments, little is known about the effects of these new policies. Is global tax evasion falling or rising? Are new issues emerging, and if so, what are they? This report addresses these questions thanks to an unprecedented international research collaboration building on the work of more than 100 researchers globally.
EU Tax Observatory
The EU Tax Observatory is an independent research laboratory hosted at the Paris School of Economics. It conducts innovative research on taxation, contributes to a democratic and inclusive debate on the future of taxation, and fosters a dialogue between the scientific community, civil society, and policymakers in the European Union and worldwide. I have been part of its inaugural team since February 2021, setting it up, directing its research programme and managing contacts with external stakeholders. We have established the Observatory as the leading reference point for tax evasion and tax avoidance research in the EU.
Proposal for a European Asset Registry (with Theresa Neef, Lucas Chancel, Thomas Piketty and Gabriel Zucman)
This note provides data on wealth inequality in Russia and advocates for a European Asset Registry. Russia exhibits the highest wealth inequality in Europe. Further, Russia’s wealthiest nationals conceal a large share of their wealth through tax havens. The current architecture of the global financial system impedes comprehensive knowledge on beneficial ownership across asset types and jurisdictions. Under the roof of a European Asset Registry, the already existing but currently dispersed information could be gathered. This would change the state of play, resulting in better-targeted sanctions and effective tools to curb money laundering, corruption and tax evasion. The European Union could have a pioneering role in taking the next step towards more financial transparency
Greek Economic Crisis
From 2014 to 2019 I worked on the Greek economic crisis, having served as Alternate Member to the Eurogroup Working Group for 3 years and having prepared about 30 Eurogroup/ECOFIN and 4 Euro Summit meetings. I oversaw the successful implementation of Greece’s 3rd economic adjustment programme, contributed to the stabilisation of the economy and led the technical part of the debt relief negotiations, which resulted in substantial restructuring of the Greek public debt in August 2018. Picture from informal EuroWorking Group at Lake Bled, Slovenia on 9 June 2017 - an important meeting in completing the Greek economic adjustment programme and stabilising the public debt.
Greek Economic Crisis
Oxygono (European Citizen’s Prize 2022)
Oxygono is a non-governmental non-profit organisation established in 2014 and is headquartered in Cyprus, consisting of individuals from a range of backgrounds including academics, social, political, and professional sectors. It aims to improve the quality of public debate in Cyprus and consequently the achievement of reforms and modernization of our country to improve the quality of life of citizens in all aspects of public life - such as health, economy, education, justice, and foreign policy, research and entrepreneurship. I was one of the founding members of the organisation, serving in its Executive Committee since 2014. We organise a range of events every year, including the Cyprus Forum.

Recent & Upcoming Talks

IEB Seminar: Electronic Payments Lottery and Tax Revenue: Evidence from a Natural Experiment in Greece
Uncovering Hidden Wealth – Ways to Stop Offshore Secrecy