Data for: Political Connections and Firms’ Tax Behavior: Evidence from Kazakhstan

This dataset supports research on how political connections to regional parliamentarians influence firm tax behavior in Kazakhstan. The central hypothesis is that firms acquiring political connections through the March 2023 regional maslikhat elections will exhibit systematically different tax payment behavior compared to observationally similar non-connected firms, with effects potentially varying by connection level (regional vs. national MPs).
The dataset covers 2017–2024 and includes tax payment records for 806 firms: 325 politically connected and 481 matched controls. Political connections were identified from biographical records of 643 newly elected MPs across all 20 administrative regions of Kazakhstan. A firm was classified as connected if an elected MP held a position, ownership stake, or managerial role in the firm for at least one year preceding 2023. Firms with pre-existing connections to MPs from 2016 or 2021 elections were excluded. MPs also holding national mandates were coded separately.
Outcome variables are annual corporate tax payments (excluding VAT) and payroll taxes sourced from adata.kz, which publishes firm-level records from Kazakhstan's State Revenue Committee. Firm characteristics (size, age, industry, region) come from the Bureau of National Statistics Enterprise Statistical Register.
Key findings show that firms connected only to regional MPs increased corporate tax payments by approximately 52% and payroll taxes by 79% post-election, consistent with the "grabbing hand" hypothesis. Firms connected to national MPs showed no significant tax changes, suggesting compensatory benefits at higher governance levels.