This article incorporates tax evasion and sales tax rebates to consumers into Ramsey�s optimal taxation problem. Consumers may act as tax enforcers by requesting sales receipts, forcing firms to remit taxes to the government. Consumer auditing is costly, and the government offers buyers a tax rebate. This policy modifies the traditional �Ramsey equation� due to a non-trivial income effect. We show that tax enforcement policies affect buyers� allocations directly via the standard changes in the good�s price. We characterize the planner�s policy trade-off when choosing alternative enforcement instruments. We illustrate numerically the relevance of the individuals�
auditing and firms� concealment technologies for the determination of optimal policies and show that the economy�s welfare is higher when the government has two auditing policies at its disposal vis-a` -vis direct auditing only.