nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2007‒09‒16
four papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Forensic Accounting: Hidden balance of payments of the Philippines By Beja, Jr., Edsel
  2. The Value-Added Tax: Its Causes and Consequences By Ben Lockwood; Michael Keen
  3. VAT, Tariffs, and Withholding: Border Taxes and Informality in Developing Countries By Michael Keen
  4. Repercussions of firm size definition on empirical results for firm efficiency and financing research By Alfonso, Galindo Lucas

  1. By: Beja, Jr., Edsel
    Abstract: An examination of the available data between 1990 and 2005 reveals that the balance of payments of the Philippines does not record large amounts of international transactions. Unrecorded international transactions for the 16-year period amount to US$ 192 billion (in 1995 prices). The results suggest a serious problem in the government’s macroeconomic management of the Philippines, and expose a weak or weakening capacity in the governance of international transactions.
    Keywords: Balance of Payments; Capital Flight; Trade Misinvoicing; Other Unrecorded Transactions; Philippines
    JEL: F40 B50 O53 C82 B40
    Date: 2006–11–25
  2. By: Ben Lockwood; Michael Keen
    Abstract: Has the VAT proved, as its proponents claim, an especially effective form of taxation? To address this, this paper first shows that a tax innovation-such as the introduction of a VAT- reduces the marginal cost of public funds if and only if it also leads an optimizing government to increase the tax ratio. This leads to the estimation, on a large panel, of a system of equations describing the probability of VAT adoption and the revenue impact of the VAT. The sign of the revenue impact is generally ambiguous, but most countries that have adopted a VAT seem to have gained a more effective tax instrument in doing so.
    Date: 2007–07–24
  3. By: Michael Keen
    Abstract: This paper explores the implications of a distinctive feature of the value added tax (VAT) that is stressed by practitioners but essentially ignored by theorists: that it functions, in part, as a tax on the purchases of informal operators from formal sector businesses and, not least, on their imports. It stresses too the potential importance of the creditable withholding taxes that are levied by many developing countries-which have also been ignored. If both of these instruments are optimally deployed, it is shown, then the usual prescription that a small economy should not deploy tariffs remains valid even in the presence of an informal sector; and indeed a simple strategy is established-generalizing the standard prescription developed in models without informality-for deploying these instruments so as to preserve government revenue and increase welfare in the face of efficiency-improving tariff cuts. Conditions are established under which a VAT alone is fully optimal, precisely because it is in part a tax on informal sector production. But they are restrictive: more generally, an efficient tax structure requires deploying both a VAT and withholding taxes.
    Date: 2007–07–19
  4. By: Alfonso, Galindo Lucas
    Abstract: A huge number of quantitative and qualitative criteria perform the research practice and legal issuing on firm size and firm-size-related measures. Inside each of those criteria, quantitative boundaries between two firm categories have also been diverse, even arbitrary. This approach to firm size concept finds out a convergence among variables —assets, market share, labour cost— with activity segment remarks (where both a traditional division and a original proposal have been used). It is demonstrated that previous founding on industry-size relations —as well as profitability or financial structure measurements— clearly depend on firm size and industry (explicative variables) definitions and also on depending variables definitions (mainly profitability).
    Keywords: Firm Size definition; Industry sector definition; factorial analysis; efficiency results; financing results.
    JEL: M00 K29 M40 E19 M2 C10
    Date: 2006–10–05

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