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on Accounting and Auditing |
| By: | Seth E. Terkper |
| Abstract: | The paper discusses the improvements which a semi-autonomous revenue agency (SARA) must make to its records to meet fiscal and financial accounting obligations. SARAs are legal entities, such as a service or a department, which are required to prepare accrual records that may diverge from a treasury's cash accounting records. Their records reflect revenues generated; budget funds for generating the revenues; and material programs administered for other agencies. The accounting records and financial statements (income statement, balance sheet and cash flow statement) must conform to generally-accepted accounting principles (GAAPs) or standards such as the International Public Sector Accounting Standards (IPSAS) of the International Federation of Accountants (IFAC)-and to the treatment of operating, investment and financing activities in the Government Finance Statistics (GFS) Manual. |
| Keywords: | Working Paper , Government accounting , Developing countries , Tax revenues , Tax administration , Fiscal transparency , Public finance , Public sector , |
| Date: | 2008–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:08/116&r=acc |
| By: | Judith Freedman (University of Oxford); Graeme Macdonald (University of Kent) |
| Abstract: | The European Commission is working on a proposal for a Common Consolidated Corporate Tax Base (CCCTB). A draft Directive is expected to be published during the course of 2008. The proposal aims to tackle some fundamental problems encountered as a result of lack of corporate tax harmonisation, especially in the areas of cross border losses and transfer pricing. There are several difficulties that must be tackled to make the proposal workable, not least the question of formulary apportionment of the consolidated profits of the corporate group as between Member States. This paper does not attempt to discuss the entire range of issues to which the CCCTB gives rise, important though they are, but focuses on the question of the tax base itself. The CCCTB project presents an opportunity to rethink the tax base. For the purposes of this paper it is assumed that there will be no radical re-appraisal of the way in which we tax corporations for the time being, but that the tax base will continue to be based on a concept of ‘profit’. This paper supports the use of International Financial Reporting Standards (IFRS) as a starting point in ascertaining profit. It acknowledges that some deviations will be necessary from IFRS for tax purposes and suggests that these deviations should be explicit and based on autonomous tax principles. Partial convergence gives rise to issues about the relationship between accounting and tax principles. Conceptual clarity is needed to manage the questions that will arise and appropriate institutional mechanisms need to be developed to deal with the task of interpretation and regulation of the evolving relationship between accounting developments and tax law. If the CCCTB is to be successful it must provide a comprehensive and autonomous set of rules. In fact it must be a Comprehensive Common Consolidated Corporate Tax Base (CCCCTB or C4TB) In view of the complexity of the issues arising in creating and applying the rules for a tax base, it is impossible to produce a Directive that will cover every necessary detail. Instead it needs to refer to IFRS as at the date of the Directive and to contain a set of tax principles as well as setting out institutional arrangements capable of managing the relationship. National tax law and national accounting standards are an inappropriate default for a C4TB. Thus the Directive should provide both a reference point for determining the scope of the tax base and a constitutionally valid framework for interpretation and application of the Directive and its implementing legislation in Member States. |
| Keywords: | CCCTB, Tax Base, Principles |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:btx:wpaper:0807&r=acc |
| By: | Richard M. Bird (University of Toronto); Michael Smart (University of Toronto) |
| Abstract: | Over a decade ago, several Canadian provinces replaced their retail sales taxes by value-added taxes. This paper estimates the effects of this tax substitution on business investment in the reforming provinces. Consistent with theory, we find that the reform led to significant increases in machinery and equipment investment, in the short run at least. This evidence suggests that a similar reform in a US state with similar retail sales taxes may also be expected to result in increases, possibly substantial, in capital stocks. |
| Keywords: | sales tax, value-added tax, investment |
| JEL: | H22 H25 H71 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:iibwps:15&r=acc |
| By: | Brigitte Unger; Killian McCarthy; Frederik van Doorn |
| Abstract: | This paper surveys the literature on tax competition, and uses it to analyse current European proposals to harmonise corporate tax rates. It begins, in the course of Section One, by introducing the phenomenon of international tax competition, and illustrates, with the use of secondary research, the reality of the regulatory "race to the bottom". Section Two, however, demonstrates the harmful consequences of tax competition - with reference to the immobile factors of production - and makes obvious the necessity of effective intervention. Section Three then introduces and evaluates the calibre of the current proposals to tackle tax competition through collusion and harmonisation, and concludes negatively in the process. As illustrated in this discussion, any efforts to harmonise corporate taxes above the international equilibrium will not only fail to solve the problem at hand, but will exacerbate them, and may even serve to undermine and destabilise the political Union. Section Four then introduce an alternative solution to the problem - in the form of the residence principle - and Section Five concludes. |
| Keywords: | International Competition, Europe, Public Finance, Taxation, Regulation |
| JEL: | E62 E65 F41 F42 H26 H87 O52 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:use:tkiwps:0813&r=acc |
| By: | Hirshleifer, David; Teoh, Siew Hong |
| Abstract: | Prevailing models of capital markets capture a limited form of social influence and information transmission, in which the beliefs and behavior of an investor affects others only through market price, information transmission and processing is simple (without thoughts and feelings), and there is no localization in the influence of an investor on others. In reality, individuals often process verbal arguments obtained in conversation or from media presentations, and observe the behavior of others. We review here evidence concerning how these activities cause beliefs and behaviors to spread, affect financial decisions, and affect market prices; and theoretical models of social influence and its effects on capital markets. Social influence is central to how information and investor sentiment are transmitted, so thought and behavior contagion should be incorporated into the theory of capital markets. |
| Keywords: | capital markets; thought contagion; behavioral contagion; herd behavior; information cascades; social learning; investor psychology; accounting regulation; disclosure policy; behavioral finance; market efficiency; popular models; memes |
| JEL: | M41 D83 Z13 G0 D85 |
| Date: | 2008–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9142&r=acc |
| By: | Hirshleifer, David; Teoh, Siew Hong |
| Abstract: | Prevailing models of capital markets capture a limited form of social influence and information transmission, in which the beliefs and behavior of an investor affects others only through market price, information transmission and processing is simple (without thoughts and feelings), and there is no localization in the influence of an investor on others. In reality, individuals often process verbal arguments obtained in conversation or from media presentations, and observe the behavior of others. We review here evidence concerning how these activities cause beliefs and behaviors to spread, affect financial decisions, and affect market prices; and theoretical models of social influence and its effects on capital markets. Social influence is central to how information and investor sentiment are transmitted, so thought and behavior contagion should be incorporated into the theory of capital markets. |
| Keywords: | capital markets; thought contagion; behavioral contagion; herd behavior; information cascades; social learning; investor psychology; accounting regulation; disclosure policy; behavioral finance; market efficiency; popular models; memes |
| JEL: | M41 D83 Z13 G0 D85 |
| Date: | 2008–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:9164&r=acc |