nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2013‒01‒19
twelve papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Peoples' views of taxation in Africa: A review of research on determinants of tax compliance By Odd-Helge Fjeldstad; Collette Schulz-Herzenberg; Ingrid Hoem Sjursen
  2. Property Tax System in India: Problems and Prospects of Reform. By M. Govinda Rao
  3. From tax evasion to tax planning By Arnaud Bourgain; Patrice Pieretti; Skerdilajda Zanaj
  4. The fiscal and distributional impact of possible tax reforms in the Netherlands By Vos, Klaas de
  5. Improving Work Incentives: Evaluation of Tax Policy Reform Using SRMOD By RanÄ‘elovicÌ, SasÌŒa; RakicÌ, Jelena ZÌŒarkovicÌ
  6. Non-linear dividend tax and dynamics of the firm By Seppo Kari; Jussi Laitila
  7. Analysis on Conflicts of China’s Coal Tax Reform By Wang, Dong
  8. Capital gains taxation and the cost of capital: evidence from unanticipated cross-border transfers of tax bases By Harry Huizinga; Johannes Voget; Wolf Wagner
  9. Assessing changes of the Hungarian tax and transfer system: A general-equilibrium microsimulation approach By Péter Benczúr; Gábor Kátay; Áron Kiss
  10. A boost in the paycheck: survey evidence on workers’ response to the 2011 payroll tax cuts By Grant Graziani; Wilbert van der Klaauw; Basit Zafar
  11. Cyclically adjusted local government balances By Eugenia Panicara; Massimiliano Rigon; Gian Maria Tomat
  12. Joint macro/micro evaluations of accrued-to-date pension liabilities: an application to French reforms By D. BLANCHET; S. LE MINEZ

  1. By: Odd-Helge Fjeldstad; Collette Schulz-Herzenberg; Ingrid Hoem Sjursen
    Abstract: What are the key determinants of taxpayer compliance? And which features of citizen-state relations govern attitudes and behaviour regarding taxation? This paper examines the analytical foundation, methodological approaches and key findings of available empirical literature on taxpayer behaviour in Africa. Understanding how citizens perceive and experience taxation may provide an essential diagnostic of the political realities for tax reform. Attempts to broaden the tax base require insights into how citizens experience and perceive the tax system, whether people perceive they are paying taxes or not, what they eventually pay, their views on tax administration and enforcement, and whether and how their tax behaviour is correlated with how they perceive the state. Attitude and perception surveys of current and potential taxpayers may also help to identify perceived weaknesses of the tax system, and enable tax authorities to focus attention efficiently on high-risk categories of taxpayers.
    Keywords: Taxation, Tax behaviour, Compliance, Evasion, Fiscal exchange, Surveys
    Date: 2012
  2. By: M. Govinda Rao (National Institute of Public Finance and Policy)
    Date: 2013–01
  3. By: Arnaud Bourgain (CREA, University of Luxembourg); Patrice Pieretti (CREA, University of Luxembourg); Skerdilajda Zanaj (CREA, University of Luxembourg)
    Abstract: The aim of this paper is to analyze within a simple model how a re- moval of bank secrecy can impact tax revenues and banks' profitability assuming that offshore centers are able to offer sophisticated but legal or not easily detectable tax planning. Two alternative regimes are considered. A first in which there is strict bank secrecy and a second where there is international information exchange for tax purposes. We show in particular that sharing tax information with onshore coun- tries can be a dominant strategy for an OFC if there is enough scope for providing tax planning. Moreover, a partial reduction of tax lia- bilities can already prompt OFCs to voluntarily exchange relevant tax information. We also highlight a surprising result. The possible re- moval of bank secrecy may, under some conditions, reduce the onshore country's tax revenue.
    Keywords: offshore centers, tax planning, tax evasion
    JEL: F21 H26 H87
    Date: 2012
  4. By: Vos, Klaas de
    Abstract: This paper uses the tax-benefit microsimulation model EUROMOD to assess how three types of tax reform would affect the state budget and the income distribution in the Netherlands. After briefly introducing the Dutch tax system and the case for and against these reforms, we investigate the effects of (1) introducing a flat income tax rate, (2) reducing the mortgage interest deduction and (3) shifting the state pension contribution to income tax, and of combining these reforms. Notably, the analysis does not include possible effects of these reforms on, e.g., the labour market and/or the housing market, but assesses the ceteris paribus effects of the reforms on the state budget and on poverty and inequality.Depending on the choice of the various parameters of the reforms both the budgetary and the distributional effects may vary widely. We show that the budget deficit may increase or decrease in combination with both increases and decreases in inequality and poverty. So, an optimal tax reform could be chosen depending on the preferences with respect to the budget and the income distribution.
    Date: 2012–12–18
  5. By: RanÄ‘elovicÌ, SasÌŒa; RakicÌ, Jelena ZÌŒarkovicÌ
    Abstract: Inactivity and unemployment rates as well as informal employment rates in Serbia are particularly high among low-paid labor. Labour tax wedge is average at higher wage levels, but high at lower wage levels. The relatively high labour tax burden for low-paid employees is due to several reasons. The most important one is the existence of mandatory minimum base for social security contribution (SSC). This paper uses the tax and benefit micro-simulation model for Serbia (SRMOD), which is based upon EUROMOD platform, in order to evaluate the effects of the abolishment of mandatory minimum SSC base on labour supply incentives. We found that this policy reform would reduce effective average tax rates by more than it would reduce marginal tax rates implying a larger participation response than hours-of-work response. A decrease in both tax rates is most pronounced for lower income groups.
    Date: 2012–12–20
  6. By: Seppo Kari; Jussi Laitila
    Abstract: This paper analyses the implications of a non-linear dividend tax in a life-cycle model of the firm. In the model new firms first enter markets, then grow, financing from retained earnings and finally distribute their profits in the steady state. We find that under a non-linear tax the owners prefer a smooth flow of dividends, which encourages the firms to start distributions right from the beginning. This slows down investments and leads to delayed growth of production. There is, however, an opposing effect resulting from an increase in the start-up size of the firm, which speeds growth. Simulations nevertheless show that a revenue-neutral switch from a linear to a progressive tax exacerbates production losses. We further find that this distortion can be substantially reduced by carrying forward unused tax allowances with interest.
    Keywords: dividend tax, progressive tax, nucleus theory, firm behavior
    JEL: H32 H24 G35
    Date: 2012–12–07
  7. By: Wang, Dong
    Abstract: This paper investigates the conflicts which are resulted from coal tax reform in China from economic and public policy perspectives. An analytical framework involving actors, values, interests and institution has been applied. China’s central government eagers to achieve fiscal revenue increase, environmental protection and energy conversation goals by a good governance of coal system. As a traditional and feasible policy instrument, taxation is regarded for dealing with energy issues in politics and governance. However, coal tax reform proposal has induced many controversies in China. The causes of that include value conflicts of all actors, competing interests of all parties and institutional barriers of economic, politics and legislation. Therefore, the government cannot regulate coal issues only through taxation. The case reveals that good governance on coal cannot be achieved only by economic tools as the coal system contains so high stake and involves so many players.
    Keywords: energy tax; coal tax regime; policy instrument; energy conflicts
    JEL: Q38 Q32 H20 Q48
    Date: 2012–10–23
  8. By: Harry Huizinga (CentER and EBC, Tilburg University and CEPR); Johannes Voget; Wolf Wagner (CentER and EBC, Tilburg University, Duisenberg School of Finance)
    Abstract: In a cross-border takeover, the tax base associated with future capital gains is transferred from target shareholders to acquirer shareholders. Crosscountry differences in capital gains tax rates enable us to estimate the discount in target valuation on account of future capital gains. A one percentage point increase in the capital gains tax rate reduces the value of equity by 0.225%. The implied average effective tax rate on capital gains is 7% and it raises the cost of capital by 5.3% of its no-tax level. This indicates that capital gains taxation is a significant cost to firms when issuing new equity.
    Keywords: Capital gains taxation, Cost of capital, International takeovers, Takeover premium
    JEL: G32 G34 H25
    Date: 2012
  9. By: Péter Benczúr (Magyar Nemzeti Bank (central bank of Hungary)); Gábor Kátay (Magyar Nemzeti Bank (central bank of Hungary)); Áron Kiss (Magyar Nemzeti Bank (central bank of Hungary))
    Abstract: We present a new general-equilibrium behavioural microsimulation model designed to assess long-run macroeconomic and fiscal consequences of reforms to the tax and transfer system. General-equilibrium feedback effects are simulated by embedding microsimulation in a parsimonious macro model of a small open economy. We estimate and calibrate the model to Hungary, and then perform three sets of simulations. The first one explores the impact of personal income tax rate reductions which are identical in cost but different in structure. The second one compares three different tax shift scenarios, while the third one evaluates actual policy measures between 2008 and 2013. The results suggest that while a cut in the marginal tax rate of high-income individuals may boost output, it does not have a significant employment effect. On the other hand, programs like the Employee Tax Credit do have a significant employment effect. We find that policy measures since 2008 substantially increase income inequality in the long run; the contribution of the changes after 2010 are about three times that of the changes before 2010. Our results highlight that taking account of household heterogeneity is crucial in the analysis of the macroeconomic effects of tax and transfer reforms.
    Keywords: behavioural microsimulation, linked micro macro model, tax system, transfers
    JEL: H22 H31 C63
    Date: 2012
  10. By: Grant Graziani; Wilbert van der Klaauw; Basit Zafar
    Abstract: This paper presents new survey evidence on workers’ response to the 2011 payroll tax cuts. While workers intended to spend 10 to 18 percent of their tax-cut income, they reported actually spending 28 to 43 percent of the funds. This is higher than estimates from studies of recent tax cuts, and arguably a consequence of the design of the 2011 tax cuts. The shift to greater consumption than intended is largely unexplained by present-bias or unanticipated shocks, and is likely a consequence of mental accounting. We also use data from a complementary survey to understand the heterogeneous tax-cut response.
    Keywords: Wages ; Income tax ; Consumption (Economics) ; Consumer behavior
    Date: 2013
  11. By: Eugenia Panicara (Banca d'Italia); Massimiliano Rigon (Banca d'Italia); Gian Maria Tomat (Banca d'Italia)
    Abstract: The paper provides an analysis of cyclically-adjusted budget balances of local governments in Italy for the period 2002-07. We find that local government balances appear to be relatively sensitive to the business cycle. In particular, a shock of 1 per cent in GDP changes their resources by approximately 0.6 billion. Within the sample period, both central and local policies concerning local government budgets had a sizeable impact on local government balances in cyclically-adjusted terms.
    Keywords: local public finance, budget sensitivity, business cycle, tax elasticity
    JEL: E32 E62 H71
    Date: 2012–12
  12. By: D. BLANCHET (Insee); S. LE MINEZ (Insee)
    Abstract: Accrued-to-date liabilities (ADLs) could soon add to the set of regular statistics on public pensions, in compliance with updated SNA provisions. This raises two questions: how can this indicator be produced, and what for? Microsimulation is shown to constitute a relevant answer to the first question. Despite its stochastic nature, it displays results that seem stable enough for accounting purposes. Concerning the what for question, it is well-known that ADLs are not an indicator of global financial sustainability. Their message is more interesting from the household perspective and especially at the micro level. This fosters the case for microsimulation that automatically produces consistent micro/macro results. All these macro and micro properties are illustrated in the French case, with applications to the assessment of the successive 1993, 2003 and 2010 reforms that have modified entitlements in rather complex ways, differentiated across cohorts and skill levels.
    Keywords: Accrued-to-date liabilities, microsimulation, pension reforms
    JEL: C53 H55 J26
    Date: 2012

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