nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2013‒11‒29
nine papers chosen by
Alexander Harin
Modern University for the Humanities

  1. The impact of the 2009 value added tax reform on enterprise investment and employment : Empirical analysis based on Chinese tax survey data By Wang, Dehua
  2. Taxation and Corporate Debt: Are Banks any Different? By Jost Heckemeyer; Ruud A. de Mooij
  3. United Kingdom: Technical Assistance Report—Assessment of HMRC’s Tax Gap Analysis By International Monetary Fund. Fiscal Affairs Dept.
  4. Tax Principles and Coordination of Trade and Domestic Policies under Imperfect Competition By Kenji Fujiwara
  5. FDI and investment barriers in developing economies By Arita, Shawn; Tanaka, Kiyoyasu
  6. Fiscal Consolidations and Public Debt in Europe By Gianluca Cafiso; Roberto Cellini
  7. Income distribution and current account: A sectoral perspective By Jan Behringer; Till van Treeck
  8. Green taxation in Italy: an assessment of a carbon tax on transport By Federico Cingano; Ivan Faiella
  9. Politiques de R&D, Taxe Carbone et Paradoxe Vert By Grimaud, André; Neubauer, Mauricio; Rougé, Luc

  1. By: Wang, Dehua (National Academy of Economic Strategy, Chinese Academy of Social Sciences)
    Abstract: This paper uses the "National Tax Survey" enterprise data to assess the impact of China's nationwide VAT reform of 2009 on enterprise fixed-asset investment and employment. The main finding of our research is that the reform significantly increased business investment in fixed assets, but had no obvious effect on employment. Furthermore, the reform promoted corporate investment mainly by encouraging machinery and equipment, but not plant and building investment.
    Keywords: Value-added tax reform, investment in fixed assets, employment
    JEL: H22 H25
    Date: 2013
  2. By: Jost Heckemeyer; Ruud A. de Mooij
    Abstract: This paper explores whether corporate tax bias toward debt finance differs between banks and nonbanks, using a large panel of micro data. On average, it finds that there is no significant difference. The marginal tax effect for both banks and non-banks is close to 0.2. However, the responsiveness differs considerably across the size distribution and the conditional leverage distribution. For nonbanks, we find a U-shaped relationship between asset size and tax responsiveness, although this pattern does not hold universally across the conditional leverage distribution. For banks, in contrast, the tax responsiveness declines linearly in asset size. Quantile regressions show further that capitaltight banks are significantly less responsive than are capital-abundant banks; the same pattern holds for the largest non-banks. Still, even the largest banks with high conditional leverage ratios feature a significant, positive tax response.
    Keywords: Taxation;Corporate sector;Debt;Corporate taxes;Banks;Nonbank financial sector;Corporate tax; debt bias; leverage; banks; non-financial firms; quantile regressions
    Date: 2013–10–29
  3. By: International Monetary Fund. Fiscal Affairs Dept.
    Abstract: This report assesses HMRC’s tax gap analysis program and provides advice and guidance on further improving it. The report addresses three aspects of the program: (1) the models and methodologies employed; (2) the approach to disseminating the results; and (3) the use of the results in supporting compliance activities, evaluating tax revenue performance across taxes and the effectiveness of HMRC. The report also raises some areas of possible further research.
    Keywords: Taxes;Indirect taxation;Tax administration;Tax collection;Technical Assistance;United Kingdom;
    Date: 2013–10–22
  4. By: Kenji Fujiwara (School of Economics, Kwansei Gakuin University)
    Abstract: We construct an exporting monopoly model to compare destination- and origin-based commodity taxes in a context of a trade and domestic tax reform. We show that an export tax reduction and a change in destination (resp. origin) tax that fix the world price is strictly Pareto-improving (resp. deteriorating), which holds whether markets are integrated or segmented. This result may provide a new rationale for preferring the destination-based consumption tax to the origin-based production tax that has been discussed in the literature of tax harmonization and tax competition.
    Keywords: export tax, consumption tax, production tax, monopoly, strict Pareto improvement/deterioration
    JEL: F12 F13 H2
    Date: 2013–11
  5. By: Arita, Shawn; Tanaka, Kiyoyasu
    Abstract: Does investment liberalization in developing economies affect FDI decisions differently across individual firms? To address this question, we simulate the response of individual firms to reductions in investment costs across developing economies. We explore two policy experiments: elimination of setup-procedure requirements for foreign investors and a reduction in corporate tax rates on foreign-owned multinationals. We find that a relaxing of discriminatory foreign investment procedures induces middle productive firms to increase their entry and production in developing economies substantially, but the most productive firms to expand moderately. Multinationals expand their entry and production in developing economies more substantially following a decline in entry barriers than following a decrease in corporate tax rates.
    Keywords: Developing countries, Foreign investments, International business enterprises, FDI, Firm heterogeneity, Investment liberalization
    JEL: C68 F21 F23 O2
    Date: 2013–11
  6. By: Gianluca Cafiso; Roberto Cellini
    Abstract: The objective of this paper is to gain insights into the relationship between deficit-reducing policies and the evolution of the debt/GDP ratio. We consider past events of fiscal consolidation in a selected group of EU countries and check what is the associated change of the debt/GDP ratio both from a short and medium-term perspective. As for the medium-term perspective, we do also differentiate between tax-based and savings-based fiscal consolidations. Our results point towards a positive short-term effect, while the medium-term effect turns out to be negative. Savingsbased fiscal consolidations result to be less negative on the debt/GDP ratio’s evolution than tax-based ones.
    Keywords: Fiscal consolidations;debt/GDP ratio;Europe
    JEL: H63 E63
    Date: 2013–11
  7. By: Jan Behringer; Till van Treeck
    Abstract: We analyse the link between income distribution and the current account through a descriptive analysis for the G7 countries and a series of panel estimations for the G7 countries and a larger sample of 20 countries for the period 1972-2007. We find that, firstly, rising personal inequality leads to a decrease of household net lending and the current account, ceteris paribus. The effect is strong for top household income shares, but much weaker for the Gini coefficient of household income. This finding is consistent with consumption externalities resulting from upward-looking status comparisons. Secondly, an increase in the corporate financial balance leads to an increase in the current account, i.e., consumers do not fully 'pierce the corporate veil'. There is also tentative evidence that the corporate net lending and the current account increase as a result of a decline in the share of wages in value added. The joint effects of changes in personal and functional income distribution contribute to a significant degree to explaining the global current account imbalances prior to the Great Recession.
    Keywords: Income distribution, current account determinants, household saving, corporate saving, panel data analysis
    JEL: C23 E2 E21 F32 F41 G3
    Date: 2013
  8. By: Federico Cingano (OECD); Ivan Faiella (Bank of Italy)
    Abstract: The Europe 2020 strategy commits Italy to reduce emissions by about 16 per cent by 2020, compared with 2005. In the case of transport, the sector that has contributed most to the growth of total emissions between 1990 and 2008, the 2020 target could be achieved by introducing a Carbon Tax (CT). A CT would significantly reduce householdsÂ’ demand for private transportation, lowering their emissions. CT proceedings could pay for the reduction of more distortive levies (e.g. labour taxation) or recycled to finance the deploying of renewable energy, replacing the existing charges on electricity consumption, thus alleviating the cost burden of less-affluent households. The CT would also be consistent with the polluter-pays principle, since the largest reduction in emissions would be financed to a proportionally larger extent by those with higher emissions.
    Keywords: environmental taxation, climate change, transports
    JEL: D62 Q52 Q54 Q58
    Date: 2013–10
  9. By: Grimaud, André; Neubauer, Mauricio; Rougé, Luc
    Abstract: We study an economy in which a final good is produced by two sectors. One uses a non-renewable and polluting resource, the other a renewable and clean resource. A specific type of research is associated to each sector. The public authorities levy a carbon tax and simultaneously subsidize both research sectors. We study the impact of such a policy scheme on the rate of resource extraction and emissions. The subsidy to research in the clean sector goes in the opposite direction of the effects of the carbon tax. If the tax creates a green paradox, the subsidy moderates it; if the tax slows down resource extraction, then the subsidy generates a green paradox
    Keywords: carbon tax, directed technical change, green paradox, R&D policy
    JEL: O32 O41 Q20 Q32
    Date: 2013–11

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