nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒08‒07
eight papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Taxing Consumption in Canada: Rates, Revenues, and Redistribution By Richard Bird; Michael Smart; Jorge Martinez-Vazquez
  2. Self-employed Person, Family Enterprise, Individual Enterprise: A Legal, Fiscal and Accounting Perspective By Carmen UNGUREANU
  3. How competitiveness shocks affect macroeconomic performance across euro area countries By Karsten Staehr; Robert Vermeulen
  4. Comparative advantage of the EU in global value chains: How important and efficient are new EU members in transition? By Gurgul, Henryk; Lach, Łukasz
  5. Sub-metropolitan Tax Competition with Household and Capital Mobility By Tidiane Ly
  6. The Italian Blitz: a natural experiment on audit publicity and tax compliance By Pietro Battiston; Denvil Duncan; Simona Gamba; Alessandro Santoro
  7. Switch towards tax centralization in Italy: a wake up for the local political budget cycle By Massimiliano Ferraresi; Umberto Galmarini; Leonzio Rizzo; Alberto Zanardi
  8. Views on the Method of Calculation of the Costs of Activities and Coordinates its Implementation By Dana SISEA; Valentin SCARLAT

  1. By: Richard Bird (University of Toronto, Department of Economics); Michael Smart (University of Toronto, Department of Economics); Jorge Martinez-Vazquez
    Abstract: The introduction of the VAT in Canada, initially in the form of the federal GST in 1991, did not signify a major change in the tax mix even after most provincial sales taxes also became VATs. Canadians do not pay much if any more in taxes on their consumption than they did 25 years ago. Although the GST and its provincial companions are not perfect, the evidence is that they create fewer barriers to investment and growth than the taxes they replaced so that Canadians appear as a whole to be better off than they were before setting off down the road to VAT. Nonetheless, perhaps in part because the VAT in Canada unlike in other countries is generally quoted separately (like retail sales taxes in the US) and hence highly visible, it continues to be politically unpopular and considered undesirably regressive. The major contribution of this paper is to examine in some detail and with some new evidence the incidence of Canada’s sales and excise taxes, a question that has received surprisingly little analysis. Because the share of total consumption taxes coming from sales rather than excise taxes has increased, these taxes are now less regressive than they were before the move to VAT, regardless of how incidence is measured. More importantly, there are solid arguments for using consumption than income as a basis for evaluating the progressivity of consumption taxes, and on this measure the GST and its companion taxes appear to be mildly progressive. However because the remaining excises are quite regressive even on this basis, on the whole the sales and excise system remains mildly regressive.
    Keywords: sales tax, excise tax, value-added tax, incidence, progressivity
    Date: 2016–03
  2. By: Carmen UNGUREANU (Faculty of Economics, Ecological University of Bucharest)
    Abstract: An ambitious initiative of the European Commission, also presented the Europe 2020 Strategy, is that, by 2020, 75% of the population aged between 20 and 64 be employed. The responsibility for action in this regard must not belong to governments only, but also to companies, trade unions, NGOs, local authorities and to each person individually. An important role in creating jobs in Romania is played by the self-employed persons, individual enterprises and family enterprises. They offer unemployed people the opportunity to bring their contribution to the economy and society. In this paper, we have proposed an analysis of the self-employed persons, individual enterprises and family enterprises as ways to exercise the free enterprise and a person’s free access to an economic activity, in three areas: legal, taxation and accounting.
    Keywords: family business, accounting
    JEL: L20 M40
    Date: 2016–04
  3. By: Karsten Staehr; Robert Vermeulen
    Abstract: This paper considers the short-term effects of competitiveness shocks on macroeconomic performance in the euro area. Vector autoregressive models are estimated on quarterly data from 1995 to 2013 for individual countries and the whole euro area. The results show that competitiveness shocks help to explain subsequent GDP developments in most countries but have little explanatory power for the current account balance and domestic credit. These results apply for all of the competitiveness measures considered, but a non-traditional competitiveness measure accounting for quality differences fares better in some cases. The effects of the competitiveness measures vary substantially across the countries in the euro area, which likely reflects their different economic structures and institutions. This heterogeneity suggests that policy measures seeking to improve competitiveness may have very different effects on economic performance and financial stability in different countries.
    Keywords: Competitiveness; macroeconomic variables; transmission; euro area
    JEL: E32 E61 F32
    Date: 2016–07
  4. By: Gurgul, Henryk; Lach, Łukasz
    Abstract: We suggest original modifications and extensions of the recently presented methodological developments in ex-post accounting framework in global value chains in order to obtain empirical results both for the analyzed group of ten CEE economies as well as at a country-and-sector-specific level. The empirical results confirm that the role of the selected CEE economies in transition in creating value added with respect to the total value added in the European Union in the GVC framework was biggest in the cases of agriculture-, wood-products-, metal-production, and travel-and-tourism-related sectors. We also found that, after two decades of transition, the measures of productivity in the examined economies in 2009 were still much lower as compared to the EU average for most of the sectors. Moreover, in the transition period, these indexes were increasing, especially after EU accession. In contrary, after two decades of transition, the measures of capital efficiency in the ten CEE economies in 2009 were comparable to the EU average for most of the sectors. Moreover, during this period, the growth rates of these indexes were, in general, positive. However, their growth rates dropped after EU accession.
    Keywords: value added; productivity; capital efficiency; CEE economies; international input-output matrices; transition
    JEL: C67 D57 F1
    Date: 2016–07–01
  5. By: Tidiane Ly (Univ Lyon, CNRS, GATE UMR 5824, F-69130 Ecully, France)
    Abstract: This paper investigates the efficiency properties of tax competition between submetropolitan jurisdictions when capital, residents and workers are mobile, and both households and firms compete for local land markets. We analyze two decentralized equilibria: (1) with a local tax on residents and two separate local taxes on capital and land inputs, efficiency is achieved and the existence of a marginal fiscal cost due to residents’ mobility is revealed; (2) combination of the taxes on capital and land inputs into a single business property tax leads local authorities to charge inefficiently high taxation on capital. We show that capital mobility induces a reduction in the business land taxation and local public inputs are used to offset the distorting effects of the property tax, accounting for the distorting impact of workers’ mobility.
    Keywords: Tax competition, Mobility, Public goods, Public inputs
    JEL: H71 H72 R50 R51
    Date: 2016
  6. By: Pietro Battiston; Denvil Duncan; Simona Gamba; Alessandro Santoro
    Abstract: Tax evasion is a major problem faced by governments across the world, and many strategies have been attempted to minimize its extent. One such strategy is the “fiscal blitz”, consisting in clusters of unexpected tax verification activities targeting businesses. Blitzes have been widely implemented in Italy: the ones taking place in the last years shared many common features, but differed in the level of publicity they received on the media. We use confidential data on Value Added Tax payments at the sector level in two cities to estimate the effect of such publicity on tax compliance of local sellers. By employing a Difference-in-Differences identification strategy, we find that the publicity of the blitz has a positive effect on fiscal declarations made shortly after. The results suggest that increasing awareness on future audits via the media can be an important instrument in the hands of tax authorities.
    Keywords: Tax evasion, Natural experiment, Audit publicity
    JEL: H32 K34 E62
    Date: 2016–07
  7. By: Massimiliano Ferraresi (Università di Ferrara); Umberto Galmarini (Università dell'Insubria e IEB); Leonzio Rizzo (Università di Ferrara e IEB); Alberto Zanardi (Ufficio Parlamentare di Bilancio)
    Abstract: The abolition of the municipal property tax on owner-occupied dwellings accomplished in Italy in 2008 offers a quasi-natural experiment that allows for the identification of the presence of political budget cycles - the incentives for municipalities close to elections to manipulate policy outcome decisions. Our empirical analysis shows that the reform impacted on municipalities that in 2008 were in their pre-electoral year, by expanding the size of their budget in the form of an increase of current expenditure and fees and charges, but this did not occurred in municipalities that experienced their pre-electoral year before 2008.
    Keywords: political budget cycle, transfers, federal budget, property tax, fiscal reform, local elections
    JEL: C23 H71 H72
  8. By: Dana SISEA (Faculty of Economics, Ecological University of Bucharest); Valentin SCARLAT (Faculty of Economics, Ecological University of Bucharest)
    Abstract: The production of goods and services by the entities producing, I assume a significant consumption of material resources and money to which they relate and in the calculations underlying the accounts. In this respect, a major role is the responsibility of the management accounting processing information on resource consumption, they recorded in their own filing system and calculated in basis of this information, the cost of goods and services. The role and importance of this indicator shall require it to be calculated with greater accuracy, at a level as close as possible to reality. This requirement is subject to the application in priority in management accounting, the most effective methods of calculation of costs, those that determine in the most truthful. Methods of calculation differ, in the main, in the light of the specific nature of the activity and profile production technology. The system for calculating the production enterprises being practised in Romania from base a small number of methods of calculation (method, method and methodology phases), all showing deficiencies with respect to the allocation of indirect costs and insufficiently accurate calculation of the cost. Companies in developed countries have economic and a tradition in the field of cost calculation with the application of advanced methods, one of which being the calculation of activity whose efficiency and deployment context are displayed in the following.
    Keywords: dual accounting system, harmonization of accounting systems, method of calculation, object of calculation, direct expenditure, overheads, the basis of allocation
    JEL: M41
    Date: 2016–04

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