nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2020‒06‒29
five papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Can Prepopulated Tax Returns Enhance Tax Compliance? The Effects of the Spanish Renta Web Initiative from a Sociology of Taxation Perspective By Jorge Martinez-Vazquez; Eduardo Sanz-Arcega
  2. Do Multinational Firms Use Tax Havens to the Detriment of Other Countries? By Dhammika Dharmapala
  3. Audits and the Quality of Government By Maximiliano Lauletta; Martín Rossi; Christian Ruzzier
  4. The impact of effective corporate tax rates on investment By Thomas Goda; Sebastián Ballesteros,
  5. Sustainability of an economy relying on two reproducible assets By Robert D. Cairns; Stellio del Campo; Vincent Martinet

  1. By: Jorge Martinez-Vazquez (International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University); Eduardo Sanz-Arcega (Department of Economic Structure, Economic History and Public Economics, University of Zaragoza, Spain)
    Abstract: This paper explores the effects of pre-populated personal income tax returns on taxpayers’ tax morale and tax filing behavior. The special questionnaire about Renta Web included in the 2016 wave of the Spanish Institute for Fiscal Studies Fiscal Barometer surveyed individual perceptions about pre-populating income tax returns. Using probit regression analysis, we test whether pre-population affects tax morale. Secondly, we test whether pre-population influences perceptions about tax filing behavior. Our main results show that the relationship between making changes on the prefilled tax form and the likelihood of facing an audit do influence Spaniards’ tax morale, as well as their perceptions about tax filing behavior. Moreover, pre-population features by themselves do not have a clear impact on tax morale or tax filing behavior. Several policy implications arise from the results.
    Date: 2020–06
  2. By: Dhammika Dharmapala
    Abstract: The use of tax havens by multinational corporations (MNCs) has attracted increasing attention and scrutiny in recent years. This paper provides an exposition of the academic literature on this topic. It begins with an overview of the basic facts regarding MNCs’ use of havens, which are consistent with the location of holding companies, intellectual property, and financial activities in havens. However, there is also evidence of significant frictions that limit MNCs’ use of havens. These limits can be attributed to nontax frictions (such as the legal and business environment in different jurisdictions), to tax law provisions limiting profit shifting, and to the costs of tax planning. There is evidence consistent with the relevance of each of these channels. The paper also argues that nonhaven countries have available a range of powerful tax law instruments to neutralize the impact of MNCs’ use of havens. To the extent that it is not due to political dysfunction, their failure to deploy these instruments more extensively can be viewed as a deliberate policy choice, attributable either to collective action problems among nonhavens or to the possibility that in certain circumstances MNCs’ use of havens increases the welfare of nonhaven countries. In either case, MNCs’ use of havens is facilitated in crucial respects by the laws of nonhaven countries. Finally, the paper discusses how the distinction commonly drawn in public finance theory between “tax avoidance” and “behavioral responses to taxation” can illuminate current debates about the magnitude and implications of MNCs’ profit shifting to havens.
    Keywords: multinational firms, tax havens, international taxation, foreign direct investment, CFC rules, thin capitalization rules
    JEL: H25 F23
    Date: 2020
  3. By: Maximiliano Lauletta (Department of Economics, University of California, Berkeley); Martín Rossi (Department of Economics, Universidad de San Andres); Christian Ruzzier (Department of Economics, Universidad de San Andres)
    Abstract: We exploit the well-documented random assignment of Brazilian municipalities to an audit program to explore the link between audits and the quality of government. We find that audited municipalities employ less labor to provide a given level of public services, and change the way in which they screen their employees—relying less on discretion and more on merit. These improvements in bureaucratic efficiency and professionalization imply an increase in the quality of municipal governments.
    Keywords: bureaucracy, corruption, audits, efficiency, public sector employment
    JEL: D73 D78 H11 H70 J45 O12
    Date: 2020–06
  4. By: Thomas Goda; Sebastián Ballesteros,
    JEL: F21 F32 O11
    Date: 2020–06–25
  5. By: Robert D. Cairns (Centre Interuniversitaire de Recherche en Economie Quantitative, Université McGill [Montréal]); Stellio del Campo (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech, EconomiX - CNRS - Centre National de la Recherche Scientifique - UPN - Université Paris Nanterre); Vincent Martinet (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)
    Abstract: The highest utility level that can be sustained in an economy is given by the maximin value. To be able to use this value for sustainability accounting, the corresponding maximin problem must be solved. This paper studies the sustainability of an economy composed of two reproducible assets, each producing one of two consumption goods which are substitutes in utility. We characterize the maximin path of the economy, and associated maximin shadow values. We discuss how these shadow values could be used as accounting prices for development paths that differ from the maximin trajectory. The corresponding genuine savings indicator informs on the improvement or decline of the sustainable level of utility and the prospects of future generations.
    Abstract: Le plus haut niveau d'utilité qui peut être soutenu dans une économie est donné par la valeur du maximin. Pour être en mesure d'utiliser cette valeur dans le cadre d'une comptabilité environnementale, le problème de maximin correspondant doit être résolu. Cet article étudie la soutenabilité d'une économie basée sur deux actifs renouvelables, chacun produisant un des deux biens de consommation qui sont des substituts dans la fonction d'utilité. Nous caractérisons le sentier maximin de cette économie, et les valeurs implicites associées. Nous discutons de la manière d'utiliser ces valeurs implicites comme des prix comptables le long de trajectoires qui diffèrent du sentier maximin. L'indicateur d'épargne véritable correspondant informe sur l'amélioration ou la détérioration du niveau d'utilité soutenable, et donc sur les opportunités offertes aux générations futures.
    Keywords: substituability,subtainability accounting,maximin,maximin value,comptabilité environnementale,substituabilité
    Date: 2019

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