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on Accounting and Auditing |
| By: | Andreas Haufler; Hirofumi Okoshi; Dirk Schindler |
| Abstract: | We study the effects that the introduction of the Global Minimum Tax (GMT) has from the perspective of developing countries. Our model features two asymmetric host countries for FDI that compete with each other for the location of multinational firms, and simultaneously fight profit shifting to a tax haven. The developing country has the weaker enforcement technology to fight profit shifting; it therefore loses more revenue from profit shifting, but also becomes a more attractive location for multinationals. The GMT reduces both profit shifting and the tax-avoidance advantage of the developing country. If tax competition for real investment is sufficiently severe, the introduction of the GMT reduces tax rates and tax revenues in the developing country while tax revenues in the developed country rise. Our results help explaining the opposition of developing countries to the GMT. |
| Keywords: | global minimum tax, developing countries, tax competition |
| JEL: | F23 H26 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12329 |
| By: | Trabelsi, Mohamed Ali |
| Abstract: | The purpose of this paper is to determine the impact of artificial intelligence (AI) on accounting professions and public governance. Our study builds upon existing literature by providing a descriptive analysis of how AI influences accounting professions. |
| Keywords: | Artificial intelligence; accounting; digital labor; Innovation. |
| JEL: | J2 M4 O3 O38 |
| Date: | 2025–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127412 |
| By: | Kinda Hachem |
| Abstract: | Why does the banking industry remain prone to large and costly disruptions despite being so heavily regulated? Is there a need for more regulation, less regulation, or simply different regulation? Our recent Staff Report combines insights from academic research in economics, finance, and accounting to provide a deeper understanding of the challenges involved in designing and implementing bank regulation, as well as opportunities for future exploration. This post focuses on the regulation of bank capital, but the ideas are applicable more broadly. |
| Keywords: | bank regulation; accounting discretion; shadow banking; regulatory arbitrage; financial stability; optimal policy |
| JEL: | D62 E44 G21 G28 M41 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednls:102211 |
| By: | Patricio A Barra; Polina Prokof'yeva |
| Abstract: | This technical note presents the Reverse Method, a novel indirect approach for estimating the global value-added tax (VAT) compliance gap. The Reverse Method leverages public datasets and a calibrated econometric model to produce scalable, comparable, and indicative VAT gap estimates for over 100 countries and multiple years. It builds on the IMF’s RA-GAP (Revenue Administration Gap Analysis Program) framework, using C-efficiency, tax expenditure data, and national accounts to approximate the compliance gap as a residual. The methodology enables broad cross-country analysis, supports tax gap benchmarking, and provides indicative estimates even where detailed data is scarce. While not a substitute for country-specific RA-GAP assessments, the Reverse Method offers a practical tool for monitoring global VAT compliance trends, informing tax gap analysis, and facilitating international comparisons. Its results highlight differences by income level and region, and the approach is designed for continuous improvement as more data becomes available. |
| Date: | 2025–12–23 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imftnm:2025/015 |
| By: | Ken Tabata (School of Economics, Kwansei Gakuin University) |
| Abstract: | Does reducing the corporate income tax while increasing the consumption tax to satisfy government budget constraints improve welfare? To address this question, this paper examines the welfare-maximizing consumption and corporate income tax rates within a Rivera-Batiz and Romer (1991)-type variety-expanding growth model with financial frictions and heterogeneous R&D productivity. We also explore how these welfare-maximizing tax rates change as financial constraints become less binding due to financial development. The results indicate that under mild and plausible levels of financial frictions, relaxing financial constraints on R&D investment lowers the optimal corporate income tax rate, while raising the optimal consumption tax rate. This finding implies that when financial constraints are eased, enhancing innovation at the expense of current production—by raising the consumption tax and reducing the corporate income tax—improves welfare. The underlying mechanism is that relaxing financial constraints induces entry into R&D only by highly productive entrepreneurs, thereby increasing the average efficiency of R&D investment. |
| Keywords: | Financial Frictions, Corporate Income Tax, Consumption Tax, R&D, Endogenous growth |
| JEL: | E62 H21 H25 O30 O38 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:kgu:wpaper:304 |
| By: | Janine Dixon; Jason Nassios |
| Abstract: | This study presents updated and extended economy-wide modelling of company income tax reform in Australia, using the VURMTAXG model. Relative to Nassios et al. (2025), this study introduces three extensions: estimates of foreign ownership shares by industry and firm size (these were previously estimated by industry only); the implementation of a Net Cash Flow Tax (NCFT); and consideration of threshold effects of a staged Corporate Income Tax (CIT) schedule under monopolistic competition. We find that a Net Cash Flow Tax displays considerable potential to recoup lost revenue from cuts to the CIT rate, taking pressure off domestic households and reversing losses in gross national income, domestic welfare, real post-tax wages and real private consumption associated with a cut to the CIT rate. Even after accounting for foreign ownership shares by firm size, and productivity losses due to the effects of size thresholds for CIT, the implementation of the full package of CIT cuts funded mainly by a NCFT and residually by personal income taxes is shown to increase gross national income and economic welfare. |
| Keywords: | Taxation policy, CGE modelling, Dynamics, Corporate income tax |
| JEL: | C68 E62 H21 H25 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cop:wpaper:g-361 |
| By: | Ana Cebreiro Gomez; Ms. Christina Kolerus; Guilherme Dal Pizzol; Pablo Moreira; Miguel Pecho |
| Abstract: | Brazil’s landmark VAT reform, approved in December 2023, will profoundly alter the way consumption taxes are raised across three levels of government. The dual VAT will replace five overlapping taxes, address major inefficiencies of the current system, and simplify and harmonize a widely scattered tax landscape. While the objective of revenue neutrality is anchored in the reform law, deep structural changes will generate uncertainty about the expected revenue collection. This paper estimates consumption tax revenues under the new VAT based on an adjusted IMF's RA-GAP framework taking into account Brazil’s specificities and documents sectoral shifts in tax burdens. We simulate a wide set of scenarios, modifying key assumptions including on the compliance gap and informality, while being guided by legislated decisions on rates and exemptions. Our findings indicate that minimizing the compliance gap will be the most effective way towards ensuring revenue neutrality. To address revenue risks and unleash the reform’s benefits, full integration of operations and effective management of the input tax credit mechanism are critical. |
| Keywords: | Tax policy; VAT; RA-GAP model; tax compliance; informality |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/266 |