| Abstract: |
This paper presents some stylised facts about the book-tax gap, i.e. the
difference between book and taxable income, of Italian corporations. This
divergence is a reflection of the usage of any tax shields and any applicable
credits and rebates which, in turn, implies that the concept of taxable income
is elusive. Moreover overlapping fiscal policies make harder, on the one hand,
firms’ tax planning and, on the other hand, policymakers’ control on the
effectiveness of their manoeuvres. As for the fiscal year 2000, evidence based
on data drawn from the Diecofis database shows that, as expected (why pay
more?), in Italy there is a widespread and active industry set up to enable
taxpayers to identify and take advantage of particular tax effects. In that
year 55,201 (16% of the) firms were able to report positive book profits and
to indicate non positive taxable incomes. A less expected outcome shows that
the “income race” may finish in a quite different way. More than half (57%) of
the uneconomic companies, ends up with positive taxable incomes (83,449 in
absolute terms). A disaggregated analysis highlights that this latter share is
much more lower among southern corporations and large enterprises, especially
in the construction and in the hotel/restaurant services sectors. Finally, it
results that industries whose firms more often declare negative taxable
incomes tend to display significantly higher shares of irregular workers, as
well. |