|
on Public Economics |
| By: | Okeke, Clement Ejiofor; Salaudeen, Yinka Mashood |
| Abstract: | The Nigerian company income tax has undergone historic reforms since early 1990 for the main purpose of encouraging voluntary tax compliance by the companies. This study therefore examined the impact of the past corporate tax reforms on the tax compliance level of companies in Nigeria. Secondary data in the form of annual corporate tax revenue and GDP were extracted from the National Bureau of Statistics records, Federal Inland Revenue Service reports, and Central Bank of Nigeria Bulletins from 1991-2021. Tax compliance rate was generated by computing annual corporate tax revenue as a percentage of the GDP. Wilcoxon rank-sum test and ANOVA were used to determine impact of the reforms on tax compliance. The findings show that only reforms of 2007 and 2015 had significant impacts on tax compliance level out of eight reforms reviewed. While the reform of 2007 had a positive impact, that of 2015 was negative. |
| Keywords: | Tax; Tax Compliance; Tax Reforms; Corporate Tax Compliance Behaviour; GDP; Companies; Company Income Tax Revenue |
| JEL: | H2 M48 |
| Date: | 2023–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124365 |
| By: | Johannes Gallé; Rodrigo Oliveira; Daniel Overbeck; Nadine Riedel; Edson Severnini |
| Abstract: | This paper provides the first comprehensive analysis of how firms in emerging economies respond to carbon taxation, leveraging detailed administrative data from South Africa—a potential trailblazer for other developing countries with limited state capacity amid the growing global push for carbon pricing. We examine the dynamic impacts of the carbon tax on firm-level outcomes—such as profits, sales, capital, and labour inputs—across manufacturing and mining firms, which are key sectors in the context of the carbon tax. |
| Keywords: | Carbon pricing, Carbon tax, Firm performance, Employment |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-33 |
| By: | Matteo Ghilardi; Roy Zilberman |
| Abstract: | We examine the macroeconomic, asset pricing, and public debt consequences of deficit financing dividend taxation in a dynamic general equilibrium model featuring partial investment irreversibility. Dividend taxes interact directly with the occasionally-binding irreversibility constraint, generating tax-augmented user-cost and hangover channels that both shape investment and debt-to-output fluctuations and account for a sizeable share of their long-run volatilities. Our analysis further reveals that debt-offsetting dividend tax hikes initially trigger investment inactivity through higher user-costs, followed by a surge driven by intertemporal tax arbitrage and hangover effects. Finally, debt-driven dividend tax rules amplify asset price fluctuations while delivering only modest fiscal revenue changes. |
| Keywords: | Dividend Taxation; Investment Frictions; Asset Prices; Deficit Financing; Public Debt. |
| Date: | 2025–05–02 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/083 |
| By: | Sebastian Blesse; Florian Buhlmann; Philipp Heil; Davud Rostam-Afschar |
| Abstract: | We study firm responses to local policies through a survey experiment, providing randomized information on the competitiveness of business tax rates and highway access in their headquarters’ municipality. Firms often misperceive local policy competitiveness, especially for tax rates. Investment decisions respond asymmetrically to tax competitiveness. Positive tax rank information reduces investment intentions in neighboring municipalities. Compared to this, negative tax news increase relocation plans. However, most firms receiving bad news plan to continue investing in their headquarters’ municipality, indicating home bias. These effects are strongest for mobile firms and corporations. Negative infrastructure news lower location satisfaction but do not influence investment. |
| Keywords: | tax competition, infrastructure, firm location, survey experiment. |
| JEL: | H25 H32 H71 H72 H73 L21 R38 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11855 |
| By: | Pawel‚ Doligalski (Group for Research in Applied Economics (GRAPE); Bristol University); Piotr Dworczak (Northwestern University; Group for Research in Applied Economics (GRAPE)); Mohammad Akbarpour (Stanford University); Scott Duke Kominers (Harvard Business School Harvard University; Harvard Business Becker Friedman Institute for Research in Economics University of Chicago; Department of Economics Harvard University) |
| Abstract: | Policymakers often intervene in goods markets to effect redistribution---for example, via price controls, differential taxation, or in-kind transfers. We investigate the optimality of such policies alongside the (optimally-designed) income tax. In our framework, agents possess private information about their ability to generate income and consumption preferences, and a planner maximizes a social welfare function subject to resource constraints. We uncover a generalization of the Atkinson-Stiglitz theorem by showing that goods markets should be undistorted if (i) individual utility functions feature no income effects, (ii) redistributive preferences depend only on agents’ ability, and (iii) there is no statistical correlation between ability and taste for goods. We also show, however, that the conclusion of the Atkinson-Stiglitz theorem fails if any of the three assumptions is relaxed. In a special case of our model with linear utilities, binary ability, and continuous willingness to pay for a single good, we characterize the globally optimal mechanism and show that it may feature means-tested consumption subsidies, in-kind transfers, and differential commodity taxation. |
| Keywords: | membership, allocative externalities, pricing tiers, rationing |
| JEL: | D47 D82 H21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:103 |
| By: | Chaimae Chaabi (Doctorante); Yassine Mohamed El Haddad |
| Abstract: | In recent years, the Moroccan tax administration has taken significant steps to accelerate digitalization, a topic that has become central across all sectors and organizations. The DGI (General Directorate of Taxes) has embarked on a transformation process that requires in-depth investigations. The aim of this article is to theoretically analyze the impact of digitalization on the tax controls carried out by the tax administration. We have chosen a narrative literature review to provide a comprehensive analysis of the existing research. The research question guiding this study is as follows: how and to what extent does digitalization contribute to the effectiveness of tax controls carried out by the tax administration? This review highlights approaches concerning efficiency, tax fraud, and the management of tax resources. The results show that digitalization has had a significant impact on tax management by improving the efficiency of tax controls, expanding the tax base, and strengthening the fight against tax fraud and evasion, particularly through the automation of declarations and payments. The main theoretical conclusions reveal that digitalization facilitates the optimization of tax processes through the digitalization of declarations and payments, and improves the transparency of interactions between the taxpayer and the administration. However, theoretical divergences exist, particularly regarding the scope of the impact of these technologies on small businesses and taxpayers less familiar with digital technologies, thus representing a significant theoretical gap. |
| Abstract: | Ces dernières années, l'administration fiscale marocaine a pris des mesures importantes pour accélérer la digitalisation, un sujet devenu central dans tous les secteurs et organisations. La DGI (Direction Générale des Impôts) a entrepris un processus de transformation nécessitant des investigations approfondies. L'objectif de cet article est d'analyser théoriquement l'impact de la dématérialisation sur les contrôles fiscaux réalisés par l'administration fiscale. Nous avons opté pour une revue de littérature conceptuelle afin de proposer une analyse globale des recherches existantes. La question de recherche qui guide cette étude est la suivante : comment et dans quelle mesure la dématérialisation contribue-t-elle à l'efficacité des contrôles fiscaux réalisés par l'administration fiscale ? Cette revue met en lumière l'accent sur les approches concernant l'efficacité, la fraude fiscale, et la gestion des ressources fiscales. Les résultats montrent que la digitalisation a eu un impact significatif sur la gestion fiscale, en améliorant l'efficacité des contrôles fiscaux, en élargissant l'assiette fiscale, et en renforçant la lutte contre la fraude et l'évasion fiscales, notamment grâce à l'automatisation des déclarations et des paiements. Les principales conclusions théoriques révèlent que la dématérialisation facilite l'optimisation des processus fiscaux grâce à la digitalisation des déclarations et des paiements, et améliore la transparence des interactions entre le contribuable et l'administration. Cependant, des divergences théoriques existent, notamment sur la portée de l'impact de ces technologies sur les petites entreprises et les contribuables moins familiarisés avec les technologies numériques, représentant ainsi un gap théorique important. |
| Keywords: | Dematerialization, tax administration, tax audit, tax revenue., Dématérialisation, administration fiscale, contrôle fiscal, recettes fiscales. |
| Date: | 2025–02–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05021348 |
| By: | Matthias Cologna (Free University of Bozen-Bolzano, Italy); Robin Scheuch (Max Planck Institute for Research on Collective Goods & University of Cologne) |
| Abstract: | Cross-cultural research on tax compliance provides two competing explanations for differences in tax paying behavior. The institutional explanation focuses on differences in institutions (e.g., fines, frequency of audits), while the cultural explanation emphasizes differences in culture as an important driver. Contrary to most other studies analyzing differences across countries, we take not only a within-country but a within-region perspective, specifically the Northern Italian region of South Tyrol. Here, two main linguistic - and cultural - groups, German and Italian, co-exist within the same institutional environment. We use a lab-in-the-field experiment with a non-student pool of 190 participants recruited in Bolzano/Bozen, the largest city in South Tyrol. We document that, while the overall level of evasion is similar, there is a difference in tax compliance between the two groups when differentiating between the intensive and extensive margin: Italian speakers evade larger amounts whereas German speakers tend to evade more often. Our experiment is completed by a belief elicitation task and a dice truth-telling game. For both groups perceived tax compliance is lower than actual tax compliance and German speaking taxpayers are perceived to be more compliant. In the dice game, Italian speakers report higher numbers than would be expected from a fair die. |
| Keywords: | Tax Evasion, Culture, Beliefs, Honesty. |
| JEL: | H26 D91 C91 C93 R10 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:bzn:wpaper:bemps114 |
| By: | Quentin Parrinello (EU Tax - EU Tax Observatory); Giulia Varaschin (EU Tax - EU Tax Observatory); Gabriel Zucman (UC Berkeley - University of California [Berkeley] - UC - University of California, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, EU Tax - EU Tax Observatory) |
| Abstract: | This policy note provides a revenue estimate of how much European Member States could raise with a minimum tax of 2% or 3% on the wealth of people owning more than €100 million or €1 billion in wealth – the scenarios considered in the report commissioned by the G20 presidency. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:halshs-05046957 |
| By: | Eren Gürer; Alfons Weichenrieder |
| Abstract: | This study examines optimal government redistribution in a Mirrleesian framework, accounting for a negative effect of longer working hours on productivity. A government ignoring this effect perceives labor supply as insufficient and sets lower marginal income taxes to encourage work. In contrast, a government recognizing the endogenous relationship between productivity and labor supply redistributes more. However, the resulting marginal taxes are still lower than those predicted by standard models where productivity is independent of working hours. |
| Keywords: | working hours, productivity, optimal redistribution, self-confirming policy equilibrium. |
| JEL: | H21 H31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11866 |
| By: | Bromo, Francesco (University of Oxford); Fuerte, Manuela Munoz |
| Abstract: | Evidence evaluating the effect of the tax structure on the growth and survival of small businesses is often inconclusive. We employ a sharp regression discontinuity design to evaluate a tax relief policy for small businesses introduced in Scotland in 2008. We leverage the exogenous nature of the cut-off that determines whether a business qualifies for a 100% discount on non-domestic rates based on a property’s “rateable value” to assess how the policy impacted the growth and survival of small businesses in the city of Glasgow. We find that the tax relief scheme is associated with heightened growth and survival of small businesses benefiting from the discount in the years following its implementation. However, our results speak to the challenges of fully separating a possible causal effect of the policy from changes induced by sorting or manipulation of assignment to treatment. Further tests indicate that the periodically performed re-evaluations of rateable values tend to concentrate just below the exemption cut-off, suggesting that there are other factors that might be influencing the outcome. |
| Date: | 2025–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:9w7fk_v1 |
| By: | Andrea Vaccaro |
| Abstract: | This paper investigates the relationship between inequality and redistributive taxation. It provides a review of existing research on the topic and a cross-country empirical analysis of this relationship. Using data from the World Income Inequality Database, Government Revenue Dataset, and other publicly available sources, it evaluates the validity of a classic political economy argument according to which higher income inequality leads to more redistributive government policies. |
| Keywords: | Redistribution, Income inequality, Ethnic inequality, Taxation, Democracy, Global south |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2025-31 |
| By: | Muthitacharoen , Athiphat (Chulalongkorn University); Paweenawat, Archawa (Puey Ungphakorn Institute for Economic Research, Bank of Thailand); Samphantharak , Krislert (School of Global Policy and Strategy, University of California San Diego) |
| Abstract: | This paper investigates the unintended consequences of size-dependent regulations in small and medium-sized enterprise (SME) promotion policies. We use data from all registered Thai firms to analyze the effects of introducing a revenue cap in the SME tax incentive program qualification. Our study shows a marked bunching of firms just below the cap, illustrating tax salience. We provide evidence suggesting that the bunching is due to real operation responses. A differencein-differences analysis indicates that eligible firms just under the threshold exhibit a significant decline in revenue growth compared to those just above it. This adverse effect is more pronounced among firms with lower pre-policy profitability. We also document substantial negative effects on investment and profitability but find no significant impact on firm survival— challenging the assertion that government support enhances SME survival. Our findings also indicate a marked reduction in the presence of large firms, suggesting broader implications on firm size distribution in the economy. We highlight the double-edged nature of size-based SME policies: while intended to help smaller businesses, the measures may inadvertently suppress growth for firms near the threshold and potentially create resource misallocation. This study underscores the need for a careful policy design that supports SMEs without impeding their potential for growth. |
| Keywords: | size-dependent policy; SMEs; bunching; tax incentives; corporate tax |
| JEL: | G30 H20 K30 L20 L50 |
| Date: | 2025–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0778 |
| By: | Jonas Jessen; Robin Jessen; Ewa Gałecka-Burdziak; Marek Góra; Jochen Kluve |
| Abstract: | We quantify micro and macro effects of changes in the potential benefit duration (PBD) in unemployment insurance. In Poland, the PBD is 12 months for the newly unemployed if the previous year's county unemployment rate is more than 150% of the national average, and 6 months otherwise. We exploit this cut-off using regression discontinuity estimates on registry data containing the universe of unemployed from 2005 to 2019. For those whose PBD is directly affected by the policy rule, benefit recipients younger than 50, a PBD increase from 6 to 12 months leads to 13 percent higher unemployment. A decomposition analysis reveals that 12 months after an increase in the PBD, only half of the increase in unemployment is due to the effect on search effort (the micro effect) while the other half is due to increased inflows into unemployment. The total effect on unemployment, which includes equilibrium effects, is entirely explained by the increase in unemployment of workers directly affected by the policy change. We find no evidence of spill-overs on two distinct groups of unemployed whose PBD is unchanged and no effect on measures of labour market tightness. |
| Keywords: | unemployment benefits, extended benefits, spell duration, separation rate, regression discontinuity. |
| JEL: | H55 J20 J65 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11849 |
| By: | Nielsen, Søren Bo (Dept. of Economics, Copenhagen Business School); Schindler, Dirk (Erasmus School of Economics, Erasmus University Rotterdam); Schjelderup, Guttorm (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | We study how the OECD transfer pricing guidelines aimed at curbing tax-motivated transfer pricing practices affect investment incentives. Our theoretical model integrates the different OECD’s transfer pricing methods into the tax planning cost function of an MNC to evaluate how the choice of transfer price and quantity produced determine the amount of profit shifted. When the transfer pricing method used emphasizes the choice of transfer price over the choice of the quantity of the intermediate good, tax-motivated transfer pricing has positive investment effects. However, when the transfer pricing method treats profit shifting by price and quantity symmetrically, tax-motivated transfer pricing does not impact investment on the intensive margin. Our study has potential policy implications and also produces suggestions for empirical research on transfer pricing and investment. |
| Keywords: | Multinational corporations; corporate tax avoidance; transfer pricing; OECD transfer pricing rules; investment effects |
| JEL: | F23 H25 H26 M48 |
| Date: | 2025–05–22 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2025_018 |