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Business and Economics > Corporate Taxation

You are looking at 1 - 3 of 3 items for :

  • Type: Journal Issue x
  • 'Panel Data Models; Spatio-temporal Models' x
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Cover IMF Working Papers
The Right Kind of Help? Tax Incentives for Staying Small
Ms. Dora Benedek
,
Mr. Pragyan Deb
,
Mr. Borja Gracia
,
Mr. Sergejs Saksonovs
,
Ms. Anna Shabunina
, and
Mrs. Nina T Budina
Some countries support smaller firms through tax incentives in an effort to stimulate job creation and startups, or alleviate specific distortions, such as financial constraints or high regulatory or tax compliance costs. In addition to fiscal costs, tax incentives that discriminate by firm size without specifically targeting R&D investment can create disincentives for firms to invest and grow, negatively affecting firm productivity and growth. This paper analyzes the relationship between size-related corporate income tax incentives and firm productivity and growth, controlling for other policy and firm-level factors, including product market regulation, financial constraints and innovation. Using firm level data from four European economies over 2001–13, we find evidence that size-related tax incentives that do not specifically target R&D investment can weigh on firm productivity and growth. These results suggest that when designing size-based tax incentives, it is important to address their potential disincentive effects, including by making them temporary and targeting young and innovative firms, and R&D investment explicitly.
Keywords:
WP; firm; tax incentive; size-based taxation; productivity; growth; structural reforms; firm TFP; innovation activity; leverage ratio; EMTR computation; debt-to-asset ratio; factory productivity growth; firm level; analysis firm; Tax incentives; Total factor productivity; Corporate income tax; Marginal effective tax rate; Global
Cover IMF Working Papers
Unlocking Pakistan’s Revenue Potential
Mr. Serhan Cevik
Despite the significant progress in recent years, Pakistan’s tax revenue remains low relative to comparator countries and the tax effort expected for the country’s level of development. In light of the potential endogenity of tax revenue and economic growth, this paper contributes to the literature by developing a novel identification strategy to estimate the short-run and long-run elasticities of tax revenue. The empirical findings indicate that a tax system with low elasticity cannot take full advantage of economic growth. Accordingly, unlocking revenue potential is dependent on broadening the tax base, strengthening administration, and rationalizing tax policy across all levels of the general government.
Keywords:
WP; tax revenue; tax; GDP; real GDP; Tax Policy; revenue administration; tax bouyancy; tax elasticity; tax buoyancy; distortionary tax regime; tax concession; increase revenue yield; revenue efficiency; tax morale; boosting tax morale; tax efficiency; tax series; tax revenue elasticity; GST revenue elasticity; Corporate income tax; Personal income tax; Value-added tax; Asia and Pacific; Africa; Global
Cover IMF Working Papers
Assessing the Variability of Tax Elasticities in Lithuania
Mr. Tigran Poghosyan
This paper quantifies the variability of tax elasticities in Lithuania using two alternative methods: rolling regressions and pooled mean group estimator. The analysis is motivated by the systematic variation of tax revenues observed over the economic cycle in the recent past. Both methods confirm that tax elasticities moved with the cycle, which can be attributed to the procyclical tax compliance tendencies and structural composition effects across tax bases. Comparison of VAT revenue gaps across Baltic countries during the recent recovery suggests that tax revenues rebounded fastest in Estonia, followed by Lithuania and Latvia. Overall, the results of the study emphasize the importance of accounting for cyclical variation in tax elasticities when making short-term tax revenue projections.
Keywords:
WP; VAT; tax revenue; tax elasticity; economic cycles; Lithuania; revenue gap; VAT revenue collection; VAT elasticity; VAT collection; VAT revenue growth; Value-added tax; Corporate income tax; Private consumption; Baltics