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Business and Economics > Corporate Taxation

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Cover IMF Staff Country Reports
India: 2019 Article IV Consultation-Press Release; Staff Report; Staff Statement and Statement by the Executive Director for India
International Monetary Fund. Asia and Pacific Dept
This 2019 Article IV Consultation with India discusses that India has been among the world’s fastest-growing economies in recent years, lifting millions out of poverty. However, growth slowed to a six-year low in the first half of 2019, with both consumption and investment decelerating owing to weak, especially rural, income growth, stresses in the nonbank financial sector, and corporate and environmental regulatory uncertainty. On the external sector, following a rise in vulnerabilities in 2018, stability has returned, anchored by high foreign reserve buffers and a modest current account deficit. With its strong mandate, the new government has an opportunity to reinvigorate the reform agenda aimed at boosting inclusive and sustainable growth. In the near term, given the cyclical weakness of the economy, monetary policy should maintain an easing bias at least until the projected recovery takes hold. Fiscal stimulus should be avoided given fiscal space at risk and revenue losses from the recent corporate income tax rate cut should be offset.
Keywords:
ISCR; CR; U.S. dollar; staff report projection; value; U.S. dollar-value; Indian rupee; U.S. dollar value; U.S. dollar exchange rate; CPI series; Government debt management; Fiscal consolidation; Global; Eastern Europe
Cover IMF Working Papers
Curbing Corporate Debt Bias
Ruud A. de Mooij
and
Mr. Shafik Hebous
Tax provisions favoring corporate debt over equity finance (“debt bias”) are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate financial stability risk. We find that rules targeted at related party borrowing (the majority of today’s rules) have no significant impact on debt bias—which relates to third-party borrowing. Also, these rules have no effect on broader indicators of firm financial distress. Rules applying to all debt, in contrast, turn out to be effective: the presence of such a rule reduces the debt-asset ratio in an average company by 5 percentage points; and they reduce the probability for a firm to be in financial distress by 5 percent. Debt ratios are found to be more responsive to thin capitalization rules in industries characterized by a high share of tangible assets.
Keywords:
WP; dependent variable; TCR rule; Corporate tax; capital structure; debt bias; thin capitalization rule; interest deductibility; TCR variable; so-called thin capitalization rules; EBITDFA percentage; debt-asset ratio; tcrs in industry; uniform tcrs; TCR type; Corporate income tax; Thin capitalization rules; Financial statistics; Global
Cover IMF Staff Country Reports
Albania: Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility, Review Under the Extended Arrangement, and Financing Assurances Review: Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Albania
International Monetary Fund
The staff report for Albania’s Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility is presented. The economy has achieved robust noninflationary growth, albeit with increasing external imbalances, and has begun to tackle longstanding problems in the business environment. The upcoming elections risk diverting policymakers’ attention from stability-oriented policies. Despite significant buffers and inbuilt strengths of the financial sector, continued diligent supervision, high-frequency monitoring, and enhanced cooperation with foreign supervisors of resident banks will be needed to underpin prompt, proactive responses to changing circumstances.
Keywords:
ISCR; CR; GDP data; staff appraisal; growth; inflation expectation; report; deposit withdrawal; financing condition; Loans; Arrears; Corporate income tax; Global
Cover IMF Staff Country Reports
Former Yugoslav Republic of Macedonia: Second Review Under the Stand-By Arrangement and Request for Waiver of Performance Criteria and Rephasing of the Program: Staff Report; Staff Statement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for the former Yugoslav Republic of Macedonia
International Monetary Fund
This paper discusses the Former Yugoslav Republic of Macedonia’s Second Review Under the Stand-By Arrangement and Request for Waiver of Performance Criteria and Rephasing of the Program. The 2007 fiscal deficit target increased modestly to 1 percent of GDP. Taxes were cut and budget quality improved, but there remain fiscal risks, in particular in delivering the planned reduction in transfers and subsidies. Over the medium term, the government aims to keep the fiscal deficit below 1½ percent of GDP, cutting overall government spending by 2 percent of GDP while raising public investment.
Keywords:
ISCR; CR; staff appraisal; fund staff; IMF staff representative; information; executive board discussion; interest rate spread; Currencies; Europe; Global
Cover IMF Staff Country Reports
Cambodia: Selected Issues and Statistical Appendix
International Monetary Fund
The Selected Issues paper discusses Cambodia’s poverty and growth, private sector development, public financial management reform, and debt sustainability. It summarizes the Poverty Assessment and describes the regime of tax incentives, costs, and limits for private investment. It also summarizes the assessment of Cambodia’s Public Expenditure Management system and Public Financial Management Reform Program. It highlights the key reform priorities, and provides historical background on Cambodia’s external and domestic debt. It also includes a statistical appendix and a summary of the tax system.
Keywords:
ISCR; CR; Cambodia; poverty incidence; debt; government; poverty estimate; poverty reduction; investment incentive; poverty assessment; public expenditure management system; further poverty reduction; Tax holidays; Tax incentives; Southeast Asia; Eastern Europe; Asia and Pacific; Mekong; Europe
Cover IMF Staff Country Reports
Guatemala: Staff Report for the 2005 Article IV Consultation
International Monetary Fund
This 2005 Article IV Consultation highlights that following three years of sluggish economic growth, activity in Guatemala improved somewhat in 2004, with real GDP rising by 2¾ percent, but consumer price inflation drifted upward to more than 9 percent. Monetary policy is being geared to reducing inflation to the 4–6 percent range. The exchange system is flexible, but the central bank has intervened in the foreign exchange in 2004 to contain the appreciation of the quetzal against the U.S. dollar. In January 2005, a rules-based mechanism for interventions was introduced.
Keywords:
ISCR; CR; government; policy; government agenda; GDP; priority; private sector; renewed commitment; U.S. dollar; market-oriented policy; exchange rate; Public sector; Central America
Cover IMF Staff Country Reports
Republic of Tajikistan: Selected Issues and Statistical Appendix
International Monetary Fund
This Selected Issues paper analyzes the sources of recent growth in Tajikistan. It concludes that economic growth has been mainly driven by the services sector and a surge in remittances that have been mainly used for private consumption and small-scale private investment. The paper summarizes the recently introduced revisions to the Tax Code, which are an evolutionary step in simplifying the tax system and setting the base for better revenue administration. It also examines the likely impact on households of increasing electricity prices to cost-recovery levels.
Keywords:
ISCR; CR; Tajikistan; wage; debt; remittance; Tajik economy; labor migration; wage bill; growth prospect; recovery level; Corporate income tax; Tariffs; Commercial banks; Central Asia; Global; Central and Eastern Europe