Bond Markets Initiation and Tax Revenue Mobilization in Developing Countries

We analyze the relationship between the introduction of a sovereign bond market (BM) and tax revenue mobilization behavior, using a large sample of 119 developing countries. Propensity Scores Matching estimations reveal that BM participation significantly fosters domestic tax revenue mobilization. Moreover, we find that this favorable effect is sensitive to BM countries' characteristics, namely the stance of monetary and fiscal policies, the exchange rate regime, the level of economic development, and the degree of financial openness and financial development. Finally, our results show that BM participation fosters internal taxes and reduces their instability, compared to international trade taxes. These findings highlight the strength of BM in promoting structural reforms in developing countries, through encouraging them to increase their tax effort and even by contributing to some extent to the fiscal transition process.     

Does tax deduction relax financing constraints? Evidence from China's value-added tax reform

Financial constraint is a significant obstacle for firm growth, especially in developing countries where credit is scarce. This paper explores the role of tax policy in relaxing firms' financial constraints by exploiting China's value-added tax (VAT) reform that was initiated in 2004 and completed in 2009. We use a quasi-experimental method and Annual Survey of Industrial Firms (ASIF) data from 2000 to 2009 to estimate the VAT reform's policy effects on financial constraints. We show that the VAT reform significantly improves firms' external financing capacity by decreasing borrowing costs and promoting commercial credit. The findings are robust to alternative specifications but show heterogeneity across ownerships, firm sizes, regions, and between export and non-export firms. Our analysis suggests tax deduction is useful to relax firms' financial constraints.     

Analysis of tax effort in WAEMU: How important are institutional/administrative reforms?

This paper examines, in depth, the hypotheses explaining the tax effort of seven West African Economic and Monetary Union (WAEMU) countries over the period 1996–2018. The studies of Karakaplan and Kutlu were applied to the stochastic tax frontier model. This provides a new method for analyzing tax effort that solves potential endogeneity problems, especially those of income. This study confirms the positive impact of income, trade openness, urbanization, government capital spending and anticorruption on tax revenue mobilization, while the size of the agricultural sector has a negative impact on tax revenue. On the other hand, reforms of tax institutions have no effect on tax effort. The average tax revenue of the countries of the WAEMU is 11.34 and the average tax effort is estimated at 0.7901 over the period 1996–2018. Thus, these countries could achieve a tax revenue to GDP ratio of 13.72% if they fully exploit their potential.     

Dynamic Scoring in a Romer‐Style Economy

This article analyzes how changes in tax rates affect government revenue in a Romer‐style endogenous growth model. Lower tax rates on financial income (returns to physical capital and intellectual property) are partially self‐financing primarily because lower financial income taxes stimulate innovation and enhance labor productivity in the long run. In the baseline calibration, about half of a tax cut is self‐financing in the long run, substantially more than in the Ramsey model. The dynamics of the economy's response to a tax cut are very sluggish and, for some variables, nonmonotonic.     

Financial literacy,financial inclusion,and savings behavior in Laos

This study examines the effects of financial literacy on financial inclusion and savings behavior in Laos. Compared to previous literature, we use a broader definition of financial literacy which covers not only financial knowledge but also financial behavior and financial attitudes. We also use a new definition of financial inclusion which goes beyond the supply-side perspective to consider the consumer’s perspective. To do so, we use the survey instrument designed by the Organisation for Economic Cooperation and Development International Network on Financial Education. We also used more reliable instrumental variables to investigate the effects of financial literacy on financial inclusion (and its components) and savings behavior. We find that financial literacy has statistically positive effects on both financial inclusion and savings. Moreover, the effects of financial literacy on different measures of financial inclusion vary. Our results further show that individuals with higher financial literacy scores are more likely to hold savings in both formal and informal forms than those who have lower financial literacy scores, even when we control for income and education.     

金融税制与货币政策效应

金融税制是一国管理金融活动的有关税收的法律法规的总和。金融税制影响金融市场效率和各类金融活动主体的行为，通过利率传导机制和信贷配给传导机制对货币政策效应产生影响。为保证货币政策能顺利传导，我国目前应进一步完善针对金融市场的流转税和所得税制度，对商业银行不宜取消现行的营业税或急剧降低营业税税率，应针对不同业务细化和完善相关的流转税制度。     

The Impact of Trade Liberalization on Revenue Mobilization and Stability in Sudan

Abstract: This paper attempts to examine key aspects of the Sudanese tax system, paying particular attention to the impact of the recent trade liberalization on government revenues. An eclectic method of analysis is utilized. The results show that the Sudanese tax system as a whole is not buoyant or elastic; the same applies for its major handles. The liberalization reform did not appear to have enhanced revenue productivity and stability in the country. This result indicates the presence of substantial slacks in tax collection and tax evasion. The analysis also shows that tax evasion is the main problem facing tax administration; on average, it stands at about 53 per cent of actual tax yield and 33 per cent of the potential tax yield inclusive of the underground economy's gross domestic product (GDP). Assessment of the determinants of trade revenue suggests that the yield of trade tax has improved due to liberalization; however, the marginal benefit of tax evasion is still considerable. The findings imply that a committed tax reform is crucial for augmenting tax revenue yield as well as for fiscal consolidation and macroeconomic stability.     

Supplying Slot Machines to the Poor

As gambling becomes increasingly accessible worldwide, governments face an important policy question: how should they exploit the industry's growth to raise tax revenue while protecting individuals from the detrimental effects of gambling? Using data on slot machines from the largest per capita gambling market in the world, Australia, we estimate a structural oligopoly model to (i) quantify firms' incentives to make gambling accessible among socioeconomically disadvantaged groups and (ii) evaluate the effect of government policy (tax levies, supply caps, and venue smoking bans) on the distribution of slot machine supply, tax revenue, and problem gambling prevalence.     

我国宏观税负的合理范围与实际水平研究

宏观税负的高低,不仅表明政府在国民经济总量分配中集中程度的高低,也表明政府社会经济职能和财政功能的强弱。合理确定宏观税负水平,对于保证政府财政收入,增强税收对经济的宏观调控能力,实现税收促进经济发展的目标,具有十分重要的意义。在市场经济条件下,一国家宏观税负水平应与其政府履行其职能对财力的客观需求和现阶段生产力发展水平相适应;在考量我国宏观税负的实际水平时,必须考虑事实上存在的视同税收收入。     

Mobilizing non-conventional budgetary resources in Asia in the 21st century

The 21st century will be characterized by the curtailment of tax policy autonomy and high locational elasticities for economic activities. Resource mobilization tasks for Asian governments will therefore be far more complex. With respect to traditional taxes, base broadening and modernization of tax administration will have to be primary instruments of raising additional revenue rather than rate increases.The paper suggests that Asian countries will need to substantially enhance their capacity to benefit from innovative instruments of resource mobilization. These include public asset restructuring, treasury management, and revenue from creation of property rights, regulatory levies and more effective use of cost recovery and user charges. Resource mobilization and delivery of public services will have to be increasingly linked. An Asia wide tax forum to address common concerns, such as tax avoidance will need to be considered.     

广东省金融贷款对地方财政收入影响的实证分析

基于1985—2012年广东省财政收入与广东金融贷款余额的时间序列，运用计量经济学VAR矢量自回归模型对广东省财政收入与地方贷款余额的关系进行了实证研究。研究发现：广东省财政收入与地方贷款余额之间存在长期协整关系，贷款余额每增加1个百分点，广东省财政收入增加0.3033个百分点。并且广东省财政收入的增长是广东金融企业贷款余额的格兰杰原因，而贷款余额的增加却不是财政收入增加的格兰杰原因，表明广东省金融机构贷款结构不合理，贷款资金使用效率低下，造成地方金融机构贷款的低效率使其无法有效带动地方财政收入的增长。最后针对实证结果做出了相应的解释和政策建议。     

金融危机下我国房地产税收的思变

受金融危机的影响,我国房地产市场持续低迷。文章从税收制度的角度,分析了我国房地产的现状,并对如何改变房地产市场现状,提出了若干房地产税收制度的改革建议。     

Trade and Tax Reforms in a Cash‐in‐Advance Economy

We examine the effects of both tariff‐only and coordinated trade‐tax reforms on market access, government revenue, and welfare for a small monetary economy, under the assumption that a certain fraction of purchases of each good must be financed with cash held in advance. We show that if the cash requirement ratio in the exportable sector is greater than that in the importable, then, contrary to previous results, (i) a uniform radial reduction of tariffs has ambiguous effects on both welfare and market access, (ii) tariff and consumption tax reforms that leave consumer prices unchanged may be more efficient in improving market access and welfare than a reform that involves only tariffs, and (iii) export and production tax reforms that keep producer prices unchanged may be welfare deteriorating.     

税收流失的经济效应分析及治理对策

在经济全球化的进程中,"税收流失"这一由来已久的现象再一次以全新的面孔出现在人们面前,成为社会各界普遍关注的焦点,也是困扰各国政府的难点。税收流失不仅造成经济运行秩序的紊乱,破坏了公平竞争机制,而且造成国家财政紧缺,政府宏观调控能力减弱,甚至威胁主权国家的经济安全和社会稳定。本文分析了税收流失的经济效应,并在总结我国税收流失原因的基础上提出了相应的政策建议。     

Tax rate,government revenue and economic performance: A perspective of Laffer curve

The Laffer curve illustrates a theoretical relationship between rates of taxation and the resulting levels of government revenue. This paper explores the relationship between tax rate (direct tax on labor income), government revenue and economic performance in a perspective of the Laffer curve by applying Computable General Equilibrium (CGE) model. The results show that the top of China's Laffer curve is about 40%. The government should consider changes in the entire taxation system and not just changes in direct taxes while increasing direct tax rate. If China wants to maximize tax revenues, the direct tax rate should be 35%. We conduct a variety of sensitivity analyses and conclude that the government tax peak is always 5–10% earlier than the apex of the Laffer curve. So, if a country has reached the top of the Laffer curve, this paper strongly recommends that tax cuts will have positive implications for the economy and government revenue.     

基于地方财政角度的物业税改革方案探讨

本文基于地方财政角度,在理清我国物业税改革的目的、方案的基础上,审视当前分税制改革所带来的地方财源不足的问题,着重论证将土地出让金纳入物业税的必要性。通过税制设计避免现有土地出让金弊端的同时,也能够规范地方财政收入,使其使用规范、收入稳定,从而成为地方政府稳定而持续的收入来源。     

Analysts' Interpretation and Investors' Valuation of Tax Carryforwards*

We examine how financial analysts and equity investors incorporate information on deferred taxes from carryforwards into earnings forecasts and share prices. We focus on carryforwards because, in providing this information each period, management must use their private information about the firm's profitability prospects. Thus, accounting measurement of tax carryforwards is another way of providing a management earnings forecast. In analyzing the role of carryforwards in valuation, we distinguish between two conflicting effects. First, deferred taxes from carryforwards represent future tax savings; hence, they should be valued positively as assets. In contrast, the existence of tax carryforwards may signal a higher likelihood of future losses, which would have a negative effect on expected earnings and share prices. We find that analysts consider earnings of firms with carryforwards to be less persistent because of the increased likelihood of future losses. We also find that analysts tend to be less precise and more optimistic (biased) in forecasting earnings of firms with carryforwards. This higher optimism and lower precision are more pronounced just after firms adopt Statement of Financial Accounting Standards (SPAS) 109 and are almost entirely corrected over time. An analysis of investors' valuation indicates a strong positive relation between deferred taxes from carryforwards and share prices, suggesting that these carryforwards are valued as assets. Also, earnings and book values of equity are valued less in firms that have carryforwards than in firms without carryforwards. Finally, the valuation allowance required under SFAS 109 assists equity investors in valuing a firm's earnings and net assets. The combined findings on analysts' interpretation and investors' valuation suggest that analysts fail to fully capture the implication of carryforwards on future earnings within their forecasting horizon.     

Environmental regulation and responses of local governments

In 1998, China approved the setup of two control zones and implemented stringent environmental regulation in these zones. This policy enables us to use the difference-in-difference method to investigate local governments' responses to environmental regulation. We find that tough environmental regulation increases tax rate but does not affect local government expenditure. Among the mechanisms through which environmental regulation positively affects tax rate are the negative effects of environmental regulation on investment of fixed assets, number and total profits of above-scale industrial firms in dirty industries of TCZ cities. In addition, the effect of environmental regulation on tax rate is positively related to policy strength and proportion of the secondary industry. Moreover, tough environmental regulation increases the shares of revenue from enterprises and agricultural taxes in budgetary revenue, but decreases the share of value-added tax in budgetary revenue. These findings highlight additional cost of environmental regulation (aside from those mentioned in literature), including increased burdens of the private sector that would lead to large distortions, and aggravated unfair distribution of taxes. The additional cost should be considered when evaluating the environmental policy.     

Reconciling Financial Information at Varied Levels of Aggregation*

Financial statements summarize a firm's fiscal position using only a limited number of accounts. Readers often interpret financial statements in conjunction with other information, some of which may be aggregated in a different way (or not at all). This paper exploits properties of the double‐entry accounting system to provide a systematic approach to reconciling diverse financial data. The key is the ability to represent the double‐entry system by network flows and, thereby, access well‐recognized network optimization techniques. Two specific uses are investigated: the reconciliation of audit evidence with management‐prepared financial statements, and the creation of transaction‐level financial ratios.