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on Accounting and Auditing |
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Issue of 2017‒07‒30
six papers chosen by |
| By: | Fabien CANDAU; Jacques LE CACHEUX |
| Abstract: | This article proposes an original review of the literature on tax competition, providing new evidence on tax competition concerning different types of capital (intangibles, industrial building, etc). We also present fiscal optimization of Multi-National Firms (MNFs) and document some case studies regarding the foregone tax revenue due to evasion. Amounts saved by firms are comparable to the contributions to the EU budget by countries like the UK, Ireland, the Netherlands or Luxembourg. We estimate the revenue losses for the national governments of EU15 due to corporate tax avoidance through profit shifting under three scenarios considering different levels of `CIT efficiency' to raise revenue for the year 2015. The 'intermediate' scenario predicts that the revenue losses for the EU governments due to corporate tax avoidance amount to approximately 98 billion euros. After this description of the failure of the current system of taxation, the defense of corporate income tax at the European level as a genuine own resource for the EU budget, this article analyzes alternative schemes such as the Common Consolidated Corporate Tax Base (CCCTB). |
| JEL: | F23 H26 H61 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tac:wpaper:2016-2017_6&r=acc |
| By: | ?ukasz Ambroziak (Warsaw School of Economics) |
| Abstract: | The making available in the early 2010s of databases containing world input-output tables (e.g. WIOD) was a significant advancement in research on international trade. It allowed to compile statistics of value added flows between countries. The concept ?trade in value added? accounts for the value added of one country directly and indirectly contained in final consumption of another country. The typical question would be: How much value added of other countries is contained in the consumption of the country under examination?. The trade statistics in value added term eliminate the multiple calculation of such goods in trade ? first as components (intermediate goods) and then as parts of final goods. Thus, those statistics are better to assess the benefits derived by particular countries from foreign trade. The aim of this paper is to present changes of trade balances in bilateral trade of the Central and Eastern European countries (Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia ? CEECs) in 1995-2011. The illustration of these changes is based on trade statistics both in value added terms and in gross terms. The data are downloaded from the World Input-Output Database (WIOD Release 2013). The research study shows that trade deficits and trade surpluses when measured in value added terms tend to become smaller as compared to gross trade figures. The key to understanding of this pattern is trade in intermediates. The differences between trade balances in gross and value added terms differ among the CEECs. The largest are in the Central European countries (the Czech Republic, Hungary, Poland and Slovakia). These countries are strong integrated with the global value chains. |
| Keywords: | gross trade, value added trade, trade balance, Central and Eastern European countries |
| JEL: | F14 F60 D57 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:5007460&r=acc |
| By: | Gitaru, Kelvin |
| Abstract: | Tax is a very important aspect in any country. Revenue collected from taxes enables a country to provide services for its citizens and also development of its economy. However, Kenya does not collect as much revenue as it should. SMEs in particular have the potential of generating a lot of revenue for the government but this is not the case. This poses a significant problem to the government and the country’s growth as a whole. Therefore, this study aimed at assessing the effect of taxpayer education on tax compliance in Kenya, the case of SMEs in Nairobi CBD. The study established the effect of electronic taxpayer education, print media tax payer education, and stakeholder engagement on tax compliance. The target population was SMEs in Nairobi CBD Tax area. The study object was SMEs conducting business within Nairobi CBD. Data was collected by administration of pretested questionnaires to the owners of SMEs business. Data was analyzed using both descriptive and inferential statistics. The nominal and ordinal data was collected using questionnaires and later subjected to quantitative analysis using Statistical Package for Social Sciences. Data was presented in the form of frequency distribution tables & graphs. The study results showed that indeed; electronic taxpayer education, print media tax payer education, and stakeholder engagement, influences tax compliance among SMEs in Nairobi’s CBD area. Correlation Matrix was done to determine the correlation between the independent variables. The results showed that stakeholder’s sensitization is positively related to the taxpayers’ education to correctly calculate the tax compliance, with a correlation coefficient of 0.810. The study recommended that; there was need to improve on tax compliance in SMEs because they are below average, through intensive tax. For SMEs to improve their tax compliances, those involved in their tax matters need knowledge and skills to interpret the various tax laws and regulations. Tax compliance procedures should be simplified because in most cases they are found to be very complicated by SMEs, especially for those who do not keep proper books of account and sometimes do not understand the tax laws in order to reduce the compliance costs in terms of money and time. Small and Medium Enterprises should be levied lower amounts of taxes. The government should consider increasing tax incentives and exemptions. Reduce compliance costs, curb corruption, and improve on accountability and accessibility of KRA services. |
| Keywords: | Taxpayer education,Tax compliance,SME. |
| JEL: | H25 H26 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80344&r=acc |
| By: | Urooj Khan (Columbia University); Suresh Nallareddy (Duke University); Ethan Rouen (Harvard Business School, Accounting and Management Unit) |
| Abstract: | We investigate the relation between the growth in corporate profits and the overall U.S. economy, focusing on the impact of the U.S. corporate tax regime on this relation. We document that the growth of corporate profits, on average, has outpaced the growth of the economy and this disconnect increases as the difference between the corporate income tax rate of the U.S. and the other OECD countries increases. The underlying mechanism is fewer corporate profits being channeled into subsequent domestic investments when the U.S. tax rate is relatively higher, leading to lower economic growth. Our findings have implications for policy setters. |
| Keywords: | Taxes, economic growth, GDP, corporate profits, American Jobs Creation Act of 2004 |
| JEL: | E20 H25 K34 O10 M40 M41 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:18-006&r=acc |
| By: | Banal-Estanol, Albert; Benito, Enrique; Khametshin, Dmitry |
| Abstract: | Asset encumbrance refers to the existence of bank balance sheet assets being subject to arrangements that restrict the bank's ability to freely transfer or realise them. Asset encumbrance has recently become a much discussed subject and policymakers have been actively addressing what some consider to be excessive levels of asset encumbrance. Despite its importance, the phenomenon of asset encumbrance remains poorly understood. We build a novel dataset of asset encumbrance metrics based on information provided in the banks' public disclosures for the very first time throughout 2015. We provide descriptive evidence of asset encumbrance levels by country, credit quality, and business model using different encumbrance metrics. Our empirical results point to the existence of an association between CDS premia and asset encumbrance that is negative, not positive. That is, on average encumbrance is perceived to be beneficial. Still, certain bank-level variables play a mediating role in this relationship. For banks that have high exposures to the central bank, high leverage ratio, and/or are located in southern Europe, asset encumbrance is less beneficial and could even be detrimental in absolute terms. |
| Keywords: | Asset encumbrance; bank risk; Collateral; credit default swaps |
| JEL: | G01 G21 G28 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12168&r=acc |
| By: | Anam Tasawar (University of Gujrat) |
| Abstract: | Managerial compensation is strategically pivotal and practically interesting to manage as it has long-lasting ties with firm?s performance. It is regarded as most crucial tool to attract and retain the top-notched professionals to achieve the firm?s strategic and long term objectives. The executives tends to support their comparatively higher level of compensation sometimes, may be at the cost of priority to firm?s value and interest of principles. In corporate finance literature, this phenomenon of opportunistic behavior has been controlled by various monitoring mechanisms. The new spectacle is apposite in Pakistani financial institutions that have no more strict application of compensation regulation. The current study empirically evaluates the impact of different corporate governance attributes such as institutional shareholders? activism, independence of audit committee and board structure and block holding on the level of compensation paid to CEO of Pakistani listed firms for a period of 2007-2013. All these personas worked as monitoring mechanism for CEOs is scrutiny through stepwise regression. The results found that independent audit committee and board of director along with dual CEO structure and greater family ownership are helpful in mitigating the higher level of CEO compensation with is in align with the agency cost hypothesis. Moreover, higher financial institutional ownership found positively related to CEO compensation which is in accordance with the strategic alliance hypothesis. However, the role of institutions in deciding CEO compensation becomes negative in case of family firms as compared to non-family firms. |
| Keywords: | Managerial Compensation, Corporate Governance, monitoring mechanism |
| JEL: | G30 G39 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iefpro:4807442&r=acc |