This project investigates the views of accountants in Hong Kong on the proposed Goods and Services Tax (“GST”). It also analyses the overall economy of Hong Kong in the past 60 years, focusing on the public finance system and the tax bases. The Hong Kong economy and its economic policies have been overviewed. The deficits after 1997 are found not to be structural. The tax base is also found not to be narrow as there are various types of taxes hidden in people’s daily life and consumptions. This explains the reasons that Hong Kong obtained a surplus for 48 years out of the past 60 years and accumulated a huge fiscal reserve. A survey was conducted and the result revealed that 62% of accountants were against the GST. Even though the response rate is low, the sample size lies in the range of 5% to 6% level of precision at 95% confidence. The Hong Kong Institute of Certified Public Accountants (“HKICPA”) conducted another survey on the GST after the result of this project had been publicly released. The result was consistent with the findings of this project i.e. about 59% of accountants objected the GST. The result of the survey was widely publicised and reported by the media. It provided some references for the Government whether the GST was really needed and whether accountants supported the GST. To a large extent, it caused the Government to set aside the GST consultation in September 2006 and suspend the implementation of the GST.

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This thesis addresses a number of questions on the optimal taxation of firms, with particular emphasis on the challenges to taxation in developing economies. Chapter 1 exploits bunching of firms at a tax kink to identify the effect of a tax rate change on investment. Building on the standard bunching framework, I estimate the frequency distribution of firms around the kink, and the share of bunching firms with excess investment. I apply this approach to administrative tax returns for firms in the United Kingdom and find that excess investment explains up to 20% of bunch ing. Chapter 2 examines the trade-off between production efficiency and revenue efficiency in taxation under imperfect enforcement. We exploit quasi-experimental variation created by a minimum tax scheme, a production inefficient policy used in many developing countries, which consists of taxing firms on turnover as their profit rate falls below a certain threshold. Using administrative tax records of corporations in Pakistan, we find large bunching around the profit rate kink createded by the minimum tax scheme and estimate that the turnover tax reduces evasion by up to 60-70% of corporate income. Chapter 3 analyzes the impact of interventions by the International Monetary Fund (IMF) on countries’ likelihood of adopting the value added tax (VAT). I discuss how the IMF has promoted VAT adoption by making lending conditional on adoption, providing administrative and technical assistance, and reducing the political costs of adoption. Applying a Cox proportional hazard model to a cross-country panel for the period 1975-2000, I find that countries that are under a lending agreement with the IMF are three times as likely to adopt the VAT than are countries not under a lending agreement.

It is well known that tax administration can be subject to an influence of political power, and bad tax administration may lead to an efficiency loss. However, both the extent and the mechanisms of the political intervention and the efficiency loss are still not fully understood in empirical works. Using the Chinese Annual Survey of Manufacturing Firms, digitized data on the turnover of prefectural secretaries of the Chinese Communist Party, and the County Public Finance Statistics Yearbook in China from the year 2000 to 2007, the three chapters in this Ph.D. thesis aim to contribute to our understanding of following three questions: 1. How do local government incentives affect tax enforcement and effective tax rate of VAT? 2. What is the role of local politicians in selective tax enforcement across industries? 3. To what extent does the dispersion in the effective VAT rate across firms lead to production efficiency loss via the channel of resource misallocation? The results suggest that: 1. Weak local government incentives, rather than lack of information on tax base, lead to a low effective VAT rate in China. 2. There is an increasing favouritism in tax enforcement towards capital-intensive industries as the prefectural secretaries of the Chinese Communist Party stay longer in office. On the contrary, labour-intensive industries face tougher tax enforcement. 3. A tax-neutral reform which eliminates the dispersion in VAT rates across firms in the same 4-digit industry produces a gain in aggregate TFP in the order of 7.9% of GDP on average in the period from 2000 to 2007.

The thesis is about household income taxation and consists of three essays. Chapter 1 investigates the implications of the design of income tax schedules for the distribution of household income and work incentives from the cross-national perspective. Using microsimulation techniques, we evaluate the distributional effects of replacing existing graduated rate schedules in Western European countries with flat tax schemes. Our simulations show that in specific circumstances a revenue neutral flat tax reform can increase income equality and improve work incentives; in most cases, however, there is an equity-efficiency trade-off. We show that the specific flat tax design and the welfare state regime play a key role. Chapter 2 estimates the determinants and extent of income tax compliance in a novel way, using income survey data linked with tax records at the individual level for Estonia. I model jointly two processes contributing to discrepancies in employment income between these data sources - tax evasion and (survey) measurement error. The results indicate a number of socio-demographic and labour market characteristics which are associated with non-compliance. Overall, about 12% of wages and salaries are underreported, which is very substantial for a major income source subject to third party reporting and tax withholding. Chapter 3 follows on Chapter 2, extending the scope of analysis from employees to the self-employed. It uses the same data source but an alternative method by Pissarides and Weber (1989), where the scale of income underreporting is inferred from the comparison of income and expenditure patterns across different population groups. Results confirm substantial underreporting of earnings by private employees and indicate large underreporting by the self-employed on the basis of register income, while a much smaller scale of non-compliance is detected for the self-employed and no underreporting for private employees using survey incomes.

The thesis provides a critical analysis of the problems and possibilities for developing cosmopolitan ethics in global finance. With reference to Ideas and debates within the campaign for a Tobin Tax, it is argued that cosmopolitanism is a promising, but limited, agenda for global reform. Extending principles of justice to support the re-distribution of wealth from financial markets towards an expanded program of global welfare provision is laudable. Likewise, the possibility of improving accountability mechanisms and fostering democratic inclusion in the global financial system should be supported. However, the thesis identifies and reflects upon some important ethical ambiguities relating to financial, institutional and democratic universalism. A requirement for capital account convertibility, a cash-based approach to global justice and proposals for state-centric world authority to administer the Tobin Tax infers that the proposal would entrench many of the logics its supporters might oppose. The thesis develops a pragmatic approach to these questions based on the philosophical pragmatism of Richard Rorty. A pragmatic approach acknowledges the historical and cultural contingency of cosmopolitanism, but questions how the ambiguities and tensions that pervade global ethics can be engaged. In this sense, and developing Rorty's concept of sentimental education, it is argued that the Tobin Tax campaign has generated a broad-based public conversation about global finance, increasing sensitivity to the suffering caused by global finance and the ways in which it might be changed. While such conversation may not solve all the dilemmas identified, it does allow for increased awareness of the ambiguity of ethics. The thesis points to a number of instances in the campaign where the constitutive ambiguities of the Tobin Tax have been questioned and alternative practices suggested. A pragmatic approach to the Tobin Tax campaign therefore situates cosmopolitan ideas in the extant dilemmas and indeterminacies of global ethics, looking to suggest alternatives where possible.

Developing country entrepreneurs face family pressure to share income. This pressure, a kinship tax, can distort capital allocations. I combine evidence from a lab experiment—which allows me to estimate an individual-level sufficient statistic for the distortion—with data I collected on a sample of Kenyan entrepreneurs, to quantify the importance of the tax. My data reveal high kinship tax rates for a third of entrepreneurs in my sample. My quantitative analysis makes use of a simple structural model of input allocation fitted to my data, and implies that removing distortions from kinship taxation would increase total factor productivity, and increase the share of inputs used in the largest firms. These effects are substantially larger than those coming from credit market distortions, which I estimate using a cash transfer RCT. My analysis also implies strong complementarities between kinship taxation and credit constraints.

Developing countries have signed over a thousand tax treaties, at a cost of millions of pounds a year, based on a myth. The predominant legal rationale for so-called ‘double taxation’ treaties is outdated, while the evidence that they attract investment into developing countries is inconclusive. Although the financial gains from tax treaties are split between the treasuries of capital exporting countries and their multinational companies, most of the costs are incurred by the fiscs of capital importing countries. Rational actor models alone cannot explain the diffusion of tax treaties to the global South. The missing piece of the picture is ideas. As developing countries have formed their identities as fiscal states, a century-old narrative describing the deleterious effects of double taxation resulting from international fiscal anarchy has shaped different actors’ preferences. From the perspective of those focused on investment promotion, tax treaties are part of what a state does when it wants to compete for investment, regardless of the evidence about their actual effects. Meanwhile, officials developing the tax system have looked to the OECD as the source of sophisticated technical knowledge, and learned to regard tax treaties as the way to ensure ‘acceptable standards’ for taxing multinational companies. This thesis uses interviews with treaty negotiators, observations of international meetings, and archival research, including case studies from the UK, Zambia, Vietnam and Cambodia selected through a mixed methods strategy. It identifies three diffusion mechanisms: competition by developed countries for outward investment opportunities, ‘boundedly rational’ competition by developing countries for inward investment, and efforts by tax specialists to disseminate fiscal standards. It also highlights two scope conditions. First, competition for inward investment can be blocked if political actors are concerned about raising corporate tax revenue. Second, where the preferences of specialists and nonspecialists in a country do not align, control over veto points is a prerequisite to diffusion.

Orientador : Profª Drª Betina Treiger Grupenmacher / Dissertação (mestrado) - Universidade Federal do Paraná, Setor de Ciências Jurídicas, Programa de Pós-Graduação em Direito. Defesa: Curitiba, 17/03/2016 / Inclui referências : f. 264-275 / Resumo: O presente estudo tem por objetivo examinar se os Estados-Membros do Estado Federal Brasileiro deteriam competência legislativo-tributária para instituírem novas hipóteses de responsabilidade tributária para além daquelas previstas no Código Tributário Nacional. Ainda, em a tendo, perquire-se quais seriam os limites a que sujeitos referidos entes federados ao exercê-la. Nesse contexto, e a fim de responder as indagações iniciais, busca-se interpretar, de maneira sistemática, os dispositivos normativos regentes do assunto, de forma a, num primeiro momento, inferir-se qual a função da lei complementar de normas gerais no Estado Federal Brasileiro. Esclarecido esse ponto, passa-se a examinar, com o instrumental ofertado pela norma de competência, os limites formais e materiais veiculados na Constituição Federal e nas Leis Complementares de Normas Gerais à instituição, pelos Estados-Membros, de novas hipóteses de responsabilidade tributária. Por fim, visando ilustrar os aspectos teóricos abordados, são feitas breves considerações acerca das hipóteses de responsabilidade veiculadas em duas leis do Estado do Paraná: Lei nº 18.573/2015, regente do ITCMD, e Lei nº 11.580/1996, que trata do ICMS. Palavras-chave: Competência Tributária. Responsabilidade Tributária. Lei Complementar. Estado Federal Brasileiro. / Abstract: The present study aims to investigate if the member States of the Brazilian Federation would have legislative powers to introduce new rules regarding tax liabilities, besides those specified by the Tax Code. In addition, to examine the potential limits imposed by the Brazilian judicial system on the member States in the exercise of that power. In this context, and in order to answer these initial questions, we seek to interpret in a systematic way, the legal provisions that relate to this issue. Along these lines, the function of the applicable Complementary Law within the general tax rules of the Brazilian Federation are inferred. After clarifying this point, the new rules regarding tax liability for Member States, the formal limitations imposed by the Federal Constitution as well as the Complementary Laws within the general tax rules are examined, with a method that has become the adopted standard. Finally, in order to illustrate the theoretical aspects analyzed, brief remarks are made referencing liability cases in two Paraná State laws: Law nº 18.573/2015, and Law nº 11.580/1996, which pertain to the ITCMD, and ICMS, respectively. Key words: Taxing Powers. Tax Liability. Complementary Law. Federation of Brazilian States.