Microreg: a Traditional Tax-Benefit Microsimulation Model Extended to Indirect Taxes and In-Kind Transfers
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MicroReg is a tax-benefit microsimulation model, developed by IRPET (Regional Institute for Economic Planning in Tuscany), able to simulate the main fiscal policies for all the Italian Regions. The model is based on the EUROSTAT Survey on Income and Living Conditions (EU-SILC). In its traditional version MicroReg can simulate direct taxes and in-cash transfers, but recently it was extended in two directions. The first extension aims at adding indirect taxes to simulated tax policies, thanks to a statistical matching between EU-SILC and the Italian Household Budget Survey by Istat(National Institute of Statistics (Italy)). To improve the matching, an estimation of the level of expenditure for each EU-SILC household is added to the variables on which the matching is conditioned, by applying the relation between consumption and income estimated on the Bank of Italy Survey of Households Income and Wealth. The second extension aims at including in-kind transfers, in health and education and in household disposable income. The monetary value of in-kind transfers is estimated with the public cost of production by using national and regional administrative data. The allocation of benefits among individuals is done by following the so called actual consumption approach, both for health and education. This paper describes MicroReg, focusing on the new extensions, and the results of an application to assess the distributive effects of fiscal policies introduced in the last few years in Italy, both on the revenue and on the expenditure side.The main objectives of this report are to review tax policy as implemented in developing countries, to examine the problems that arise and to explore potential avenues for tax reform. Among the major issues are: (1) savings and investment disincentives; (2) intersectoral variation in effective tax rates; and (3) trade distortion. The range of tax reform involves both direct and indirect taxes. Among the potential reforms in direct taxes are: (1) broadening of the tax base; (2) consolidation of the fragmented bases; (3) a shift of the tax base toward consumption. With regard to indirect taxes: (1) rationalization of the tax base to avoid multiple taxation; (2) exemption of indirect taxes on capital goods in general to enhance the yields from investment; (3) tax remission for exporters and non-discriminatory treatments of imports to improve resource allocation.
Tax deferral
Consumption tax
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There is widespread agreement in Washington that the income tax needs to be reformed, although little agreement about how to do it. A common thread in most reform proposals is that they would slash most so-called tax expenditures—spending programs run through the tax system. This follows a long tradition. Stanley Surrey viewed cuts in tax expenditures as the “pathway to tax reform,” and in 1973 made the case in a book of that title. This article revisits Surrey’s pathway, examining various proposals to eliminate, reduce, or reformulate tax expenditures as part of tax reform, including overall limitations on tax expenditures, converting most tax expenditures to credits, and more radical reforms that would vastly reduce the number of people who would file tax returns. The efficacy of introducing a new tax such as a value-added tax or carbon tax to supplement to the income tax is also examined.
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After the 18th National Congress, the Chinese government should speed up tax reform and tax reduction. Tax structure should switch to direct tax. Consumption tax reform of lower tax burden could start within a short time. Replacing business tax by value-added tax should be quickly completed. Personal income tax reform should move toward comprehension. Uneven resource distribution should be taken into consideration in resource tax reform. Property tax should be included in the local financing service, and tax rate must be lower than other nation imposing private property rights. Looking at the long term, export should reinstate to zero export rate regime.
Flat tax
Consumption tax
Tax rate
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Moving the federal government from its heavy reliance on taxes on income and profits to taxes on general consumption has been proposed as a way to improve equity, economic efficiency, and transparency of the tax system. The value-added tax and the retail sales tax offer economically equivalent approaches to general consumption taxation, differing only in how they are administered. A comparison of the two taxes as they now operate, however, suggests considerable advantage for the value-added tax as a national revenue source. Only in terms of requiring fewer businesses to collect the tax is there an advantage to the retail sales tax. The value-added tax is superior or equivalent to the retail sales tax in other important fiscal criteria.
Consumption tax
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Abstract While the 1980s saw major changes to the Australian tax system which sought both to reduce avoidance and evasion and to reform the base structure of income tax, there are design deficiencies in some of these changes which must be attended to. Also a much closer approach to comprehensive and consistent taxation of investment income should be attempted. On the side of indirect tax the replacement of the wholesale sales tax by a broadly based value added tax is highly desirable, but is unlikely to be achievable politically unless lpart of a strategy which combines sales tax reform, tax mix change and income tax reform. In any case, meaningful and durable reform of the tax system requires a basic community consensus which cuts across sectional interest groups and political parties.
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At present,there exist some problems in China's tax-sharing system,such as local tax system incompletion,low efficiency of transfer payment allocation,reinforcing extensive economic growth model,etc. The author believes that the core of the tax-sharing system reform is to perfect the local tax system. Therefore,the local tax should be levied in consumption link instead of production link,and the tax-sharing system reform which focuses on imposing excise tax is essential. The main points of the reform are as follows. First,make the valueadded tax which is levied in production link as central tax. Second,make the excise tax which is levied in consumption link as local tax. Third,reduce the value-added tax rate substantially. Fourth,make individual income tax as local tax and make business income tax as central tax. Fifth,cancel the business tax. Considering the complexity of the tax system reform,this paper proposes the alternative solution which changes the VAT share proportion between central and local government.
Excise
Consumption tax
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Extending VAT tax base reform will affect the turnover tax burdens of various industries.Using input-output table data,the paper analyzes and computes the influences of extending VAT tax base reform on turnover tax burdens of value-added tax industries(industries imposed value-added tax currently) and business tax industries(industries imposed business tax currently) respectively.The results show that firstly,the overall tax burden of value-added tax industry will have a small decline and the service intermediate input ratio is the key factor determining the scale of tax reduction effect;secondly,tax burdens of various business tax industries differ a lot with most industries enjoying tax reductions including business services industry while some industries suffering tax increase such as rental industry,and the choice of value-added tax rate for reform industries and the intermediate input ratio will determine the tax burden change of business services industry.In order to promote fair tax burden between industries and reduce the negative effect of extending VAT tax base reform on industry development,it is necessary to reduce the tax rate of rental industry and transportation industry to some extent.
Tax rate
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GST that is Goods and Service Tax is the latest kind of Indirect Tax which is proposed to be in force from 1st July, 2017 which is already in force on many countries around the world and they all were considering it as their sales Tax system. The GST will be the levied on the manufacture, sale and the consumption of goods and services in India. It is said to be the biggest form of reform in the indirect taxation aspect ever since 1947. The council of the GST will be headed by the Union Finance Minister that is currently Arun Jaitley. The main purpose of GST is to bring about the single tax system for the manufacture and the sale of goods at the both central and the state level in the country. The GST is mainly implemented to remove all other taxes like VAT (Value-Added Tax), Excise duty and Sales Tax. GST is the significance step in the field of indirect tax reforms in India. One tax for manufacturing, training and services.GST is termed as biggest tax reform in Indian tax structure.GST stands for “Goods and services tax”, and is proposed to be a comprehensive indirect levy on manufacture, sale and consumption of goods as well as services at the national level. The purpose of GST is to replace all these taxes with single comprehensive tax, bringing tax it all under single umbrella. The purpose is to eliminate tax on tax. The paper purpose is to highlights the impact of GST on various sectors.
Excise
Consumption tax
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Purpose This paper aims to examine the indirect tax reform process in China. Specifically, it examines the reform of business tax to value-added tax. Inefficiencies within the new tax system are identified and discussed. The “business tax to value-added tax” reform was seen as an essential element in promoting the economic transition and stimulating the service industries (Jin and Jin, 2013). Design/methodology/approach The paper uses archival and current literature. In undertaking the study, the different periods of indirect tax are examined, prior to 1994, 1994-2012, the changes from 2012 culminating in the new 2017 regime. Attributes of “good” value-added tax (VAT) systems are covered as well as a comparison with New Zealand’s goods and services tax (GST). Findings The paper finds that to align with the international trend of indirect tax development and more efficiently accomplish the economic transition China needs to build a more neutral VAT system with fewer reduced rates and exemptions and the tax system have created tax inefficiencies and increased the compliance cost. VAT is imposing an increasingly significant impact on China’s national economy and industrial structure as well as accountants. Originality/value This is the first study that analyses the indirect tax reforms that are currently being implemented in China and as such has lessons for China but also for VAT/GST in general. We should not forget how special New Zealand’s GST is and the clarity of focus of those who implemented it!
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