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Taxation of Financial Intermediation : Theory and Practice for Emerging Economines

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  • Patrick Honohan

Abstract

This volume examines the possibilities and pitfalls to successful financial sector tax reform from theoretical, empirical and practical perspectives. It explores the possibilities and limitations of "big ideas" such as removal of all capital income taxation, the application of VAT to financial services or heavy reliance on financial transactions taxes. The risks of attempting to use financial sector taxes as corrective instruments are stressed. Two defensive criteria are advanced as key: making the financial tax system as arbitrage- and inflation-proof as is practicable. Each commissioned essay develops a distinct aspect of the area. Theoretical chapters model the impact of taxes on intermediaries, the design of optimal tax schemes, the role of imperfect information and the relationship with saving. Current practice in the industrial world and case studies of distorted national systems provide an empirical underpinning. Finally, experience with several of the main practical issues is discussed in chapters ranging from the income tax treatment of intermediary loan-loss reserves, the VAT, financial transactions taxes, deposit insurance and inflation. Contributors are distinguished academics and practitioners.

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Bibliographic Info

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This book is provided by The World Bank in its series World Bank Publications with number 15122 and published in 2003.

ISBN: 0-8213-5434-5
Handle: RePEc:wbk:wbpubs:15122

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Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
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Web page: https://openknowledge.worldbank.org
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Related research

Keywords: Economic Theory and Research Banks and Banking Reform Urban Development - Urban Economics Environmental Economics and Policies Public Sector Economics and Finance Finance and Financial Sector Development;

References

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  25. Marco Espinosa-Vega & Steven Russell, 1999. "A public finance analysis of multiple reserve requirements," Working Paper 99-19, Federal Reserve Bank of Atlanta.
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