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Quantification of changes in the CIT gap: an econometric approach

Author

Listed:
  • Konopczak, Karolina

    (Ministry of Finance in Poland)

  • Łożykowski, Aleksander

    (Ministry of Finance in Poland)

Abstract

This article proposes an econometric approach to the estimation of changes in the CIT gap as well as to their decomposition into cyclical and structural components. The method was used to estimate changes in the CIT gap in Poland in years 2016 through 2018. The obtained results indicate that around 40 percent of an increase in CIT revenues over this period (i.e. 6 billion PLN) was of structural nature, i.e. cannot be explained either by the growth in the tax base, or the phase of the business cycle. Due to the lack of any major changes in CIT system over this period of time, this increase can be attributed to improved efficiency of tax collection.

Suggested Citation

  • Konopczak, Karolina & Łożykowski, Aleksander, 2019. "Quantification of changes in the CIT gap: an econometric approach," MF Working Papers 39, Ministry of Finance in Poland, revised 01 Jul 2020.
    • Handle: RePEc:ris:mfplwp:0039
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    More about this item

    Keywords

    CIT gap; cyclicality of tax revenues; non-linear cointegration;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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