Is It Really so Hard to Tax the Hard-to-Tax? The Context and Role of Presumptive Taxes
AbstractThis paper is concerned with the extent to which “presumptive taxation” can be an effective tool to cope with what are commonly called the “hard-to-tax”. While the HTT category is seldom very clearly defined -- often, for example, it excludes those at the top of the power pyramid who manage to save themselves from the full fury of the taxman in accepted (or at least untouchable) ways -- it appears to encompass much of the so-called “informal” (“hidden” “shadow” “underground”) economy that is such a prominent feature of economic reality in many developing and transition countries. Although much of the discussion in this paper covers the use (and abuse) of presumptive taxes in general, our specific focus is on the special simplified tax regimes that have been put into place recently in a number of transitional countries, with special attention to Ukraine and Russia. We analyze the implications of these special regimes in terms of their impact on economic efficiency, equity, and overall tax administration and compliance. We conclude with a brief discussion of the critical problems of developing an “exit strategy” from such special regimes as well as some alternative policies that may prove more promising paths to taxing the HTT.
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Bibliographic InfoPaper provided by International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto in its series International Tax Program Papers with number 0307.
Length: 36 Pages
Date of creation: Dec 2003
Date of revision:
Hard to tax; presumptive tax; VAT; HTT; tax administration; tax evasion; Ukraine; Russia;
Find related papers by JEL classification:
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
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