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Incidencia fiscal de los incentivos tributarios
[Fiscal Incidence of tax incentives]


  • Ortega, Juan Ricardo
  • Piraquive, Gabriel Armando
  • Hernandez, Gustavo Adolfo
  • Soto, Carolina
  • Prada, Sergio
  • Ramirez, Juan Mauricio


Tax incentives have traditionally been used as a tool by public policy makers in order to correct or reduce market failures. However, there is a widespread debate, in the international literature, about whether they can or not reaching this goal. In this paper, we propose a methodology to assess different tax incentives proposals using several criteria. We use a computable general equilibrium model for that purpose. Our main result is that in order for tax incentives to meet their goals, there needs to be a clear mechanism in the economy by which resources not received by the government become new private investment. However, it is a complex situation for governments, insofar as ensuring the reinvestment of the forgone resources would require additional governmental intervention, which are difficult to control and involve higher costs in administrative, fiscal and efficiency terms.

Suggested Citation

  • Ortega, Juan Ricardo & Piraquive, Gabriel Armando & Hernandez, Gustavo Adolfo & Soto, Carolina & Prada, Sergio & Ramirez, Juan Mauricio, 2000. "Incidencia fiscal de los incentivos tributarios
    [Fiscal Incidence of tax incentives]
    ," MPRA Paper 14016, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:14016

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    References listed on IDEAS

    1. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, May.
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    Cited by:

    1. Diego F. Angel-Urdinola & Quentin Wodon, 2004. "The Impact on Inequality of Raising the Minimum Wage: Gap-narrowing and Reranking Effects," LABOUR, CEIS, vol. 18(2), pages 317-327, June.
    2. Thomas F. RUTHERFORD & Miles K. LIGHT & Gustavo Adolfo HERNANDEZ, 2002. "A dynamic general equilibrium model for tax policy analysis in Colombia," ARCHIVOS DE ECONOMÍA 001910, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    3. Enrique PINZON GARCIA & Oscar M. VALENCIA ARANA, 2006. "The Determinants of Colombian Firm´s Debt-Asset Ratio (1997-2003)," ARCHIVOS DE ECONOMÍA 003582, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    4. Maria Otilia Orozco, 2005. "Colombia's Higher Education Quality Control System and Potential for Further Development," ARCHIVOS DE ECONOMÍA 002139, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    5. Mauricio SANTAMARÍA SALAMANCA, 2001. "External Trade, Skill, Technology and the recent increase of income inequality in Colombia," ARCHIVOS DE ECONOMÍA 002705, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    6. Diego F. ANGEL URDINOLA & Quentin WODON, 2003. "Relative labor supply and the gender wage Gap: Evidence for Colombia and the United States," ARCHIVOS DE ECONOMÍA 003452, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    7. Paula ACOSTA MARQUEZ, 2002. "Does corporate governance matter for developing countries? An overview of the Mexican case," ARCHIVOS DE ECONOMÍA 002380, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    8. Thomas F. Rutherford & Miles K. LIGHT, 2002. "A General Equilibrium Model for Tax Policy Analysis in Colombia: The MEGATAX Model," ARCHIVOS DE ECONOMÍA 011291, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    9. Allan DRAZEN & Marcela ESLAVA, 2003. "The political business cycle in Colombia on the National and Regional level," ARCHIVOS DE ECONOMÍA 003616, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    10. Jaime Andrés ESTRADA, 2002. "Optimal enforcement: Finding the right balance," ARCHIVOS DE ECONOMÍA 003302, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    11. José Daniel REYES PEÑA, 2003. "The cost of disinflation in Colombia: -A sacrifice Ratio Approach-," ARCHIVOS DE ECONOMÍA 003579, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    12. Hugo A. Macías Cardona & Luis Fernando Agudelo Henao & Mario Ricardo López Ramírez, 2008. "Los Métodos Para Medir La Evasión De Impuestos: Una Revisión," Observatorio de la Economía Latinoamericana, Grupo (Universidad de Málaga), issue 92, february.
    13. Carlos Alberto CASTRO IRAGORRI, 2003. "Yet another lagging, coincident and leading index for the Colombian economy," ARCHIVOS DE ECONOMÍA 003785, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    14. Fernando MESA PARRA, 2001. "Strategic Trade Policy and Exchange Rate Uncertainty," ARCHIVOS DE ECONOMÍA 003527, DEPARTAMENTO NACIONAL DE PLANEACIÓN.
    15. Diego F. ANGEL-URDINOLA, 2004. "A Minimum Wage Increase Can Have an Adverse Distributional Impact:The case of Colombia," ARCHIVOS DE ECONOMÍA 001922, DEPARTAMENTO NACIONAL DE PLANEACIÓN.

    More about this item


    Colombia; Tax Incentives; Computable General Equilibrium Models;

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models


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