Why Tax Incentives Don't Promote Investment in Brazil
Autor(a) principal: | |
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Data de Publicação: | 1990 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10362/84954 |
Resumo: | This paper discusses the tax issues contributing to the poor Brazilian investment performance. More precisely, the purpose of this paper is threefold. First, the paper develops an analytical framework illustrating the tax design issues reducing the incentive to invest in Brazil. The standard neo-classical framework is adapted to reflect the major characteristics of the Brazilian tax system leading to distortions in the savings and investment decisions. It allows the computation of the marginal effective tax rates (MERT) on capital. The MERTs measure the size of the distortion introduced by taxes in the Brazilian capital market. Second, the computation of the MERT for various types of investment projects is used to show that the current level of taxation of capital in Brazil is unusually high by international standards, with and without tax incentives. Furthermore, the simulations show that the plethora of tax incentives introduced over time to alleviate that burden have lead to complex, inefficient and largely evaded taxes on capital, yielding little revenue without increasing investment. Third, the paper suggests that a reform of the taxation of capital should be a high priority if a recovery of investment and tax revenue is to be achieved by Brazil. |
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Why Tax Incentives Don't Promote Investment in BrazilThis paper discusses the tax issues contributing to the poor Brazilian investment performance. More precisely, the purpose of this paper is threefold. First, the paper develops an analytical framework illustrating the tax design issues reducing the incentive to invest in Brazil. The standard neo-classical framework is adapted to reflect the major characteristics of the Brazilian tax system leading to distortions in the savings and investment decisions. It allows the computation of the marginal effective tax rates (MERT) on capital. The MERTs measure the size of the distortion introduced by taxes in the Brazilian capital market. Second, the computation of the MERT for various types of investment projects is used to show that the current level of taxation of capital in Brazil is unusually high by international standards, with and without tax incentives. Furthermore, the simulations show that the plethora of tax incentives introduced over time to alleviate that burden have lead to complex, inefficient and largely evaded taxes on capital, yielding little revenue without increasing investment. Third, the paper suggests that a reform of the taxation of capital should be a high priority if a recovery of investment and tax revenue is to be achieved by Brazil.Nova SBERUNEstache, A.Gaspar, Vítor2019-10-21T11:50:35Z1990-031990-03-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10362/84954engEstache, A. and Gaspar, Vitor, Why Tax Incentives Don't Promote Investment in Brazil (March, 1990). FEUNL Working Paper Series No. 148info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2024-03-11T04:37:51Zoai:run.unl.pt:10362/84954Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-20T03:36:32.874467Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Why Tax Incentives Don't Promote Investment in Brazil |
title |
Why Tax Incentives Don't Promote Investment in Brazil |
spellingShingle |
Why Tax Incentives Don't Promote Investment in Brazil Estache, A. |
title_short |
Why Tax Incentives Don't Promote Investment in Brazil |
title_full |
Why Tax Incentives Don't Promote Investment in Brazil |
title_fullStr |
Why Tax Incentives Don't Promote Investment in Brazil |
title_full_unstemmed |
Why Tax Incentives Don't Promote Investment in Brazil |
title_sort |
Why Tax Incentives Don't Promote Investment in Brazil |
author |
Estache, A. |
author_facet |
Estache, A. Gaspar, Vítor |
author_role |
author |
author2 |
Gaspar, Vítor |
author2_role |
author |
dc.contributor.none.fl_str_mv |
RUN |
dc.contributor.author.fl_str_mv |
Estache, A. Gaspar, Vítor |
description |
This paper discusses the tax issues contributing to the poor Brazilian investment performance. More precisely, the purpose of this paper is threefold. First, the paper develops an analytical framework illustrating the tax design issues reducing the incentive to invest in Brazil. The standard neo-classical framework is adapted to reflect the major characteristics of the Brazilian tax system leading to distortions in the savings and investment decisions. It allows the computation of the marginal effective tax rates (MERT) on capital. The MERTs measure the size of the distortion introduced by taxes in the Brazilian capital market. Second, the computation of the MERT for various types of investment projects is used to show that the current level of taxation of capital in Brazil is unusually high by international standards, with and without tax incentives. Furthermore, the simulations show that the plethora of tax incentives introduced over time to alleviate that burden have lead to complex, inefficient and largely evaded taxes on capital, yielding little revenue without increasing investment. Third, the paper suggests that a reform of the taxation of capital should be a high priority if a recovery of investment and tax revenue is to be achieved by Brazil. |
publishDate |
1990 |
dc.date.none.fl_str_mv |
1990-03 1990-03-01T00:00:00Z 2019-10-21T11:50:35Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10362/84954 |
url |
http://hdl.handle.net/10362/84954 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Estache, A. and Gaspar, Vitor, Why Tax Incentives Don't Promote Investment in Brazil (March, 1990). FEUNL Working Paper Series No. 148 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Nova SBE |
publisher.none.fl_str_mv |
Nova SBE |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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