营业税改增值税文献综述及外文文献资料.docx

营业税改增值税文献综述及外文文献资料.docx

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营业税改增值税文献综述及外文文献资料

本份文档包含：

关于该选题的外文文献、文献综述

一、外文文献

标题:

ThereducedVATrateforsmallbusinessinCroatia

作者:

Blazic,H.,&Dimitric,M.

期刊:

 ZbornikRadovaEkonomskiFakultetRijeka,卷:

27；期:

1；页:

83-114；

年份:

2015

ThereducedVATrateforsmallbusinessinCroatia

Abstract

ThispaperassessesthepotentialeffectsofintroductionofthereducedVATrateforsmallbusiness,basedontheEUVATlegislationdevelopment.Theanalysisincludeseffectsonprices,sales,shadoweconomyandemployment.Itstartswiththeassumptionofnosubstantialeffect.SurveyforCroatiaisdonebysmallbusinessowners'interviewsandencompassesdescriptiveandinferentialstatisticsbasedonparametrictests.TheEUexpectedexistenceofalinkbetweenVATreduction,pricereduction,salesincreaseandpositiveeffectsonemployment（aswellasdeclineintheshadoweconomy）isprovedeveninthisresearch.However,thepass-throughtopricesisverymoderateaswellasothereffects.ThereducedVATratecouldhavesomepositiveresultsfortherestaurantsandbarsonly.Thereexistsalsosomepossibilityforconstructionofhousingandconstructionservicesrelatedtohousingaswellassomeotherlaborintensiveservices.

Keywords:

publicfinance,smallbusiness,reducedVATrates,efficiency,Croatia

1.Introduction

TheVAT,astheindirecttax,isassumedtohavebeenbornebytheconsumers.Thereductionofitsratesisexpectedtodecreasepricesandincreasedemand,whichisespeciallyimportantforthosesmallbusinesseswithhighpriceelasticityofdemand.Thispossibility,alongwithothertaxincentivesforsmallbusiness,isusedbytheEUsincetheendofthelastcenturyforlabourintensiveservices（offeredmostlybythesmallbusiness）.OneofthemostrecentproposedchangesistheextensionofthereducedVATratestothesetoflocallysuppliedservicesinthebroadersense.Thatincludeslabourintensiveservices（reducedratecurrentlybeingofferedtemporarily）,whicharenowevenbroadened,aswellashousingandrestaurantandcateringservices.However,thisproposaloftheEuropeanCommissionwasacceptedbytheEUCouncilonlyconcerningrestaurantservices.

SincetheoptionofthereducedVATrateswillsoonbeavailableinCroatiaasfutureEUcountry,thispaperisanalyzingandassessingthepotentialeffectsofintroducingthereducedVATrateforsmallbusiness（businessunitsthatpaypersonalincometax）ingeneralaswellasforitsactivities.TheresearchisbasedontheexistingEUrulesandlastEuropeanCommissionproposal.Theanalysesincludeeffectsonincome/prices,sales,shadoweconomyandemploymentinsmallbusiness.ThemethodologyintheresearchforCroatiaisbasedonsurvey（telephoneinterview）andencompassesdescriptiveandinferentialstatisticsbasedonparametrictests.

AlthoughtherecentEUresearchseemstobepositivelyinclinedtotheeffectsofreducedVATrates,nosuchoptimismisexpectedtobefoundinCroatia.Thishypothesisofnosubstantialeffectwasbasedonourimpressionsandcontactswithsmallbusinessandsomepre-researchinterviews.Negligiblepriceeffectwasexpected,withtheresultingincomeeffectforsmallbusinessownersbeingrelativelyhigh（noorveryslightpass-through）aswellasveryslighteffectonshadoweconomyandemployment.Differencesinresultsperactivitieswerealsoexpected.However,theconductedresearchhasbroughtalittlebitmoreoptimism.

Aftertheintroductorychapter,inthetheoreticalchapterthepaperreviewstheVATratesgeneralliteratureandresearch.ThisreviewdoesnotincludespecificEUresearch,sinceitispresentedinthesecondchapter,whichisdevotedtotheEUpolicyinthatfieldanditseffects.ThefourthchapterisdedicatedtothepossibleintroductionofreducedVATratesforsmallbusinessinCroatia.Intheendtherearepolicyrecommendationsandconclusion.

2.Theoryandliterature

TheclassicalVATanalysis（forinstanceMusgrave,1993:

297;Stiglitz,2000:

112;Sever,1995:

316;Piffano,2007:

7）usuallystartswiththesimplecaseofhorizontal（perfectlyelastic）supplycurve,whentheentiretaxburdenisshifted（passed）totheconsumer,aspresentedinFigure1.

Thetaxincidenceissimple.Pricerisesbytheamountoftaxandquantityfallsrespectively.Thissimpleframeworkisoftenusedinothersimilaranalysis（forinstanceforcustomsormonopoly）toindicatethedeadweightwelfareloss（thetriangleinthemiddle）causedbytaxes.

Alternativeschedulesincludeperfectlyinelasticdemand（thetaxburdenisagainbornebytheconsumer）,perfectlyinelasticsupplyandperfectlyelasticdemand（thetaxburdenisbornebytheproducer）.The"middlecase",alsooftenusedintheliterature,isthesituationwhenordinarysupplyanddemandcurvesintercept（"normal"elasticityofbothcurves）andwherethetaxburdenissharedamongbothparties.Howevertheabovepresentedcaseisclosetothesmallbusinesslabourintensivecaseofveryelasticsupply,reflectingtheintendedincidenceofVAT（inthetheoryaswellasintheEUexpectationsconcerningreducedVATrates）andseemstobemoreappropriateforfurtheranalysis.

ThereductionintheVATratesimpliesalittlebitdifferentframeworkforfurtheranalysis,whichispresentedinFigure2（4）.

ItisobviousthatthereductionintheVATratelowersthepriceandincreasesquantityinawaythattheypartiallymovetotheirhypotheticalpre-taxvalues.SuchanincidenceiscrucialtotheachievementofthedesiredEUtaxpolicygoals,presentedindetailinthenextchapter.

ItisalsoinlinewithRamseytaxesphilosophywhereundersimplifiedsituationofhorizontalsupplyschedule（Figures1and2）thetaxshouldsimplybeinverselyproportionaltocompensatedelasticityofdemand.Viceversa,theVATtaxreductionismostlyadvocatedinthesituationswheredemandelasticitiesarehigher.Althoughthisphilosophycouldbeseenasunacceptableinacaseofbasicnecessities（negativeequityeffects）suchanefficiencycasecouldbetakenintoaccountinthecaseofsmallbusinesslabourintensiveservices.

ThechosenfigurepresentingcompleteVATpass-throughhasitsjustificationintheempiricalfindingsaboutVATincidence,whichareratherpositive,indicatingconsiderable,fullpass-throughorevenovershifting（forinstanceHarris,1987;BakerandBrechling,1992:

57:

Poterba,1996;BesleyandRosen,1999;Kenkel,2005;Blundell,2009）.

However,thefullpass-throughismostlylimitedtocompetitivemarkets,asthetheoryrequires.Inimperfectlycompetitivemarkets,itislessthanfull（Ruffle,2005）,butcouldbeevenover-shifteddependingonthemarketstructureinmoredetail,aswellaselasticities.5Itdependsalsooneconomiccycles.6

Theold"warning"withVATthatVATincreasesseemstobemoreshiftedtoconsumersthanVATdecreasesisalsoconfirmed（Carbonnier,2005）.Onecouldeasilylinksthattothegeneralinflationtendencies,buttheauthorlinksitwiththeshort-runeffects.Intheshortrun,itiseasiertodecreasethantoincreaseproduction（basedonthedemandelasticityexpectations）.However,suchadaptationsincapitalstock（andnewemployees）arelesslikelytooccurinthecapitalintensivesectorsandmorelikelytooccurinthelabourintensiveservices（seealsonextchapter）.Thisasymmetryinshiftingisvalidformostlycompetitivemarkets,whileinmonopolisticmarketsorinacaseofcollusionanotherasymmetryispresent（Carbonnier,2005）:

priceincreasesarerelativelyweakinordertopreventthefallofthedemand,andpricedecreasesarerelativelystronginordertotakeprofitofthetakeoffofthedemand（casestudyofFrenchVATreforminoligopolymarkets）.

Theapplicationtolocallysuppliedservicesmarketisnotcompletelystraightforward.Itismostlylabourintensivesectorwithgreaterflexibilityandsupplycurveswithveryhighelasticity.Furthermore,thedemandforsuchservicesseemstoposesconsiderableelasticity,partlyduetothefactthatgreatpartoftheservicescouldbedonebythetaxpayersthemselves.Thedeparturefromtheperfectcompetitionofthetextbooksinthesenseofcloserrelationsbetweenserviceprovidersandconsumersisneverthelesspositive,sinceitcouldimplyhigh/completepass-throughofVATreductions.Ontheotherhand,thereissomedegreeofmonopolypoweroflocallysuppliedserviceproducersduetothetransportationortravelcosts,whichcouldhaveoppositeeffect.

Relativelyhighdifferencesinqualitycouldcharacterizelocallysuppliedservices.Thissectorhasalsorelativelyhighsupplysideuncertainty（intermsoffuturepricesanddemand）.Suchahighgeneralsupply-sideuncertaintyanddemand-sidequalityuncertaintywillalsoincreasethepass-throughandthejob-creatingeffectsofaVATreduction（CopenhagenEconomics,2007b:

11-12）.

Smallbusiness,whichislocallyrestrictedandlabourintensive,isrelativelymoreinclinedtobeengagedinablackeconomy.Mainreasonismostlytaxevasion.Almostallkindsoftaxreductionsinfluencethespreadoftheblackeconomy（Lemieuxetal.,1994）.AreducedVATratecanactdirectlyattheprimarysourceofincome.

TheexpectedlinkbetweenreducedratesofVATandnewworkingplaces（aswellasdecreaseinblackeconomy）isbasedonthefollowinglink（withintermediatelinks）:

Itiscommonbelief（forinstanceCommissionoftheEuropeanCommunities,2003a:

4）thatthepricehastofallsufficientlytogenerateincreaseddemandfortheservice.However,highdemandelasticitywillreducethemeasurableeffectonprices,i.e.thepass-throughs,butincreasetheeffectondemand（CopenhagenEconomics,2007b:

5and7-8）.So,thesizeofpass-throughandjob-creatingeffectscouldbeinverselyrelated.Thepass-th