营业税改增值税文献综述及外文文献资料.docx

1、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: The reduced VAT rate for small business in Croatia作者: Blazic, H., & Dimitric, M.期刊: Zbornik Radova Ekonomski Fakultet Rijeka, 卷: 27；期: 1；页: 83-114；年份: 2015The reduced VAT rate for small business in CroatiaAbstractThis paper assesses the potential ef

2、fects of introduction of the reduced VAT rate for small business, based on the EU VAT legislation development. The analysis includes effects on prices, sales, shadow economy and employment. It starts with the assumption of no substantial effect. Survey for Croatia is done by small business owners in

3、terviews and encompasses descriptive and inferential statistics based on parametric tests. The EU expected existence of a link between VAT reduction, price reduction, sales increase and positive effects on employment (as well as decline in the shadow economy) is proved even in this research. However

4、, the pass-through to prices is very moderate as well as other effects. The reduced VAT rate could have some positive results for the restaurants and bars only. There exists also some possibility for construction of housing and construction services related to housing as well as some other labor int

5、ensive services.Key words: public finance, small business, reduced VAT rates, efficiency, Croatia1. IntroductionThe VAT, as the indirect tax, is assumed to have been borne by the consumers. The reduction of its rates is expected to decrease prices and increase demand, which is especially important f

6、or those small businesses with high price elasticity of demand. This possibility, along with other tax incentives for small business, is used by the EU since the end of the last century for labour intensive services (offered mostly by the small business). One of the most recent proposed changes is t

7、he extension of the reduced VAT rates to the set of locally supplied services in the broader sense. That includes labour intensive services (reduced rate currently being offered temporarily), which are now even broadened, as well as housing and restaurant and catering services. However, this proposa

8、l of the European Commission was accepted by the EU Council only concerning restaurant services.Since the option of the reduced VAT rates will soon be available in Croatia as future EU country, this paper is analyzing and assessing the potential effects of introducing the reduced VAT rate for small

9、business (business units that pay personal income tax) in general as well as for its activities. The research is based on the existing EU rules and last European Commission proposal. The analyses include effects on income/ prices, sales, shadow economy and employment in small business. The methodolo

10、gy in the research for Croatia is based on survey (telephone interview) and encompasses descriptive and inferential statistics based on parametric tests.Although the recent EU research seems to be positively inclined to the effects of reduced VAT rates, no such optimism is expected to be found in Cr

11、oatia. This hypothesis of no substantial effect was based on our impressions and contacts with small business and some pre-research interviews. Negligible price effect was expected, with the resulting income effect for small business owners being relatively high (no or very slight pass-through) as w

12、ell as very slight effect on shadow economy and employment. Differences in results per activities were also expected. However, the conducted research has brought a little bit more optimism.After the introductory chapter, in the theoretical chapter the paper reviews the VAT rates general literature a

13、nd research. This review does not include specific EU research, since it is presented in the second chapter, which is devoted to the EU policy in that field and its effects. The fourth chapter is dedicated to the possible introduction of reduced VAT rates for small business in Croatia. In the end th

14、ere are policy recommendations and conclusion.2. Theory and literatureThe classical VAT analysis (for instance Musgrave, 1993: 297; Stiglitz, 2000: 112; Sever, 1995: 316; Piffano, 2007: 7) usually starts with the simple case of horizontal (perfectly elastic) supply curve, when the entire tax burden

15、is shifted (passed) to the consumer, as presented in Figure 1.The tax incidence is simple. Price rises by the amount of tax and quantity falls respectively. This simple framework is often used in other similar analysis (for instance for customs or monopoly) to indicate the deadweight welfare loss (t

16、he triangle in the middle) caused by taxes.Alternative schedules include perfectly inelastic demand (the tax burden is again borne by the consumer), perfectly inelastic supply and perfectly elastic demand (the tax burden is borne by the producer). The middle case, also often used in the literature,

17、is the situation when ordinary supply and demand curves intercept (normal elasticity of both curves) and where the tax burden is shared among both parties. However the above presented case is close to the small business labour intensive case of very elastic supply, reflecting the intended incidence

18、of VAT (in the theory as well as in the EU expectations concerning reduced VAT rates) and seems to be more appropriate for further analysis.The reduction in the VAT rates implies a little bit different framework for further analysis, which is presented in Figure 2(4).It is obvious that the reduction

19、 in the VAT rate lowers the price and increases quantity in a way that they partially move to their hypothetical pre-tax values. Such an incidence is crucial to the achievement of the desired EU tax policy goals, presented in detail in the next chapter.It is also in line with Ramsey taxes philosophy

20、 where under simplified situation of horizontal supply schedule (Figures 1 and 2) the tax should simply be inversely proportional to compensated elasticity of demand. Vice versa, the VAT tax reduction is mostly advocated in the situations where demand elasticities are higher. Although this philosoph

21、y could be seen as unacceptable in a case of basic necessities (negative equity effects) such an efficiency case could be taken into account in the case of small business labour intensive services.The chosen figure presenting complete VAT pass-through has its justification in the empirical findings

22、about VAT incidence, which are rather positive, indicating considerable, full pass-through or even over shifting (for instance Harris, 1987; Baker and Brechling, 1992: 57: Poterba, 1996; Besley and Rosen,1999; Kenkel, 2005; Blundell, 2009).However, the full pass-through is mostly limited to competit

23、ive markets, as the theory requires. In imperfectly competitive markets, it is less than full (Ruffle, 2005), but could be even over-shifted depending on the market structure in more detail, as well as elasticities.5 It depends also on economic cycles.6The old warning with VAT that VAT increases see

24、ms to be more shifted to consumers than VAT decreases is also confirmed (Carbonnier, 2005). One could easily links that to the general inflation tendencies, but the author links it with the short- run effects. In the short run, it is easier to decrease than to increase production (based on the deman

25、d elasticity expectations). However, such adaptations in capital stock (and new employees) are less likely to occur in the capital intensive sectors and more likely to occur in the labour intensive services (see also next chapter). This asymmetry in shifting is valid for mostly competitive markets,

26、while in monopolistic markets or in a case of collusion another asymmetry is present (Carbonnier, 2005): price increases are relatively weak in order to prevent the fall of the demand, and price decreases are relatively strong in order to take profit of the takeoff of the demand (case study of Frenc

27、h VAT reform in oligopoly markets).The application to locally supplied services market is not completely straightforward. It is mostly labour intensive sector with greater flexibility and supply curves with very high elasticity. Furthermore, the demand for such services seems to poses considerable e

28、lasticity, partly due to the fact that great part of the services could be done by the taxpayers themselves. The departure from the perfect competition of the textbooks in the sense of closer relations between service providers and consumers is nevertheless positive, since it could imply high/comple

29、te pass-through of VAT reductions. On the other hand, there is some degree of monopoly power of locally supplied service producers due to the transportation or travel costs, which could have opposite effect.Relatively high differences in quality could characterize locally supplied services. This sec

30、tor has also relatively high supply side uncertainty (in terms of future prices and demand). Such a high general supply-side uncertainty and demand-side quality uncertainty will also increase the pass-through and the job-creating effects of a VAT reduction (Copenhagen Economics, 2007b: 11-12).Small

31、business, which is locally restricted and labour intensive, is relatively more inclined to be engaged in a black economy. Main reason is mostly tax evasion. Almost all kinds of tax reductions influence the spread of the black economy (Lemieux et al., 1994). A reduced VAT rate can act directly at the

32、 primary source of income.The expected link between reduced rates of VAT and new working places (as well as decrease in black economy) is based on the following link (with intermediate links):It is common belief (for instance Commission of the European Communities, 2003a: 4) that the price has to fa

33、ll sufficiently to generate increased demand for the service. However, high demand elasticity will reduce the measurable effect on prices, i.e. the pass-throughs, but increase the effect on demand (Copenhagen Economics, 2007b: 5 and 7-8). So, the size of pass-through and job-creating effects could be inversely related. The pass-th