A Tale of Two Thresholds: Dynamic Implications of Size-Based Policies

时间：4月19日(周三)16:00-17:00

参与方式：Zoom (发送邮件至lujing@nsd.pku.edu.cn获取线上会议链接)

主讲人：Mazhar Waseem (University of Manchester)

参与老师：（国发院）李力行，席天扬，徐化愚，于航，王轩，易君健

        （经院）刘冲，吴群锋，曹光宇



论文摘要：Size-based polices, whereby firms smaller than a given size threshold are not required to remit taxes or comply with regulations, are ubiquitous, especially in developing economies. These policies distort firms size choices, incentivizing them to remain small. In this paper, we explore the dynamic implications of two size-based tax policies from Pakistan. Under the first policy, firms with profits below the income tax exemption threshold are not required to pay profit tax and under the second policy firms with annual turnover below the VAT exemption threshold are not required to remit VAT on their sales. Exploiting the universe of income tax returns filed between 2006 and 2020 and leveraging important tax reforms through which these exemption thresholds were moved more than once, we document six stylized facts on how size-based policies affect firm behavior. Using bunching and difference-in-differences frameworks, we then estimate the reduced-form effects of the policies, exploiting the movements of the two thresholds. Finally, we use the simulated method of moments to estimate a dynamic structural model incorporating non-linear taxation of firms observed in Pakistan. The model rationalizes our results and allows counterfactual policy analysis.

主讲人介绍：Mazhar Waseem is a Reader (Associate Professor) of Economics at the University of Manchester. His research primarily focuses on Public Finance issues of emerging economies, especially on the behavior of economic agents to tax and transfer policies with a view to learn how the design of these policies, especially in weak enforcement environments, can be improved. He holds a Ph.D. in economics from the London School of Economics. He is a Research Associate at the Institute of Fiscal Studies, Research Affiliate at the Centre of Economic Policy Research (CEPR) and an editor of International Tax and Public Finance.