Effective tax rates and firm size in Ethiopia

Mascagni, Giulia; Mengistu, Andualem

doi:10.1111/dpr.12400

Cited by 25 publications

(13 citation statements)

References 31 publications

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“…First, regarding the macroeconomic variables, we note that taxes have a negative and significant effect on the level of sales. This finding is similar to previous studies (Mascagni and Mengistu, 2019; Sami et al , 2020). Inflation has a negative effect on the level of sales (Regression 2, Table 4).…”

Section: Empirical Findingssupporting

confidence: 94%

Assessing the impact of dividend policy on the sustainability of distressed firms

Sami

Abdallah

2021

JM2

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Purpose The paper uses firm level data for the top listed firms in New York exchange stock over the period 2000–2017. The analysis is mainly based on 237 firms that already experienced losses at the end of the fiscal year. The study aims to use the properties of the dynamic panel data, specifically the methodology proposed by Arenllo and Bond (1991), to fulfill the objectives of the paper. Design/methodology/approach This paper focuses on the dividend policy management of the firms when they experience a loss at the end of the fiscal year. The objective is to examine how such a policy management affects the sustainability of the firm (measured by the future sales and total factor productivity[TFP]) and the wealth of its shareholders (measured by the Stock Returns). Findings The results show that the distressed firms that distribute dividends at the end of the loss period are able to maintain sustainability and to reach more favorable wealth situation of their shareholders relative to the firms who abstain to pay; the dividend policy during periods of loss is still able to send positive signals about the firm in the market; and the dividend policy can be considered as a predictive indicator for a sustainable firm whose shareholders can also predict their capital gains. Originality/value Agreed upon the literature that the firms during the period of crisis are likely to change their dividend policy, this study offers robust evidence that the dividend policy of distressed firms affects their sustainability (measured by sales and TFP) and the wealth status of their shareholders (measured by the Stock Returns).

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Section: Empirical Findingssupporting

confidence: 94%

Assessing the impact of dividend policy on the sustainability of distressed firms

Sami

Abdallah

2021

JM2

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“…This result suggests that as manufacturing firms expand, they tend to pay lower effective tax rates in Ecuador. This result is aligned with the evidence presented by other studies focusing on emergent economies favoring the political power theory that argues a negative relationship between ETR and firm size (Kim and Limpaphayom, 1998;Mascagni and Mengistu, 2019). 17 Furthermore,…”

Section: Effective Tax Rates and Management Practicessupporting

confidence: 90%

“…There is a vast literature that examines the determinants of effective tax rates. A number of studies explore the impact of firm size on ETR (Zimmerman, 1983;Omer et al, 1993;Kim and Limpaphayom, 1998;Mascagni and Mengistu, 2019). Another strand of the literature examines the role of firm ownership, in particular family-ownership, on effective tax rates (Annuar et al, 2014;Gaaya et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

The Effects of Management Practices on Effective Tax Rates: Evidence from Ecuador

Beverinotti¹,

Canavire‐Bacarreza²,

Deza³

et al. 2021

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This paper examines the effects of management practices on effective tax rates (ETR) in a sample of medium and large manufacturing firms in Ecuador. We use a novel data set on management practice scores matched with administrative tax data from the Superintendence of Companies and the Internal Revenue Services of Ecuador based on firms' tax filings. We find that better management practices are positively associated with effective tax rates, defined as the share of tax obligations to profits. This result is robust under various specifications controlling for different covariates, and to different measures of effective tax rates. Furthermore, our findings indicate that the use of fiscal incentives is positively associated with higher effective tax rates. However, firms that use fiscal incentives are able to fatten or reduce their effective tax rates as management practices improved. Overall, our findings suggest that government-sponsored policies that seek to promote better management practices may be self-sustained, if the additional tax revenue expected from better management practices through higher profits is able to cover the cost of the programs.

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“…In addition to those who are registered but fail to file any declaration, a sizeable proportion of taxpayers file tax declarations indicating zero turnover. Although this behaviour seems puzzling, it has been observed in other African countries as well (Almunia, Gerard, Hjort, Knebelmann, Nakyambadde, Raisaro, and Tian 2017;Mascagni and Mengistu 2018;Santoro and Mdluli 2019).…”

Section: The Rwandan Contextmentioning

confidence: 84%

Tax Compliance in Rwanda: Evidence from a Message Field Experiment

Mascagni

Nell

2022

Economic Development and Cultural Change

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* This article is part of a broader project on tax compliance in Rwanda carried out in collaboration with the African Tax Administration Forum (ATAF) and the Rwanda Revenue Authority (RRA), with funding from the International Centre for Tax and Development (ICTD). We are extremely grateful to these institutions for the support they have provided throughout the project and especially to ATAF, which has played a vital role through the involvement of Dr Nara Monkam in the broader project. We are particularly thankful to the staff of the RRA for their invaluable inputs and assistance, that made this project possible. We would like to express our gratitude to RRA's officials, at the time of this project: Commissioner General Mr Richard Tusabe, Deputy Commissioner General Mr Pascal Ruganintwali, Deputy Commissioner for Research and Planning Mme Agnes Kanyangeyo, as well as other Deputy Commissioners who provided assistance and feedback throughout the project. Special thanks are due to RRA's Head of Research Mr Denis Mukama, who has coordinated the implementation of the project and has provided excellent inputs throughout the research. We are also very grateful to John Karangwa, Gaudence Uwimana, Lucie Niyigena, Naphtal Hakizimana, Florence Mukakabanda and the entire research and planning unit, as well as Mme Hajara Batamuliza and all officials involved in the letter delivery. This paper benefited from comments provided by Lucio Castro, Laura Paler, Jorge Garcia Hombrados, Carlos Scartascini, anonymous referees, and participants to various conferences and seminars. All remaining errors are our own. Declarations of interest: none.

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Effective tax rates and firm size in Ethiopia

Cited by 25 publications

References 31 publications

Assessing the impact of dividend policy on the sustainability of distressed firms

Assessing the impact of dividend policy on the sustainability of distressed firms

The Effects of Management Practices on Effective Tax Rates: Evidence from Ecuador

Tax Compliance in Rwanda: Evidence from a Message Field Experiment

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