Financial Inclusion and Value-Added Taxes in Argentina, Brazil and Chile

Mitchell, K. J.; ScottIII, Robert H.

doi:10.1007/978-3-030-14876-8_3

Cited by 3 publications

(4 citation statements)

References 23 publications

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“…Thus, as more individuals become financially included in the formal financial sector, their income and wealth will increase, which in turn raises their tax contributions. These results are consistent and conform to the findings of prior studies (Maherali, 2007;Oz-Yalaman, 2019;Mitchell and Scott, 2019). In Tables 6 and 7, the regression results for Models 2 and 3 are presented, respectively.…”

Section: Resultssupporting

confidence: 91%

“…The results indicate that both financial inclusion and digital payment have positive impact on tax revenue. Furthermore, Mitchell and Scott (2019) demonstrated that financial inclusion in Argentina, Brazil and Chile led to higher value-added tax (VAT) collection from 2002 to 2015. This paper adds to the existing literature on this topic by bridging a significant gap on empirical studies that analyse the impact of financial inclusion on taxation.…”

Section: Literature Reviewmentioning

confidence: 99%

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Financial Inclusion and Tax Revenue: Evidence From Europe

Al-Own¹,

Bani-Khalid²

2021

IJFR

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This paper aimed to investigate the relationship between financial inclusion and tax revenue using measures from the Global Findex database for a sample of 28 European countries between 2011- 2017. The data were analysed using panel data methodology. The number of people who are financially included in this observed period might increase over time, which would create more income and in turn lead to higher tax contributions to the government. We found strong evidence to suggest that financial inclusion represents one of the determinants of tax revenue in European countries. Results of the analysis show positive and significant impact of financial inclusion as measured by Bank account (% of age +15) and credit card ownership (% age 15+) on tax revenues measures. The results are robust using several sources of taxation. The findings suggest that higher financial inclusion is associated with more tax revenue. These results should be of great interest to regulators and policymakers to take advantage of the developments on financial inclusion.

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Section: Resultssupporting

confidence: 91%

Section: Literature Reviewmentioning

confidence: 99%

Financial Inclusion and Tax Revenue: Evidence From Europe

Al-Own¹,

Bani-Khalid²

2021

IJFR

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“…Examining the impact of financial inclusion on public finances in Argentina, Brazil and Chile between 2002 and 2015, Mitchell et al (2019) show that financial inclusion contributes to better tax collection, including value‐added tax (VAT) collection by encouraging more formal market transactions via the use of bank‐provided credit and debit cards.…”

Section: Literature Reviewmentioning

confidence: 99%

Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries

Chebochok,

Bayale

2023

African Development Review

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Financial inclusion remains at the heart of governments concerns. By creating favorable conditions for access to a diversified range of adapted financial products and services at affordable costs for the populations, financial inclusion generates important opportunities that could lead to increased tax revenue mobilization. This paper analyzes the effects of financial inclusion on tax revenue mobilization, using panel data from West African Economic and Monetary Union (WAEMU) countries over the period 2006–2019. The findings suggest that financial inclusion positively and significantly influences government's tax revenue. Moreover, by looking at the effects of disaggregated financial inclusion dimensions (access, use, and affordability) on various components of tax revenue, we find that the estimated coefficients on the subcomponents of financial inclusion are statistically significant. Results also indicate that the magnitude of effect of financial inclusion is higher on indirect taxes compared to direct tax revenues. This research recommends that policy‐makers should prioritize financial inclusion in their policies and development agenda through National Financial Inclusion Strategies (NFIS) because it can increase countries' resource mobilization and help them to build fiscal resilience.

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“…For instance, Access Bank in Ghana promoted inclusion through a public share offering, preventing collapse and boosting the stock market (2016). Mitchell and Scott (2019) studied Argentina’s use of financial inclusion to attract people to the formal system, observing increased card usage and reduced cash transactions.…”

Section: Theoretical Relevance Empirical Evidence and Hypotheses Form...mentioning

confidence: 99%

Financial inclusion: a catalyst for financial system development in emerging and frontier markets

Ofosu-Mensah Ababio,

Yiadom,

Sarpong-Kumankoma

et al. 2023

JFEP

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Purpose This study aims to examine the relationship between financial inclusion and financial system development in emerging and frontier markets. Design/methodology/approach Using data across 35 countries over 19 years (2004–2022), the improved GMM estimation technique reveals that financial inclusion significantly contributes to the development of financial systems. Findings The study uses a segmented approach, dividing financial development indices into subindices: financial depth, financial access and financial efficiency. Indicators of bank financial inclusion show a positive and highly significant relationship with bank depth and access but a negative relationship with bank efficiency. Similarly, indicators of the debt market and stock market financial inclusion demonstrate positive relationships with market depth and access but negative relationships with debt and stock market efficiency. The study further examines composite indexes of financial inclusion for bank, debt and stock market segments, finding strong and highly significant relationships with market development. These results underscore the importance of promoting financial inclusion across all segments of the financial sector to achieve an inclusive financial system. Practical implications The implications of this research highlight the need for policymakers and practitioners to implement policies and regulations that enhance financial inclusion and foster the development of robust financial systems. By extending access to mainstream financial instruments and services, financial institutions can stimulate financial intermediation and support, thereby accelerating the development of the banking, debt and stock markets. Originality/value The study is robust to the use of several indicators of financial inclusion and financial development, and it forms part of the early studies that examine the close relationship between the two variables.

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Financial Inclusion and Value-Added Taxes in Argentina, Brazil and Chile

Cited by 3 publications

References 23 publications

Financial Inclusion and Tax Revenue: Evidence From Europe

Financial Inclusion and Tax Revenue: Evidence From Europe

Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries

Financial inclusion: a catalyst for financial system development in emerging and frontier markets

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