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Author: Sebastian Sosa Publisher: INTERNATIONAL MONETARY FUND ISBN: 9781451862836 Category : Languages : en Pages : 29
Book Description
Tax incentives have been used extensively in the countries of the Eastern Caribbean Currency Union (ECCU) to promote investment. The associated revenue losses are large, and benefits in terms of new investment have been limited, raising doubts about the cost effectiveness of the tax incentive schemes. This paper examines the effects of incentives using the marginal effective tax rate approach (METR), adapting this methodology to the case of a small open economy where the marginal investor is a nonresident. The results show that METRs are high in the region; that there is a large dispersion in the size of METRs across financing source; and that METRs on investment are larger than the overall distortion on capital, with a substantial subsidy to domestic saving. In the presence of tax holidays-the most common incentive scheme in the region-the distortion on capital basically vanishes.
Author: Sebastian Sosa Publisher: INTERNATIONAL MONETARY FUND ISBN: 9781451862836 Category : Languages : en Pages : 29
Book Description
Tax incentives have been used extensively in the countries of the Eastern Caribbean Currency Union (ECCU) to promote investment. The associated revenue losses are large, and benefits in terms of new investment have been limited, raising doubts about the cost effectiveness of the tax incentive schemes. This paper examines the effects of incentives using the marginal effective tax rate approach (METR), adapting this methodology to the case of a small open economy where the marginal investor is a nonresident. The results show that METRs are high in the region; that there is a large dispersion in the size of METRs across financing source; and that METRs on investment are larger than the overall distortion on capital, with a substantial subsidy to domestic saving. In the presence of tax holidays-the most common incentive scheme in the region-the distortion on capital basically vanishes.
Author: Sebastian R. Sosa Ravello Publisher: ISBN: Category : Languages : en Pages : 29
Book Description
Tax incentives have been used extensively in the countries of the Eastern Caribbean Currency Union (ECCU) to promote investment. The associated revenue losses are large, and benefits in terms of new investment have been limited, raising doubts about the cost effectiveness of the tax incentive schemes. This paper examines the effects of incentives using the marginal effective tax rate approach (METR), adapting this methodology to the case of a small open economy where the marginal investor is a nonresident. The results show that METRs are high in the region; that there is a large dispersion in the size of METRs across financing source; and that METRs on investment are larger than the overall distortion on capital, with a substantial subsidy to domestic saving. In the presence of tax holidays the most common incentive scheme in the region the distortion on capital basically vanishes.
Author: Rishi Goyal Publisher: International Monetary Fund ISBN: 1451871155 Category : Business & Economics Languages : en Pages : 35
Book Description
Tax concessions have been employed as a central component of the development strategy in the small island states comprising the Eastern Caribbean Currency Union. This paper compares the costs of concessions in terms of revenues forgone with the benefits in terms of increased foreign direct investment. The costs are very large, while the benefits appear to be marginal at best. Forgone tax revenues range between 91⁄2 and 16 percent of GDP per year, whereas total foreign direct investment does not appear to depend on concessions. A rethinking of the use of concessions in the region is needed urgently.
Author: International Monetary Fund. Western Hemisphere Dept. Publisher: International Monetary Fund ISBN: 1513536265 Category : Business & Economics Languages : en Pages : 53
Book Description
This Selected Issues paper focuses on the need and importance of fiscal integration for the Eastern Caribbean Currency Union (ECCU). The continued success of the currency union can be solidified by greater fiscal policy integration. Against the growing intensity of external shocks, country-level fiscal policies remain as the most important policy lever. Regional fiscal policy coordination could usefully supplement national policies in dealing with adverse shocks. Such coordination can potentially create fiscal and policy space along several dimensions. Internationally, fiscal integration takes many forms, depending on the interconnectedness of member economies and their willingness to give up fiscal autonomy. The analysis shows there is scope for tangibly improving tax incentives and rebalancing them toward those that are more effective, while using higher revenues to attract investment also through better infrastructure. Regional coordination could significantly support and accelerate those processes.
Author: Jingqing Chai Publisher: ISBN: Category : Investments, Foreign Languages : en Pages : 36
Book Description
Tax concessions have been employed as a central component of the development strategy in the small island states comprising the Eastern Caribbean Currency Union. This paper compares the costs of concessions in terms of revenues forgone with the benefits in terms of increased foreign direct investment. The costs are very large, while the benefits appear to be marginal at best. Forgone tax revenues range between 9 1/2 and 16 percent of GDP per year, whereas total direct investment does not appear to depend on concessions. A rethinking of the use of concessions in the region is needed urgently.
Author: Ding Ding Publisher: ISBN: 9781513555973 Category : Languages : en Pages : 32
Book Description
The pervasive use of tax incentives is costly for the Caribbean countries, yet the benefits seem limited. Better policy coordination at the regional level is needed to help overcome the collective action problems and generate more revenue to support the much-needed infrastructure investment. Using the region's Citizenship-by-Investment (CBI) programs as an example, we also show that a price-quantity coordination mechanism can help achieve an efficient outcome with greater CBI incomes for member countries.
Author: International Monetary Fund. Western Hemisphere Dept. Publisher: International Monetary Fund ISBN: 1498300103 Category : Business & Economics Languages : en Pages : 67
Book Description
This Selected Issues paper presents a quantification of the long-term benefits of ex-ante resilient investment and insurance needs against natural disasters (ND) in Eastern Caribbean Currency Union (ECCU). Cost-benefit analysis of resilient investment based on a dynamic stochastic general equilibrium model tailored to small states and calibrated to all ECCU economies is also discussed in the paper. The model’s aggregate production function illustrates the interaction among the participating sectors and their contribution to output, ultimately informing the role of resilient investment. The study also quantifies government insurance coverage needs and costs using an empirical stochastic model that simulates NDs fiscal costs. The insurance needs are framed within the World Bank insurance layering framework. The results in this paper underscore the importance of a shift from ex-post recovery to a focus on ex-ante resilience building. Ex-ante resilient investment and insurance are key to the welfare and financial sustainability of the ECCU, given high intensity and recurrence of NDs.
Author: Sebastian Sosa
Author: Sebastian Sosa
Author: Sebastian R. Sosa Ravello
Author: Sebastian Sosa
Author: Rishi Goyal
Author: International Monetary Fund. Western Hemisphere Dept.
Author: Jingqing Chai
Author: Caribbean Economic Development Corporation
Author: Ding Ding
Author: International Monetary Fund. Western Hemisphere Dept.
Author: