Performance of tax simplification around the world: A panel frontier analysis

Trang Thi Thuy Nguyen, Binh Thai Pham, Diego Prior and Stefan van Hemmen

Socio-Economic Planning Sciences, 2022, vol. 80, issue C

Abstract: A complex tax system may affect the ease of doing business in a specific country through rising fixed cost and the opportunity cost of taxpayers' time, thus constituting a barrier to foreign direct investment and entrepreneurship. This study observes the tax competitiveness in its tax complexity dimension, by covering 88 countries over timespan 2005–2016 and proposing the panel data nonparametric frontier method [1,2] for the model without explicit output (hereafter, panel data DEA-WEO). A thorough view on tax simplification performance was conducted by measuring the efficiency (both contemporaneous and long-run analysis), which allows producing a ranking, and examining the productivity change of these tax systems. Findings show the uptrend of tax systems' relative efficiency through years, from 31.2% (2005) to 52.6% (2016), along with an increasing convergence of the tax simplification trend. Switzerland was found to be the most efficient country, considering long-run performance; however, Norway appeared to have the most feasible practice and model in the segment. It was also found that the average productivity progress of tax simplification for both periods, 2006–2011 and 2011–2016, was 27.7% and 19.6%, respectively. The robustness analysis finds the positive impact of some macro environment-related factors on tax simplification performance, consolidating and validating the tax competitiveness insight of these tax systems.

Keywords: Tax complexity; Tax simplification; Panel data DEA; DEA-WEO; Tax competitiveness; OECD (search for similar items in EconPapers)
JEL-codes: C44 H21 H83 M21 M48 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0038012121001464
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:80:y:2022:i:c:s0038012121001464

DOI: 10.1016/j.seps.2021.101154

Access Statistics for this article

Socio-Economic Planning Sciences is currently edited by Barnett R. Parker

More articles in Socio-Economic Planning Sciences from Elsevier
Bibliographic data for series maintained by Catherine Liu ().