Corporate Income Tax Exemption: The Worst Form of Tax Incentive?

L’exonération d’impôt sur les sociétés: la pire des incitations fiscales ?

Alou Adessé Dama, Grégoire Rota-Graziosi () and Fayçal Sawadogo ()
Additional contact information
Grégoire Rota-Graziosi: CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne
Fayçal Sawadogo: FMI - Fonds Monétaire International - FMI, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne

Post-Print from HAL

Abstract: To attract Foreign Direct Investment crucial for their development, developing countries are multiplying the number of tax incentive schemes, and in particular Corporate Income Tax (CIT) exemptions. Dama et al. (2023) establish that this type of tax incentive is regressive, and therefore redundant and inefficient: More profitable firms benefit more from CIT exemptions (regressivity) and would have invested even without these exemptions (redundancy and inefficiency). Developed countries prefer CIT credits to CIT exemptions in their incentive systems. These credits improve the targeting of desired investments and reduce tax revenue losses.

Keywords: Tax incentives; Corporate Income Tax; Transparency; Developing countries; Incitations fiscales; Impôt sur les sociétés; Transparence; Pays en développement (search for similar items in EconPapers)
Date: 2024-02-21
New Economics Papers: this item is included in nep-pbe
Note: View the original document on HAL open archive server: https://uca.hal.science/hal-04523632v1
References: Add references at CitEc
Citations:

Published in 2024

Downloads: (external link)
https://uca.hal.science/hal-04523632v1/document (application/pdf)

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:hal:journl:hal-04523632

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().