The Rates and Revenue of Bank Transaction Taxes

Jorge Baca-Campodónico, Luiz de Mello and Andrei Kirilenko

No 494, OECD Economics Department Working Papers from OECD Publishing

Abstract: This paper provides cross-country empirical evidence on the productivity of bank transaction taxes (BTTs). Our data set comprises six Latin American countries that have levied BTTs since the late 1980s: Argentina, Brazil, Colombia, Ecuador, Peru and Venezuela. We find that, for a given tax rate, revenue declines over time. Therefore, in order to meet a fixed revenue target in real terms, the tax rate needs to be raised repeatedly. However, we also find that successive increases in the tax rate erode the tax base by more than they raise revenue yield and that the higher the increase in the tax rate, the more and faster the tax base is eroded. We conclude that BTTs do not provide a reliable source of revenue, especially over the medium term. Ce document fournit une étude empirique de comparaison internationale sur la productivité des impôts sur les transactions bancaires (ITB). Notre base de données correspond à 6 pays d’Amérique latine qui ont un impôt sur les transactions bancaires: Argentine, Brésil, Colombie, Équateur, Pérou et Venezuela. Nous trouvons que le revenu diminue au fil du temps pour un taux d’imposition donné. Pour cette raison, le taux d’imposition doit être augmenté régulièrement en vue d’atteindre une cible de revenu en terme réel. Cependant, nous voyons que les augmentations successives des taux d’imposition réduisent l’assiette d’imposition plus que le rendement obtenu, et plus grande est la hausse du taux d’imposition, plus rapide est l’érosion de l’assiette d’imposition. Nous concluons que l’imposition des transactions bancaires ne fournit pas une source de revenu fiable, particulièrement sur le moyen terme.

Keywords: bank debit tax; bank transaction tax; impôt sur les retraits bancaires; impôts sur les transactions bancaires; productivité des impôts; tax productivity (search for similar items in EconPapers)
JEL-codes: G28 G29 H21 H22 (search for similar items in EconPapers)
Date: 2006-06-30
New Economics Papers: this item is included in nep-ban, nep-fin, nep-fmk, nep-pbe and nep-pub
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:494-en

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