Tax Reforms for Growing Firms? Evidence from corporate tax filing data in Japan

Kaoru Hosono, Masaki Hotei and Daisuke Miyakawa

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: Using tax filing data of Japanese business enterprises from 2014 to 2020, we investigate how the 2015-2018 tax reforms in Japan affected the average tax burden and whether the reforms benefited growing firms or not. We first calculate backward-looking effective tax rates (ETRs) and then estimate the sensitivity of the ETR and its components with respect to firm sales growth, R&D intensity, and other characteristics. Our findings are as follows. First, the average ETR increased after the reform. Second, compared with the average ETR, ETRs for growing and R&D-intensive firms initially decreased, but then began to increase. The reforms did not benefit growing firms in the long run due to the expansion of tax bases.

Pages: 52 pages
Date: 2025-08
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:25072

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