A Taxon Gross Assets of Enterprises as a Form of Presumptive Taxation

Efraim Sadka and Vito Tanzi

No 1992/016, IMF Working Papers from International Monetary Fund

Abstract: A tax on gross assets has been introduced in some developing countries where several factors (most notably, high inflation) enabled apparently viable enterprises to report losses for income tax purposes. The idea of a tax on the value of assets, rather than on the income that the assets generate, seems to have originated in the 17th century in Milan. It was more recently advocated by Luigi Einaudi and Maurice Allais, but their contributions have remained unknown in the Anglo-Saxon world. The economic implications of such a tax are analyzed in this paper. Special attention is devoted to efficiency and administrative aspects. Practical considerations suggest that the tax on gross assets serves as a minimum income tax rather than as a final tax.

Keywords: WP; firm's holding; ability to pay; buying firm; daughter company; indexation scheme; purchased firm; Personal income; Income tax systems; Income and capital gains taxes; Presumptive tax; Europe (search for similar items in EconPapers)
Pages: 22
Date: 1992-02-01
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1992/016

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