Financial constraint is a significant obstacle for firm growth, especially in developing countries where credit is scarce. This paper explores the role of tax policy in relaxing firms' financial ...constraints by exploiting China's value-added tax (VAT) reform that was initiated in 2004 and completed in 2009. We use a quasi-experimental method and Annual Survey of Industrial Firms (ASIF) data from 2000 to 2009 to estimate the VAT reform's policy effects on financial constraints. We show that the VAT reform significantly improves firms' external financing capacity by decreasing borrowing costs and promoting commercial credit. The findings are robust to alternative specifications but show heterogeneity across ownerships, firm sizes, regions, and between export and non-export firms. Our analysis suggests tax deduction is useful to relax firms' financial constraints.
•We explore the causality between tax deduction and financial constraints in the context of a large developing country.•We consider both formal and informal external financial constraints.•We use quasi-experiment method by exploiting the variations of China's VAT reform.•We provide rich robustness checks and heterogeneity analysis.
Consumption tax rates targeted at specific sectors are often reformed without any empirical knowledge about the efficiency of these policies. This paper sheds light on tax incidence as well as the ...efficiency issue, the potential for welfare improving reform, by studying the impact of value added taxes (VAT) on prices and quantities of labor intensive services. I utilize a VAT reform targeted at a specific service sector, which creates a natural experiment set up. The VAT for hairdressing services in Finland was reduced from 22% to 8%, and the previous tax treatment still applied to other labor intensive services. The choice of the treatment and control groups was exogenous to circumstances in Finland, since these groups were selected from a wider European setting. The results suggest that hairdressers cut their prices only by half of what a complete pass-through would have implied, and that there was hardly any adjustment in equilibrium quantity due to the reform. Hairdressers were able to increase their profits significantly. There is important heterogeneity in the results according to firm size.
•This paper studies the efficiency of service sector consumption taxes•Utilise a Finnish VAT cut for hairdressers from 22% to 8% and a control group not facing changes in their VAT rate•VAT pass through to prices is only half of what complete pass-through would have implied•There was hardly any adjustment in the equilibrium quantity, but most hairdressers were able to increase their profits.•The results rise question marks on the efficiency of reduced VAT rates for these services
This paper aims to identify the possible factors that influence the value added tax gap – the VAT gap. The VAT gap is an estimate of the unpaid VAT in the economy, calculated as the difference ...between the theoretical obligation for the value added tax that can be collected in respect with all the transactions in the economy and the actual VAT paid to the state budget. A high value of this indicator may highlight issues related to tax evasion and the inefficiency of the tax system. The article summarizes existing studies that quantify the VAT gap and aims to identify the relationship between the VAT gap or the VAT revenues and various economic, fiscal and social factors present in EU member countries. The panel regression and clustered regression models have been used in this paper in order to determine the statistically significant variables that have an impact on the VAT gap.
This study aims to obtain empirical evidence of factors that influence VAT receipts from various aspects, including the VAT rate itself, economic factors, tax administration factors, and legal ...factors. The VAT rate factor is explained by the standard rate and implicit rate variables. Economic factors are explained by the variables of imports, the service sector, and the fiscal deficit. Administrative factors are explained by the variable c-efficiency and government effectiveness. The legal factor is explained by the variables of controlling corruption and law enforcement. This study uses secondary data with the object of research being countries in the Asian continent from 2015 to 2019. The sample countries were selected with certain considerations so that 19 sample countries were obtained. The results of this study indicate that implicit tariffs, the service sector, and government effectiveness have a significant positive effect on VAT receipts, while imports have a significant negative effect on VAT receipts. Meanwhile, standard rates, fiscal deficits, c-efficiency, corruption control, and the rule of law have no significant effect on VAT revenues.
•We study a temporary VAT reform in Belgium, which decreased the VAT rate from 21% to 6% in April 2014, followed by a VAT reinstatement at 21% in September 2015.•We estimate the VAT pass-through by a ...difference-in-differences approach that uses business electricity prices (not subject to VAT) as a control group.•The VAT pass-through to residential prices is complete both for the VAT cut and the successive VAT hike.•Studying the impact of the VAT reform on demand, we find a demand elasticity between −0.09 and −0.17, with a symmetric response to the VAT cut and the VAT hike.•Consumers reacted quickly to the VAT reform, raising questions about the salience of the VAT change and tax incidence.
In April 2014, the Belgian government reduced the VAT rate on the electricity price from 21% to 6% to support low-income families. In September 2015, the tax cut was repealed, and the VAT rate was reinstated to 21% in the context of a change of government. This paper investigates the impact of such temporary and (plausibly) exogenous VAT reform on the Belgian electricity market. We study the pass-through of the VAT reform to electricity prices and the effect of this (exogenous) price change on electricity demand. We estimate the VAT pass-through on residential electricity prices by a difference-in-differences method, using business electricity prices (not subject to VAT) as a control group. Our findings reveal that both the tax cut and the tax hike were entirely shifted to the electricity price (100% pass-through). To assess the impact of the VAT change on demand, we perform a counterfactual demand analysis of the electricity flowing monthly over the grid at the network operator level. Exploiting VAT and non-VAT related price variations, our results show a price elasticity of residential demand for electricity between -0.09 and -0.17. Interestingly, we also find that demand reacted quickly and symmetrically to the VAT cut and the subsequent VAT hike.
Stress shielding is one of the main problems that lead to bone resorption and revision surgery after implantation. Most of the commercially available metallic non-porous bone implants have a much ...greater stiffness than the native human bones and are prone to cause stress-shielding. With an open cell structure and intricate architecture, hyperbolic minimal surfaces offer several advantages such as less stress concentration, high permeability and high surface area to volume ratio, thus providing an ideal environment for cell adhesion, migration, and proliferation. This paper explores the use of porous bone implant design based on Triply Periodic Minimal Surfaces (TPMS) which is additively manufactured with ceramic material (Alumina) using Lithography-based Ceramics Manufacturing (LCM) technology. A total of 12 different primitive surface structure unit cells with pore size in the range of 500–1000 μm and porosity above 50% were considered. This is one of the earliest studies reporting the 3D printing of TPMS-based structures using ceramic material. Our results suggest that the choice of material and a porous TPMS-based design led to fabrication of structures with a much lesser compressive modulus comparable with the native bone and hence could potentially be adopted for bone implant design to mitigate the stress-shielding effect.
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•3D-printed ceramic hyperbolic surface structures exhibit Young’s modulus values between 2-5.5 GPa comparable to native bone•The open cell structure & intricate architecture offer conducive cell-microenvironment (high surface area to volume ratio)•Difficulty in slurry removal with smaller unit cell sizes (<2 mm) resulted in greater mass deviations (up to 100%)•An equation is derived to find the theoretical Young’s modulus of the printed structures for proprietary materials•A functionally-graded structure for the trochanter region of hip implant is designed to mitigate stress-shielding effects
Abstract
VAT represents one of the most important taxes in the EU; however, this tax is highly affected by tax evasion. To combat these frauds, almost all the member states have implemented ...anti-fraud measures. This article focuses on the regular reports required from VAT payers in some EU member states. This tool is called differently in various countries; this article adopts the name VAT listing. The main aim of this article is to find out whether these measures contribute to a better collection of VAT. The level of VAT collection is within the analysis expressed by the VAT gap. In the panel regression model, the effect of the introduction of VAT listings on the size of the VAT gap was determined using control variables potentially affecting the VAT gap. The results were then verified using an alternative difference-in-differences design with multiple time periods. The results showed that VAT listings reduce the value of the VAT gap, as does using of credit cards for payments and low corruption in the country. On the other hand, the implicit rate of consumption taxes, the final consumption, imports from EU countries, and the number of items in the reverse charge increase the VAT gap. (JEL codes: C33, H26)
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