Research

Working Papers

Effective Tax Rates and Firm Size
(with Pierre Bachas, Anne Brockmeyer and Roel Dom)

^{Presented at the 4th World Bank Tax Conference (Video), the 2022 Annual Congress of the IIPF, and the PSE workshop in International Trade. Coverage from UCL Stone Centre. Replication code here.}

This paper provides novel evidence on the relationship between firm size and effective corporate tax rates, using full-population administrative tax data from 13 countries. In all countries, small firms face lower effective corporate tax rates than mid-sized firms due to reduced statutory tax rates and a higher propensity to register losses. In most countries, effective corporate tax rates fall for the largest firms due to the take-up of tax incentives. As a result, a third of the top 1 percent of firms face effective corporate tax rates below the global minimum tax of 15 percent. The minimum tax could raise corporate tax revenue by 27 percent in the median sample country.

The Impact of COVID-19 on Formal Firms: Lessons from Administrative Tax Data
(with Pierre Bachas, Anne Brockmeyer and Pablo Garriga)

Revise & Resubmit, Journal of Development Economics

^{Presented at the 2021 Annual Congress of the IIPF. Coverage from the Economics Observatory and UCL Stone Centre. Replication code here.}

Most low-income countries lack high-frequency firm-level data to monitor the effect of economic shocks in real time. We examine whether administrative tax data can help fill this gap, in the context of the COVID-19 pandemic. In spring 2020, we used the full population of corporate tax returns for 2019 in six developing countries to predict the effect of COVID-induced shocks on formal firms' activity. Comparing the predictions to the realized 2020 data, we find that firms were more resilient than predicted: the share of unprofitable firms increased by only 7 percentage points, while aggregate profits and taxes paid remained stable. The simulations failed to anticipate that labor and capital inputs would flexibly adjust and that large firms would be very resilient. Complementing our simulations with higher-frequency VAT data would have markedly improved predictions.

Work in Progress

Does the Global Minimum Tax Target the Aggresive Tax Planners?
(with Sarah Clifford and Jakob Miethe)

Corporate Taxes and Economic Activity at Home and Abroad
(with Sarah Clifford, Gerwin Kiessling and Jakob Miethe)