Junhyung Park's Books

Strategies for Fiscal Consolidation in the Post-Crisis World

By: Mr.Mauricio Villafuerte,Ms.Cemile Sancak,Jan Gottschalk,S. M. Ali Abbas,Olivier Basdevant,Ricardo Velloso,Fuad Hasanov,Greetje Everaert,Stephanie Eble,Junhyung Park

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Strategies for Fiscal Consolidation in the Post-Crisis World

By: Mr.Mauricio Villafuerte,Ms.Cemile Sancak,Jan Gottschalk,S. M. Ali Abbas,Olivier Basdevant,Ricardo Velloso,Fuad Hasanov,Greetje Everaert,Stephanie Eble,Junhyung Park

In response to the global financial crisis, governments provided substantial support to the financial and other key sectors. Although this cushioned the adverse effects of the crisis, it is necessary now to articulate a strategy to ensure the sustainability of public finances. This paper discusses the scale and composition of fiscal adjustment that will need to occur once the recovery is securely under way. Although specific country-level circumstances will influence the composition of the adjustment and its political feasibility, in many cases restoring fiscal sustainability will require reforms to reduce spending and increase tax revenue.

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International Monetary Fund

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ISBN 10

1589069374

ISBN 13

9781589069374

A Partial Race to the Bottom

Corporate Tax Developments in Emerging and Developing Economies

By: S. M. Ali Abbas,Mr.Alexander Klemm,Mr.Sukhmani Bedi,Junhyung Park

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A Partial Race to the Bottom

Corporate Tax Developments in Emerging and Developing Economies

By: S. M. Ali Abbas,Mr.Alexander Klemm,Mr.Sukhmani Bedi,Junhyung Park

This paper assembles a new dataset on corporate income tax regimes in 50 emerging and developing economies over 1996-2007 and analyzes their impact on corporate tax revenues and domestic and foreign investment. It computes effective tax rates to take account of complicated special regimes, such as partial tax holidays, temporarily reduced rates and increased investment allowances. There is evidence of a partial race to the bottom: countries have been under pressure to lower tax rates in order to lure and boost investment. In the case of standard tax systems (i.e. tax rules applying under normal circumstances), the effective tax rate reductions have not been larger than those witnessed in advanced economies, and revenues have held up well over the sample period. However, a race to the bottom is evident among special regimes, most notably in the case of Africa, creating effectively a parallel tax system where rates have fallen to almost zero. Regression analysis reveals higher tax rates adversely affect domestic investment and FDI, but do raise revenues in the short-run.

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