corporate income tax analysis - mostafa askari, canada
TRANSCRIPT
Corporate Income Tax Analysis
April 12, 2016
OECD PBO-IFI Meeting, Paris, April 11-12 2016
The Canadian PBO
Source: The Parliament of Canada Act
Federal Corporate Income Tax
Source: Fiscal Reference Tables, Government of Canada
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1983-84 1986-87 1989-90 1992-93 1995-96 1998-99 2001-02 2004-05 2007-08 2010-11 2013-14
$Billions (LHS) % of GDP (RHS)
Forecasting Challenges
Source: Parliamentary Budget Officer, Government of Canada
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2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Forecast Actual
Information Request
Request to Canadian Revenue Agency (March 4, 2010) Pursuant to statutory authority granted to me under section 79.3(1) of the Parliament of Canada Act, I am requesting a copy of the database prepared by CRA’s Statistics Division for Finance Canada’s microsimulation model of Canadian federal corporate income tax system. I have received several requests from parliamentarians regarding the costs of amending certain aspects of the corporate income tax system, which I am currently unable to properly assess owing to a lack of data. This database will also be useful in improving the quality of the fiscal analysis prepared by my staff
and presented to Parliament .
Response (March 29, 2010) You have requested the data under the authority of section 79.3(1) of the Parliament of Canada Act, which provides access to your officials of any financial or economic data in the possession of a department. However, that access is limited when disclosure is restricted by an Act listed in Schedule II of the Access to Information Act. Your request contains taxpayer information for the purposes of section 241 of the Income Tax Act, which is listed in Schedule II, and, therefore, cannot be released.
Six Years of Sporadic Negotiation
Source: Office of the Parliamentary Budget Officer
Dozens: of Pieces of Correspondence
Hundreds: of Hours of Meetings
Thousands: of Dollars Spent
Alternate Approach to Data Access
• Memorandum of Understanding with National Statistics Agency
o Governs data access, confidentiality, code of conduct
• Access confidential returns data through research program at Statistics Canada
o Pay for data access and support work
o PBO staff work onsite as “deemed employees”
o Statistics Canada approves all outputs
• Ongoing technical dialogue with Finance Canada
• Microsimulation model to cost changes to corporate income tax system
• Capacity to answer key policy questions
o General & small business income tax rates
o Public support for R&D activities and resource sector
o Business investment incentives
o Impact of policy changes on future revenues
• Further work to focus on integrating behavioural decisions
Work Underway – Microsimulation Model
Work Underway – Revenue Forecasting
• Microdata refined approach to forecasting government revenues
• Holistic: build on macro approach using microdata
o Disaggregate tax base and effective rates (ER); grow base using for profit projections; etc.
o Apply policy changes to base and ER using model
• Use input-output tables to estimate value-added tax (VAT) revenue
o Measure the “tax gap” for VAT
o Estimate the size of the “underground economy” and eventually income tax gap
• Sometimes the data “owner” is not the best source
• Modeling corporate income tax revenues is complicated, but feasible for small organizations
Bottom Lines
THANK YOU!
Contact Information: Mostafa Askari,Assistant Parliamentary Budget Officer