Avoiding the Pitfalls in Taxing Financial Intermediation

Enthusiasts for financial sector tax reform typically come either with some form of "flat tax" (including value added tax on financial services, zero taxation on capital income, or a universal transactions tax) or advocating corrective ta...

Full description

Bibliographic Details
Main Author: Honohan, Patrick
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
GDP
TAX
Online Access:http://documents.worldbank.org/curated/en/2003/05/2378821/avoiding-pitfalls-taxing-financial-intermediation
http://hdl.handle.net/10986/18184
id okr-10986-18184
recordtype oai_dc
spelling okr-10986-181842021-04-23T14:03:41Z Avoiding the Pitfalls in Taxing Financial Intermediation Honohan, Patrick ACCOUNTING ADMINISTRATIVE COSTS ARBITRAGE ASYMMETRIC INFORMATION BALANCE SHEET BANK ACCOUNTS BANK RISK BANKING CRISES BANKS BENCHMARK BORROWING CAPITAL ADEQUACY CAPITAL FLOWS CAPITAL GAINS CAPITAL TAXES CAPITALIZATION CENTRAL BANK CENTRAL BANKS CLOSED ECONOMIES COLLECTION CONTAGION CORPORATE INCOME TAX DEBT DEFICITS DEPOSIT INSURANCE DEPOSIT INSURANCE SCHEMES DEPOSITS DISINTERMEDIATION DIVIDENDS ECONOMETRIC ESTIMATES ECONOMIC ANALYSIS ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC RENT ECONOMISTS ELASTICITIES EQUITY CAPITAL EXPECTED RETURN FACTORING FINANCIAL ENGINEERING FINANCIAL INNOVATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL TRANSACTIONS FORECASTS FOREIGN EXCHANGE GDP GOVERNMENT BONDS GOVERNMENT SECURITIES GROSS REVENUE HOUSING INCOME GROUPS INCOME TAXES INDEXATION INFLATION INHERITANCE INTEREST INCOME INTEREST RATE INTEREST RATES LENDING RATES LEVIES LIQUIDITY MARKET DISCIPLINE MARKET DISTORTION MARKET POWER MONETARY POLICY MORAL HAZARD NOMINAL INTEREST RATES OPPORTUNITY COST PROPERTY OWNERSHIP PROVISIONING PROVISIONS PUBLIC SERVICES PURE PROFIT RESERVE REQUIREMENT RESERVE REQUIREMENTS RETIREMENT RISK AVERSION RISK MANAGEMENT SALES TAXES SAVINGS SIDE EFFECTS STOCK MARKETS SYSTEMIC BANKING CRISES SYSTEMIC RISK TAX TAX ADMINISTRATION TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REVENUE TAX SYSTEMS TAXATION TRADE TAXES TRANSPARENCY VALUATION WAGES WEALTH FINANCIAL INTERMEDIATION TAX ASSESSMENTS TAX REFORMS FINANCIAL SERVICES CAPITAL INCOME TAXATION REVENUE MEASURES CREDIT DEPOSIT INSURANCE FINANCIAL INTERMEDIATION WEALTH Enthusiasts for financial sector tax reform typically come either with some form of "flat tax" (including value added tax on financial services, zero taxation on capital income, or a universal transactions tax) or advocating corrective taxes designed to offset market failures or achieve other targeted objectives. As a result the tax systems in most countries often end up with a complex mixture. Honohan argues that practical policy for taxation of the financial sector needs to take into account two key features of the sector: its capacity for arbitrage and its sensitivity to inflation and thus to nonindexed taxes. Where these aspects have been neglected, poorly constructed tax systems-whether the consequence of a drive for revenue or of misdirected sophistication-often have sizable unexpected side effects. A defensive stance making the minimization of such distortions as its cornerstone is the best policy. 2014-05-05T21:47:32Z 2014-05-05T21:47:32Z 2003-05 http://documents.worldbank.org/curated/en/2003/05/2378821/avoiding-pitfalls-taxing-financial-intermediation http://hdl.handle.net/10986/18184 English en_US Policy Research Working Paper;No. 3056 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic ACCOUNTING
ADMINISTRATIVE COSTS
ARBITRAGE
ASYMMETRIC INFORMATION
BALANCE SHEET
BANK ACCOUNTS
BANK RISK
BANKING CRISES
BANKS
BENCHMARK
BORROWING
CAPITAL ADEQUACY
CAPITAL FLOWS
CAPITAL GAINS
CAPITAL TAXES
CAPITALIZATION
CENTRAL BANK
CENTRAL BANKS
CLOSED ECONOMIES
COLLECTION
CONTAGION
CORPORATE INCOME TAX
DEBT
DEFICITS
DEPOSIT INSURANCE
DEPOSIT INSURANCE SCHEMES
DEPOSITS
DISINTERMEDIATION
DIVIDENDS
ECONOMETRIC ESTIMATES
ECONOMIC ANALYSIS
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC RENT
ECONOMISTS
ELASTICITIES
EQUITY CAPITAL
EXPECTED RETURN
FACTORING
FINANCIAL ENGINEERING
FINANCIAL INNOVATION
FINANCIAL INTERMEDIARIES
FINANCIAL INTERMEDIATION
FINANCIAL MARKETS
FINANCIAL SECTOR
FINANCIAL SERVICES
FINANCIAL TRANSACTIONS
FORECASTS
FOREIGN EXCHANGE
GDP
GOVERNMENT BONDS
GOVERNMENT SECURITIES
GROSS REVENUE
HOUSING
INCOME GROUPS
INCOME TAXES
INDEXATION
INFLATION
INHERITANCE
INTEREST INCOME
INTEREST RATE
INTEREST RATES
LENDING RATES
LEVIES
LIQUIDITY
MARKET DISCIPLINE
MARKET DISTORTION
MARKET POWER
MONETARY POLICY
MORAL HAZARD
NOMINAL INTEREST RATES
OPPORTUNITY COST
PROPERTY OWNERSHIP
PROVISIONING
PROVISIONS
PUBLIC SERVICES
PURE PROFIT
RESERVE REQUIREMENT
RESERVE REQUIREMENTS
RETIREMENT
RISK AVERSION
RISK MANAGEMENT
SALES TAXES
SAVINGS
SIDE EFFECTS
STOCK MARKETS
SYSTEMIC BANKING CRISES
SYSTEMIC RISK
TAX
TAX ADMINISTRATION
TAX COLLECTION
TAX INCENTIVES
TAX RATES
TAX REFORM
TAX REVENUE
TAX SYSTEMS
TAXATION
TRADE TAXES
TRANSPARENCY
VALUATION
WAGES
WEALTH FINANCIAL INTERMEDIATION
TAX ASSESSMENTS
TAX REFORMS
FINANCIAL SERVICES
CAPITAL INCOME TAXATION
REVENUE MEASURES
CREDIT
DEPOSIT INSURANCE
FINANCIAL INTERMEDIATION
WEALTH
spellingShingle ACCOUNTING
ADMINISTRATIVE COSTS
ARBITRAGE
ASYMMETRIC INFORMATION
BALANCE SHEET
BANK ACCOUNTS
BANK RISK
BANKING CRISES
BANKS
BENCHMARK
BORROWING
CAPITAL ADEQUACY
CAPITAL FLOWS
CAPITAL GAINS
CAPITAL TAXES
CAPITALIZATION
CENTRAL BANK
CENTRAL BANKS
CLOSED ECONOMIES
COLLECTION
CONTAGION
CORPORATE INCOME TAX
DEBT
DEFICITS
DEPOSIT INSURANCE
DEPOSIT INSURANCE SCHEMES
DEPOSITS
DISINTERMEDIATION
DIVIDENDS
ECONOMETRIC ESTIMATES
ECONOMIC ANALYSIS
ECONOMIC EFFICIENCY
ECONOMIC GROWTH
ECONOMIC RENT
ECONOMISTS
ELASTICITIES
EQUITY CAPITAL
EXPECTED RETURN
FACTORING
FINANCIAL ENGINEERING
FINANCIAL INNOVATION
FINANCIAL INTERMEDIARIES
FINANCIAL INTERMEDIATION
FINANCIAL MARKETS
FINANCIAL SECTOR
FINANCIAL SERVICES
FINANCIAL TRANSACTIONS
FORECASTS
FOREIGN EXCHANGE
GDP
GOVERNMENT BONDS
GOVERNMENT SECURITIES
GROSS REVENUE
HOUSING
INCOME GROUPS
INCOME TAXES
INDEXATION
INFLATION
INHERITANCE
INTEREST INCOME
INTEREST RATE
INTEREST RATES
LENDING RATES
LEVIES
LIQUIDITY
MARKET DISCIPLINE
MARKET DISTORTION
MARKET POWER
MONETARY POLICY
MORAL HAZARD
NOMINAL INTEREST RATES
OPPORTUNITY COST
PROPERTY OWNERSHIP
PROVISIONING
PROVISIONS
PUBLIC SERVICES
PURE PROFIT
RESERVE REQUIREMENT
RESERVE REQUIREMENTS
RETIREMENT
RISK AVERSION
RISK MANAGEMENT
SALES TAXES
SAVINGS
SIDE EFFECTS
STOCK MARKETS
SYSTEMIC BANKING CRISES
SYSTEMIC RISK
TAX
TAX ADMINISTRATION
TAX COLLECTION
TAX INCENTIVES
TAX RATES
TAX REFORM
TAX REVENUE
TAX SYSTEMS
TAXATION
TRADE TAXES
TRANSPARENCY
VALUATION
WAGES
WEALTH FINANCIAL INTERMEDIATION
TAX ASSESSMENTS
TAX REFORMS
FINANCIAL SERVICES
CAPITAL INCOME TAXATION
REVENUE MEASURES
CREDIT
DEPOSIT INSURANCE
FINANCIAL INTERMEDIATION
WEALTH
Honohan, Patrick
Avoiding the Pitfalls in Taxing Financial Intermediation
relation Policy Research Working Paper;No. 3056
description Enthusiasts for financial sector tax reform typically come either with some form of "flat tax" (including value added tax on financial services, zero taxation on capital income, or a universal transactions tax) or advocating corrective taxes designed to offset market failures or achieve other targeted objectives. As a result the tax systems in most countries often end up with a complex mixture. Honohan argues that practical policy for taxation of the financial sector needs to take into account two key features of the sector: its capacity for arbitrage and its sensitivity to inflation and thus to nonindexed taxes. Where these aspects have been neglected, poorly constructed tax systems-whether the consequence of a drive for revenue or of misdirected sophistication-often have sizable unexpected side effects. A defensive stance making the minimization of such distortions as its cornerstone is the best policy.
format Publications & Research :: Policy Research Working Paper
author Honohan, Patrick
author_facet Honohan, Patrick
author_sort Honohan, Patrick
title Avoiding the Pitfalls in Taxing Financial Intermediation
title_short Avoiding the Pitfalls in Taxing Financial Intermediation
title_full Avoiding the Pitfalls in Taxing Financial Intermediation
title_fullStr Avoiding the Pitfalls in Taxing Financial Intermediation
title_full_unstemmed Avoiding the Pitfalls in Taxing Financial Intermediation
title_sort avoiding the pitfalls in taxing financial intermediation
publisher World Bank, Washington, DC
publishDate 2014
url http://documents.worldbank.org/curated/en/2003/05/2378821/avoiding-pitfalls-taxing-financial-intermediation
http://hdl.handle.net/10986/18184
_version_ 1764439105566932992