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...
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Format: | Policy Research Working Paper |
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World Bank, Washington, DC
2014
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Online Access: | http://documents.worldbank.org/curated/en/2003/05/2378821/avoiding-pitfalls-taxing-financial-intermediation http://hdl.handle.net/10986/18184 |
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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 |