An analysis of the corporate income tax policy of less developed countries


Baker, P. L., 2016. Forthcoming. An analysis of the corporate income tax policy of less developed countries. Scandinavian Journal of Economics

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Unlike developed countries, corporate tax rather than personal tax revenues are the greater source of public finance for less developed countries (LDCs). This paper analyses the corporate income tax policy for a large panel of LDCs over the period 1980 – 2006. The analysis shows that although the corporate tax rate has been decreasing in LDCs, corporate tax revenues have been increasing as a percentage of total tax revenues and GDP. Contrary to standard tax competition theory, there is also strong evidence that corporate income taxes in LDCs are increasing in the country’s openness as measured by capital mobility. The analysis also shows that the corporate tax rate is increasing in the personal tax rate as income-shifting theory predicts. However this has not translated into increased corporate tax revenues. Of equal interest is the lack of evidence of a relationship between the LDC’s government revenue needs and its corporate tax rate.


Item Type Articles
CreatorsBaker, P. L.
Uncontrolled Keywordssustainability,corporate tax rates,corporate tax revenue,less developed countries
DepartmentsSchool of Management
Research CentresCentre for Business, Organisations and Society (CBOS)
StatusIn Press
ID Code53611


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