Technical Notes and Manuals

Estimating the Corporate Income Tax Gap: The RA-GAP Methodology

By Junji Ueda

September 12, 2018

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Junji Ueda. Estimating the Corporate Income Tax Gap: The RA-GAP Methodology, (USA: International Monetary Fund, 2018) accessed November 8, 2024

Disclaimer: This Technical Guidance Note should not be reported as representing the views of the IMF. The views expressed in this Note are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The IMF Fiscal Affairs Department's Revenue Administration Gap Analysis Program (RA-GAP) aims to provide a quantitative analysis of the tax gap between potential revenues and actual collections, and this technical note explains the concept of the tax gap for corporate income tax (CIT), and the methodology to estimate CIT gaps. It includes detailed steps to derive the potential CIT base and liability with careful consideration for the theoretical differences between the coverage of statistical macroeconomic data and the actual tax base of CIT, and then compare the estimated results with actual declarations and revenues. Although the estimated gaps following the approach will have margins of errors, it has the advantage of using available data without additional costs of collection and suits initial evaluations of overall CIT noncompliance in a country.

Subject: Business enterprises, Corporate income tax, Economic sectors, Fiscal accounting and reporting, National accounts, Personal income, Public financial management (PFM), Taxes

Keywords: Business enterprises, CIT base, CIT collection gap, CIT credit, CIT efficiency ratio, CIT gap, CIT legislation, CIT liability, CIT noncompliance, CIT payment, CIT Policy gap, Corporate Income Tax, Fiscal accounting and reporting, Personal income, Tax Compliance, Tax Evasion, Tax Gap, Taxable income, TNM

Publication Details

  • Pages:

    36

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Technical Notes and Manuals No. 2018/002

  • Stock No:

    TNMEA2018002

  • ISBN:

    9781484357224

  • ISSN:

    2075-8669

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