Cash-Flow Tax

Author/Editor:

Christian Schutte ; Parthasarathi Shome

Publication Date:

January 1, 1993

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The cash-flow tax has been proposed as an alternative to corporate income tax on grounds of clarity and simplicity in defining the tax base in the face of widespread departures from the comprehensive income tax in actual practice. Variants of the tax, with their advantages and disadvantages, demonstrate that it would require careful design. Simplicity is not an obvious property because of expectable administration problems related to tax avoidance and evasion through transfer pricing; to inflation adjustments; and to incompatibility with existing international tax regimes. Thus, the tax remains theoretically attractive but difficult to implement by a single--especially developing--country.

Series:

Working Paper No. 93/2

Notes:

Also published in Staff Papers, Vol. 40, No. 3, September 1993.

English

Publication Date:

January 1, 1993

ISBN/ISSN:

9781451841688/1018-5941

Stock No:

WPIEA0021993

Format:

Paper

Pages:

30

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