EFFECTIVE TAX BURDEN BORNE BY COMPANIES: A REVIEW AND A NEW METHODOLOGY

Abstract

Measuring the effective tax burden of companies was appealing to many famous economists. The present paper makes a review of the methodology used in assessing the tax burden of companies, and starting from this point, proposes a new framework based on micro backward-looking methodology, which extends the fiscal variables taken into account by considering the tax savings generated by alternative ways of personnel remuneration such various vouchers granted to employers. This line of research is in accordance with the extension of tax incentives granted to companies that lower the fiscal burden, but are not taken into consideration when computing the effective tax rate borne by companies. Some partial results of the research show that the magnitude of such tax incentives can be quite significant, but the research has to be extended to a larger sample of firms.

Keywords

• effective tax burden
• micro backward-looking methodology
• alternative ways of personnel remuneration