| Popis: |
This paper analyses the impact of the corporate tax reform introduced in Italy in early 2004 on firms’ tax burden with respect to 2001 tax legislation. For this purpose we build a microsimulation model reproducing in detail the Italian corporate tax system under the two regimes. The model is based on an integrated dataset combining ISTAT (National Institute for Statistics) survey data on firms and compan y accounts for the year 2000. The results show that the mean ex-post implicit tax rate increases by 0.26 percentage points, although for firms belonging to groups and opting for tax consolidation the implicit tax rate falls by 1.18 percentage points, demonstrating that groups are favoured by the new system. We also examine the features of both regimes concerning neutrality over company funding decisions. To this end, we develop a sensitivity analysis in which we consider two scenarios in terms of company financial policy (debt, internal sources) and, using the microsimulation tool, compute implicit tax rates in each regime. We find that the new regime widens the distortion in favour of debt an can thus be regarded as less efficient than the previous system. |
