Modelling direct and indirect taxes on firms: a policy simulation

• Main Authors: Rossella Bardazzi, Valentino Parisi, Maria Grazia Pazienza
• Format: Article
• Language: English
• Published: Austrian Statistical Society 2016-04-01
• Series: Austrian Journal of Statistics
• Online Access: http://www.ajs.or.at/index.php/ajs/article/view/440

In this paper we develop a microsimulation model for the business sector. The model is based upon an integrated dataset built at ISTAT (Italian Institute of Statistics). This dataset combines survey data and published account data for corporations. The model reproduces the Italian tax system on firms (corporate tax, regional tax on economic activity and social contributions) from the year 1998 onwards. We run the model to study the effects of the fiscal changes established in recent years by the Italian government. For this purpose we estimate ex-post implicit tax rates and consider two policy scenarios: the first analyses the impact of the tax changes approved in the period 1998-2001, while the second scenario analyses the effects of the tax reform recently introduced by the government. Simulation output includes tax due for every firm both in the baseline scenario and under the reformed regime as well as estimates of effective tax rates disaggregated by sectors, size and other characteristics.