Journal Paper

Journal Paper

CORPORATE INCOME TAX COMPETITION IN THE CARIBBEAN

Volume 4, Number 1
KOFFIE BEN NASSAR
Tax incentives
tax holidays
average effective tax rates
marginal effective tax rates
investment
Caribbean

Motivated by the concern that corporate income tax (CIT) competition may have eroded the tax base, this paper calculates average effective tax rates to measure the impact of CIT competition on the tax base for 15 countries in the Caribbean. The results not only confirm erosion of the tax base, but also show that CIT holidays must be removed for recent tax policy initiatives (such as accelerated depreciation, loss carry forward provisions, and tax harmonization) to be effective. These findings suggest that the authorities should either avoid granting CIT holidays or rely more on other taxes (including consumption taxes such as the value-added tax) in order to broaden the tax base.

Publish
Caribbean Centre for Money and Finance
2009
Trinidad and Tobago
St. Augustine

Journal of Business, Finance and Economics in Emerging Economies

Volume 4, Number 1, 2009