Abstract
This study examines the impact of the tax reform on corporate effective tax rate (ETR) and firm-specifics in Tunisia for the post tax reform period (after the fiscal year 2014). The corporate effective tax rate is a component by major firm-specific characteristics, especially firm size, capital structure (leverage), inventory intensity, capital intensity… The ETR provides information about the tax burdens and can be used as a political instrument to boost the economic reliance. The post tax reform period reflects the impact of lower corporate tax rate on the firm characteristics. The sample consists of 112 firm-year observations from 16 listed companies in Tunis Stock Exchange (known Bourse de Tunis- BVMT) covering seven years from 2010 to 2016.Our result indicates that the tax reform had a significant impact only on the inventory variable but no significant results on the others firm characteristics for the post-tax reform period. These findings urge the Tunisian’s tax authority to reformulate the corporate tax system.
Highlights
The researchers are recognizing that the Tunisian corporate tax system is a major barrier to economic growth by the tax burden on companies (Alm, 2015)
The Tunisian’s tax reform, related to the Finance Law for the year 2014, is an occasion to test the efficiency of the tax policy on the corporate economy and finance, by the assessing of corporate effective tax rate (ETR) on the firm characteristics
For example the dependant variable RD has a significant link to the ETR only in the pre-tax reform
Summary
The researchers are recognizing that the Tunisian corporate tax system is a major barrier to economic growth by the tax burden on companies (Alm, 2015). According to Alm (2015), the object of the corporate tax reform should be to create a system that has an efficient and competitive tax rate. The corporate tax rate reduction was carried out by two categories (from 30% to 25% for the companies listed before 2014, from 25% to 20% for the new listings companies), the increasing of the Minimum Tax (MT) from 0.1% to 0.2% of the total gross turnover and 0.1% of the turnover from exports. The Tunisian’s tax reform, related to the Finance Law for the year 2014, is an occasion to test the efficiency of the tax policy on the corporate economy and finance, by the assessing of corporate ETR on the firm characteristics
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