The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries

The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries

How is the COVID-19 pandemic affecting firm profits and tax payments in developing countries? This paper uses administrative corporate tax records from 10 low- and middle-income countries around the world to provide plausible estimates. Modeling th...

Full description

Bibliographic Details
Main Authors: Bachas, Pierre, Brockmeyer, Anne, Semelet, Camille
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2020
Subjects:
CORONAVIRUS
COVID-19
PANDEMIC IMPACT
FIRM PERFORMANCE
CORPORATE INCOME TAX
WAGE SUBSIDY
ADMINISTRATIVE TAX DATA
LOCKDOWN
REVENUE SHOCK
FIRM EXIT RATE
Online Access:http://documents.worldbank.org/curated/en/432861602682833105/The-Impact-of-COVID-19-on-Formal-Firms-Micro-Tax-Data-Simulations-across-Countries
http://hdl.handle.net/10986/34632
id okr-10986-34632
recordtype oai_dc
spelling okr-10986-346322022-09-20T00:10:16Z The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries Bachas, Pierre Brockmeyer, Anne Semelet, Camille CORONAVIRUS COVID-19 PANDEMIC IMPACT FIRM PERFORMANCE CORPORATE INCOME TAX WAGE SUBSIDY ADMINISTRATIVE TAX DATA LOCKDOWN REVENUE SHOCK FIRM EXIT RATE How is the COVID-19 pandemic affecting firm profits and tax payments in developing countries? This paper uses administrative corporate tax records from 10 low- and middle-income countries around the world to provide plausible estimates. Modeling the lockdown-triggered revenue shock with simple and transparent assumptions, the analysis predicts that less than half of all firms will remain profitable by the end of 2020, about 5-10 percent of the formal aggregate annual payroll will be lost, and firm exit rates will double. As a result, it is expected that tax revenue remitted by the corporate sector will fall by at least 1.5 percent of baseline gross domestic product. Differences in sectoral composition and firms' cost structures generate heterogeneity in the results across countries: wage subsidies are less effective in low-income countries and government revenue losses are smaller. 2020-10-16T19:52:57Z 2020-10-16T19:52:57Z 2020-10 Working Paper http://documents.worldbank.org/curated/en/432861602682833105/The-Impact-of-COVID-19-on-Formal-Firms-Micro-Tax-Data-Simulations-across-Countries http://hdl.handle.net/10986/34632 English Policy Research Working Paper;No. 9437 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CORONAVIRUS
COVID-19
PANDEMIC IMPACT
FIRM PERFORMANCE
CORPORATE INCOME TAX
WAGE SUBSIDY
ADMINISTRATIVE TAX DATA
LOCKDOWN
REVENUE SHOCK
FIRM EXIT RATE
spellingShingle CORONAVIRUS
COVID-19
PANDEMIC IMPACT
FIRM PERFORMANCE
CORPORATE INCOME TAX
WAGE SUBSIDY
ADMINISTRATIVE TAX DATA
LOCKDOWN
REVENUE SHOCK
FIRM EXIT RATE
Bachas, Pierre
Brockmeyer, Anne
Semelet, Camille
The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries
relation Policy Research Working Paper;No. 9437
description How is the COVID-19 pandemic affecting firm profits and tax payments in developing countries? This paper uses administrative corporate tax records from 10 low- and middle-income countries around the world to provide plausible estimates. Modeling the lockdown-triggered revenue shock with simple and transparent assumptions, the analysis predicts that less than half of all firms will remain profitable by the end of 2020, about 5-10 percent of the formal aggregate annual payroll will be lost, and firm exit rates will double. As a result, it is expected that tax revenue remitted by the corporate sector will fall by at least 1.5 percent of baseline gross domestic product. Differences in sectoral composition and firms' cost structures generate heterogeneity in the results across countries: wage subsidies are less effective in low-income countries and government revenue losses are smaller.
format Working Paper
author Bachas, Pierre
Brockmeyer, Anne
Semelet, Camille
author_facet Bachas, Pierre
Brockmeyer, Anne
Semelet, Camille
author_sort Bachas, Pierre
title The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries
title_short The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries
title_full The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries
title_fullStr The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries
title_full_unstemmed The Impact of COVID-19 on Formal Firms : Micro Tax Data Simulations across Countries
title_sort impact of covid-19 on formal firms : micro tax data simulations across countries
publisher World Bank, Washington, DC
publishDate 2020
url http://documents.worldbank.org/curated/en/432861602682833105/The-Impact-of-COVID-19-on-Formal-Firms-Micro-Tax-Data-Simulations-across-Countries
http://hdl.handle.net/10986/34632
_version_ 1764481316363960320

Similar Items