Follow us
Publications Commentary Research People Events News Resources and Videos About IFS
Home Publications Effective tax rates and firm size: the case of the Dominican Republic

Effective tax rates and firm size: the case of the Dominican Republic

Pierre Bachas, Anne Brockmeyer, Roel Dom and Camille Semelet
External publication

Do some firms pay more corporate taxes than others? If so, which types of firms benefit from a reduced tax burden, and how do they achieve this reduction? Are differences in tax rates due to the design of the tax system, to strategic tax planning or to differential enforcement? These questions matter for tax design and are difficult to answer in an empirically founded and comprehensive manner. We use administrative tax data in many countries to systematically calculate firm-level effective tax rates (ETRs) and study how ETRs vary across the firm size distribution. This note shows the results for the Dominican Republic, where the corporate statutory tax rate is 27% in 2015. We find that the ETR averages 16% across all firms, increases over the firm-size distribution, and decreases at the top for the largest firms.

More on this topic

IFS Working Paper W22/25
We develop a model demonstrating that in-kind transfers are welfare improving to beneficiaries relative to cash if the covariance between the marginal utility of income and price is positive.
IFS Working Paper W22/18
We study how social proximity between the sender and the receiver of information shapes the effectiveness of preventive health behaviour campaigns and the persistence of misinformation.
IFS Working Paper W22/16
This paper provides novel evidence on the trade-off between public service delivery and free riding in low- and middle-income countries.