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Reproducibility package for VAT Refunds and Firms’ Performance: Evidence from a Withholding Reform in Honduras

2024
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Reference ID
RR_HND_2024_208
DOI
https://doi.org/10.60572/05zp-sw96
Author(s)
David Pineda Pinto, Jose Carlo Bermúdez, Thiago Scot
Collections
World Bank Policy Research Working Papers
Metadata
JSON
Created on
Nov 04, 2024
Last modified
Nov 11, 2024
  • Overview
  • Reproducibility Package
  • Description
  • Scope and coverage
  • Disclaimer
  • Access and rights
  • Contacts
  • Information on metadata
  • Citation

    • Overview

    Abstract

    Late or unreliable refunds of credits undermine the best traits of Value-Added Tax (VAT) systems and might affect firms’ growth and investment opportunities. In this paper, we use administrative tax records in Honduras to study a tax reform that decreased the withholding rate of VAT liabilities by credit card providers, with the goal of curbing unrefunded credits. Using a differences-in-differences approach exploiting differential exposure to the reform, we document that it caused a decrease in excessive withholding and was equivalent to a cut in effective tax rates faced by treated firms. We then evaluate the effects on firms’ economic performance and estimate null effects on several indicators of economic growth and investment. Our results challenge the premise that unrefunded VAT credits are an important constraint to firm growth in certain settings.

    Reproducibility Package

    Scripts
    Get Reproducibility Package
    Title
    Reproducibility package (partial data and code) for VAT refunds and firms’ performance: Evidence from a withholding reform in Honduras
    Date
    2024-10
    Dependencies
    All dependencies are stored in the ado folder.
    Notes
    Computational reproducibility verified by Development Impact (DIME) Analytics team, World Bank.
    Source code repository
    Repository name URI
    Reproducible Research Repository (World Bank) https://reproducibility.worldbank.org
    Software
    Name
    Stata
    Version
    18 MP

    Reproducibility

    Technology environment

    Paper exhibits were reproduced in a computer with the following specifications:
    – OS: Windows 11 Enterprise
    – Processor: Intel(R) Core(TM) i5-1145G7 CPU @ 2.60GHz
    – Memory available: 15.7 GB
    – Software version: Stata version 18.0 MP
    Technology requirements

    ~1 hour
    Reproduction instructions

    Access to some of the data required to reproduce this project is restricted. If users gain access to the restricted data, they can reproduce the results by following these steps:

    1. Store the data files in the Data/rawdata folder, ensuring that the filenames match those mentioned in the README.
    2. Update the file path in the main do-file.
    3. Run the main do-file.

    Data

    Datasets
    Name
    Administrative tax data
    Note
    Source: Honduran tax authority, Servicio de Administración de Rentas (SAR) Located at: \Data\rawdata\ Base_IM_ATC_CGIT_IT_AE1.dta, Base_Mensual_ISV_201101_201912.dta, Base_Mensual_SER_201101_201912.dta, ISRPN11_20_initialclean.dta, Recaudación_ISV_2016-2019.dta, risk_score.dta The data were made available exclusively for this research project through the corresponding author and government agency collaboration agreements. The authors can provide access for replication purposes of this study (conditional on the signing of a confidentiality agreement and a security agreement). Individuals interested in accessing the data for replication purposes can contact Thiago Scot (tscot@worldbank.org). Researchers interested in obtaining the data for their own analyses can directly contact SAR.
    Access policy
    Restricted and not included in the package.
    Name
    B-Ready data on VAT delays
    Note
    Source: World Bank Enterprise Surveys Located at: rawdata\Bready.xlsx
    Access policy
    Publicly available and included in the reproducibility package
    Data URL
    https://www.enterprisesurveys.org/en/data/exploretopics/taxes
    Name
    TADAT data
    Note
    Source: Tax administration Diagnostic Assessment Tool (TADAT) Located at: Data/rawdata/base_TADAT.xlsx
    Access policy
    Publicly available and included in the reproducibility package
    Data URL
    https://www.tadat.org/
    Data statement

    Some data is restricted and has not been included in the reproducibility package. For more details, please refer to the README file.

    Description

    Output
    Type
    Working Paper
    Title
    VAT Refunds and Firms’ Performance: Evidence from a Withholding Reform in Honduras
    Authors
    David Pineda Pinto, Jose Carlo Bermúdez, Thiago Scot
    Authors
    Author Affiliation Email
    David Pineda Pinto Utah State University david.pineda@usu.edu
    Jose Carlo Bermúdez World Bank jcbermudez@uc.cl
    Thiago Scot World Bank tscot@worldbank.org
    Date of production

    2024-11

    Scope and coverage

    Geographic locations
    Location Code
    Honduras HND
    Keywords
    VAT refunds withholding firms’ performance
    Topics
    ID Topic Parent topic ID Vocabulary Vocabulary URI
    H20 General H2 Journal of Economic Literature (JEL)
    H27 Other Sources of Revenue H2 Journal of Economic Literature (JEL)
    H32 Firm H3 Journal of Economic Literature (JEL)

    Disclaimer

    Disclaimer

    The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.

    Access and rights

    License
    Name URI
    Modified BSD3 https://opensource.org/license/bsd-3-clause/

    Contacts

    Contacts
    Name Affiliation Email
    Jose Carlo Bermudez World Bank jcbermudez@uc.cl
    Reproducibility WBG World Bank reproducibility@worldbank.org

    Information on metadata

    Producers
    Name Abbreviation Affiliation Role
    Reproducibility WBG DIME World Bank - Development Impact Department Verification and preparation of metadata
    Date of Production

    2024-10-30
    Document version

    1

    Citation

    Citation
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