DOES THE BURDEN OF CORPORATE INCOME TAX BORNE BY LABOUR THROUGH REDUCED WAGE RATES OR LABOUR HOURS, RESULTING IN A LOWER COST OF LABOUR TO THE FIRM?
Journal Title: Asian Economic and Financial Review - Year 2013, Vol 3, Issue 10
Abstract
Shareholders ability to shift the burden of the tax to the consumer or labour depends largely on the mobility of capital. If the investor can move from the corporate sector into the non corporate sector, the laws of supply and demand will cause some of the burden of the corporate income tax to be borne by others. The aim of this paper is to find out whether the burden of the corporate income tax may be borne by labour through reduced wage rates or labour hours, resulting in a lower cost of labour to the firm,using ten (10) years financial data from ten firms listed on the Ghana Stock Exchange. The result provides evidence that part of the tax burden is shifted backwards to labour. Both the actual and adjusted data used in the model confirmed the alternate hypothesis. The result also demonstrated that a 1% increment in the corporate tax would result in 11% fall in the burden of the tax on labour.
Authors and Affiliations
Desmond Tutu Ayentimi| Faculty of Economics and Business Administration, Catholic University College of Ghana, Sunyani, Fiapre, Frank Osei-Yaw| Elubo, Elubo, Western Region, Ghana
Keywords
Related Articles
- EP ID EP1960
- DOI -
- Views 505
- Downloads 23
THE IMPACT OF MATCH-FIXING SCANDALS ON THE STOCK RETURNS OF PARENT COMPANIES AND SPONSORS: EVIDENCE FROM CHINESE PROFESSIONAL BASEBALL LEAGUE IN TAIWAN
Although an increasing number of literature indicate the positive impact of sponsoring major sports events or themed competitions, few studies have examined how a match-fixing scandal occurring in the most popular and na...
FOREIGN DIRECT INVESTMENT, NON-OIL EXPORTS, AND ECONOMIC GROWTH IN NIGERIA: A CAUSALITY ANALYSIS
The study examines the contribution of Foreign Direct Investment (FDI) to the performance of non-oil exports in Nigeria within the framework of the export-led growth (ELG) hypothesis. Available evidence in Nigeria suppor...
FINANCING OBSTACLES OF BANGLADESHI FIRMS: EVIDENCE FROM PRE-CRISIS AND POST-CRISIS PERIODS
Access to finance appears to be among the most severe obstacles of the private firms? growth particularly in developing and less developed countries. Using the micro data over 1,500 enterprises, our study aims to underst...
ZAKAH AS AN ISLAMIC MICRO-FINANCING MECHANISM TO PRODUCTIVE ZAKAH RECIPIENTS
There are various forms of zakah distribution practiced by the zakah institutions. One of them is the distribution of zakah in a form of business capital given to productive zakah recipients. This form of zakah distrib...
DEPENDENCE OF REAL ESTATE AND EQUITY MARKETS IN CHINA WITH THE APPLICATION OF COPULA
This paper examines the dynamic dependence and extreme co-movements between real estate and equity markets in China. We illustrate these ideas in simple empirical settings, implementing the relatively techniques from cop...