Taxation

Excessive tax burden, especially if combined with a complex regulatory system and badly co-ordinated institutions make taxation inefficient and unable to fulfill its aims. At the extreme, it can severely discourage investment and engender counter-productive incentives to evade the tax system. ECOPA provides assistance to tax administrations and revenue agencies to assess and improve the competitiveness of their tax codes and enhance taxpayer compliance. ECOPA economists’ toolbox covers these aspects of taxation analysis:

• Marginal Effective Tax Rates (METR): Measuring the fiscal burden - ECOPA uses the METR to provide expert modelling of the tax burden that companies are subject to. In the fierce competition for foreign investment, the METR is an insightful indicator of a country’s tax system competitiveness.

• OPTAX: Determining the optimal tax regime - OPTAX is a modelling framework for applied taxation analysis developed by ECOPA. Based on detailed calibration of a computable general equilibrium model to the characteristics of the country under analysis, OPTAX calculates the optimal tax structure for that country.