Towards a Truthful Land Taxation Mechanism in Brazil
نویسندگان
چکیده
This paper shows that the asymmetric information present in the relationship between the government and agricultural producers has led to persistent problems in the application of land taxes (Imposto Territorial Rural – ITR) in Brazil. The main result is that, when the asymmetric information is taken into account, some use of output taxes in the optimal tax scheme may be more desirable than a pure land tax regime. Herein, we consider a model of optimal taxation in which the government maximizes the expected tax revenue less the farmer’s yields from a non-agricultural activity. There is a continuum of farmers using land to produce a homogeneous agricultural output and for non-productive ends. They have private information on the parameters of both activities. Also, there is no land rental market, and the harvested area cannot exceed the farm size. We show that a pure land tax regime is optimal only if there is complete information or there is no idle land in equilibrium. A composite tax mechanism, which simultaneously considers taxes on land and output, can be used to implement the optimal scheme in the case of incomplete information. Nowadays, the ITR rate is a function of the degree of use, which is not observed by the government, and farm size. Our study implies that ITR rate should depend on farm size and the ICMS (Value-added tax on sales and services) per hectare, which is a reliable proxy for land use.
منابع مشابه
A truthful Screening Mechanism for Improving Information Asymmetry in Initial Public Offering Transactions
متن کامل
Mechanisms for Risk Averse Agents, Without Loss
Auctions in which agents’ payoffs are random variables have received increased attention in recent years. In particular, recent work in algorithmic mechanism design has produced mechanisms employing internal randomization, partly in response to limitations on deterministic mechanisms imposed by computational complexity. For many of these mechanisms, which are often referred to as truthful-in-ex...
متن کاملThe Vanishing Bequest Tax: The Comparative Evolution of Bequest Taxation in Historical Perspective
The Vanishing Bequest Tax: The Comparative Evolution of Bequest Taxation in Historical Perspective Several countries have recently abolished or significantly reduced their taxes on bequests. Bequest taxes, on the other hand, were among the first to be introduced when modern systems of taxation were developed at the end of the nineteenth century. We propose an explanation for these facts which i...
متن کاملChallenges and Prospects for Integrating the Assessment of Health Impacts in the Licensing Process of Large Capital Project in Brazil
Brazil was one of the first countries in Latin America to institutionalize a National Environmental Policy in 1981, including the environmental impact assessment (EIA) process of economic activities with anticipated impacts on the environment. Today, EIA practice in Brazil comes with a number of limitations: it is constrained by its environmental advocacy role; application is strongly oriented ...
متن کاملRwanda’s urban transition and the RPF political settlement: Expropriation, construction and taxation in Kigali
Although still predominantly rural, Rwanda is one of the world’s fastest-urbanising countries. This paper considers the Rwandan Patriotic Front’s approach to urban development in the context of intense pressure on land and a stated long-term agenda of moving towards a future that is ‘100% urban’. The RPF government has won plaudits for its transformation of Kigali, and its Land Tenure Regularis...
متن کامل