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The closing of tax loopholes is one important instrument for fiscal consolidation. We concentrate on the value added tax exemption of banking services in Germany. The potential tax revenue under full value added taxation cannot be estimated from national accounting data, as it is necessary to apportion the value added between final consumption and intermediate production. We develop a method which allows to base our estimates on disaggregated banks' balance sheet data and obtain an estimate for the lower bound of the net revenue loss of tax exemption to the order of 7 bill. DM in 1994.

This paper analyzes the relevance of firm losses for tax revenues and welfare when switching from separate accounting to a system of tax base consolidation with formula apportionment. We find that a system change unambiguously decreases tax revenues in the short run, in which neither firms nor governments can adjust their behavior, due to the cross-border loss offset inherent to formula apportionment. In the medium run, in which only firms can adjust their strategies, tax revenues are still lower under formula apportionment if the probability of incurring losses or the costs of profit shifting are sufficiently small. However, in the long run, where both firms and governments are able to adjust their behavior after the system change, a switch from separate accounting to formula apportionment is beneficial under the aforementioned conditions. Furthermore, we show that a higher weight of input shares in the apportionment formula may mitigate tax competition because, contrary to output factors, input factors provide an insurance against tax revenue shortfalls due to loss-making affiliates.

INTRODUCTION: Illicit cigarettes because of their affordability could increase smoking prevalence, especially among young people. They also cause a large revenue loss for the government. This study aims to estimate illicit cigarette consumption and government revenue loss in Indonesia, a country with a very high smoking prevalence, especially among males. METHODS: We estimated illicit cigarette trade in terms of volume and revenue loss. Illicit trade was estimated as the discrepancy between legal cigarette sales and domestic consumption recorded by national representative surveys. Data sources included Basic Health Research Survey, Global Adult Tobacco Survey, National Socioeconomic Survey, and data from Ministry of Finance. RESULTS: We found that illicit cigarette consumption fluctuated from 19 billion sticks in 2007 to 14 billion sticks in 2013, and sharply increased to 59 billion sticks in 2018. Relative to cigarette consumption, illicit cigarettes were the lowest at 5% in 2013 and highest at 19% of consumption in 2018 (assuming 0% underreporting). The estimated government revenue loss ranged from IDR 24.2 to 42.0 trillion (US$ 1668 to 2897 million), which corresponds to 15.8% to 27.5% of cigarette excise revenue in 2018. CONCLUSIONS: In Indonesia, illicit cigarette consumption was found to be high and increasing, which contributed to a large government revenue loss (almost onethird of tobacco excise tax revenue). To reduce illegal cigarette production and smuggling, the government should increase resources to enforce the regulation on the excise tax system including stronger penalties, especially related to illicit cigarette production.

A letter report issued by the General Accounting Office with an abstract that begins "Pursuant to a congressional request, GAO provided information on the impact of electronic commerce (e-commerce) growth on state and local government sales tax collections, focusing on: (1) how taxes associated with the sale of goods and services over the Internet differ from taxes associated with sales by other remote sellers and in-store sellers; (2) the extent to which each state relies on sales and use tax revenues to fund the services they provide; (3) how much revenue state and local governments are losing this year by not being able to collect sales and use taxes on sales made by all remote sellers and, particularly, by Internet sellers; and (4) how much revenue state and local governments would likely lose in 2003 under various growth scenarios for all remote and Internet sales."