Rates of return, taxation, and the economic cost of capital in Uruguay.

摘要

This study provides an analytical framework for and practical application to the estimation of the rate of return capital, the marginal effective tax rate, and the economic opportunity cost of capital. It calculates the rates of return on assets and equity, and the effective tax rates of capital for Uruguay during the period of 1993–1997. These estimates, coupled with additional information, are used to calculate the economic opportunity cost of capital (EOCK) for this small open economy, to analyze the determinants of the effective tax rates of capital, and to test whether inter-firm factors were more or less important that inter-industry factors.;The thesis applies two estimation techniques to compute the economic return on assets (the productivity of capital). The first is supported by a tax return sample of 2,368 firms for five years (1993–1997). The second is based on national accounting data, complemented with private surveys and other public information, for a longer period of time (1971–1997). The estimates of the rates of return for private reproducible capital under both approaches statistically converge: the results are significantly close, at 12.7% with micro data, and 12.0% at macro level. The study also finds that the average real rates of return on equity in the financial and non financial sectors of the Uruguayan economy during 1993–1997 were fairly close at 22.5% and 25.4%, respectively. The estimate of the economic rate of return is 11.2%. The results of the sensitivity test on the two parameters—the elasticity of the marginal productivity of capital and the one of foreign savings—the EOCK demonstrates that the EOCK fluctuates less than 8% over their plausible range.;In terms of the effective rate of taxation, the direct tax-to-reproducible assets ratios for the period (1993–1997) estimated at micro and macro level converge, on average, at 2.3% and 2.4%, respectively. Contrary to general belief, it clearly shows that state-owned legal monopolies pay less income and net wealth taxes than those in the private sector. Additionally, it confirms that the corporate income tax burden on equity for the aggregate non financial sectors converges on 3.5% while the financial sector only contributes with a 0.1% due to tax incentives for the five years of the study.;Finally, the results of an econometric exercise reveal that the taxes paid on different types of assets depend on the specific features of the firm being considered. This differs to what is established under the marginal effective tax rate theory, which assumes given and uniform rates of return for each type of asset.