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Intended and unintended consequences of anti-avoidance rules: Evidence from Uganda

Author

Listed:
  • Muhammad Bashir
  • Usama Jamal
  • Kyle McNabb
  • Mazhar Waseem

Abstract

Aggressive profit shifting by multinational enterprises (MNEs) is a growing concern for domestic resource mobilization in developing economies. This paper evaluates the revenue and welfare consequences of a flagship tax avoidance rule that has been implemented in more than 45 countries to prevent profit shifting by MNEs through the debt channel. Our focus is Uganda, a representative developing country that implemented the rule in 2018.

Suggested Citation

  • Muhammad Bashir & Usama Jamal & Kyle McNabb & Mazhar Waseem, 2024. "Intended and unintended consequences of anti-avoidance rules: Evidence from Uganda," WIDER Working Paper Series wp-2024-70, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2024-70
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    References listed on IDEAS

    as
    1. Thomas Tørsløv & Ludvig Wier & Gabriel Zucman, 2023. "The Missing Profits of Nations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(3), pages 1499-1534.
    2. Anca D. Cristea & Daniel X. Nguyen, 2016. "Transfer Pricing by Multinational Firms: New Evidence from Foreign Firm Ownerships," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 170-202, August.
    3. Katarzyna Anna Bilicka, 2019. "Comparing UK Tax Returns of Foreign Multinationals to Matched Domestic Firms," American Economic Review, American Economic Association, vol. 109(8), pages 2921-2953, August.
    4. Wier, Ludvig, 2020. "Tax-motivated transfer mispricing in South Africa: Direct evidence using transaction data," Journal of Public Economics, Elsevier, vol. 184(C).
    5. Buettner, Thiess & Overesch, Michael & Schreiber, Ulrich & Wamser, Georg, 2012. "The impact of thin-capitalization rules on the capital structure of multinational firms," Journal of Public Economics, Elsevier, vol. 96(11), pages 930-938.
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