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Influencing behaviour

As well as collecting data for the three key Paying Taxes indicators, the contributors to Paying Taxes were asked to provide additional non-compulsory data, not used in calculating the indicators but which could provide useful insights into tax systems. Our purpose in highlighting this additional data is to seek views on its usefulness and whether the process for requesting and checking this data should be extended next year.



Tax incentives Environmental taxes

 
 
 
 
 
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Tax incentives

In addition to being a way of raising revenues for necessary public expenditures, tax systems continue to be used by governments to influence the behaviour of individuals and businesses. Around 40 percent of contributors to the Paying Taxes data indicated that their economies have Small and Medium sized Enterprise (SME) and Research and Development (R&D) incentives included within their tax systems. The proportion saying that they have these incentives is highest in the OECD, G8 and BRIC groupings.

 
 
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Environmental taxes

At present it is not possible to answer the question: 'do environmental taxes really influence behaviour?'in a global context. However, some empirical work performed in the UK by PricewaterhouseCoopers on the impact of environmental taxes sought to understand the impact of environmental taxes on behaviour. Data was collected in 2007 from 151 companies representing a mix of types of commercial activities and size of companies. The report concluded that of the seven taxes classed as environmental taxes by the Office of National Statistics, the impact on behaviour was varied. For further information, please see Saving the planet - can tax and regulation help?

However, PricewaterhouseCoopers sees environmental taxes as having the potential to be used to change behaviours. Further research is required to assess the extent of these taxes and their effectiveness.