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11461. Should We Consider A Post-Covid-19 Reform Of The VAT In Cameroon?

Publication Date:
03-2021
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The COVID-19 pandemic so far has had a profound impact on the global economy. The containment measures adopted by governments to curb the spread of the disease have curtailed business activities, making it impossible for companies to adequately meet their tax obligations. As a result, forecasts for customs revenues and internal tax resources have been revised downward, mainly due to the closure of borders. Collected both at the borders and within the country, Value Added Taxes revenues have naturally been very negatively affected by the crisis. In Cameroon, losses related to value added tax in 2020 were estimated at CFAF 298.017 billion, representing 50.73 percent of recorded tax losses, which is hardly surprising. Value-added taxes are identified as the main source of tax revenue in Cameroon. They were estimated at 44.73% of tax revenue in 2019 and about 7% more than in 2016. The importance of VAT in tax revenue mobilization requires an examination of the Cameroonian tax system, particularly the factors that could explain a reform of the tax. Moreover, given that Cameroon is at high risk of external debt distress (IMF, 2018), there is an urgent need to find new ways to ensure the continued sustainability of public finances. This Tax Policy Letter analyzes the rationale for VAT reform in Cameroon. First, we present the severity of the economic repercussions of the coronavirus health crisis at the level of VAT revenues in Cameroon. Noting that VAT is the main source of indirect tax revenue – 60.19% in 2019 compared to 54.54% in 2016, for example – we then examine the guiding principles that govern its collection and application in Cameroon. A careful examination of these principles has allowed us to analyze the benefits associated with a reform of this tax on final consumption.
Topic:
Economics, International Political Economy, Tax Systems, Macroeconomics, Fiscal Policy, and Revenue Management
Political Geography:
Africa and Cameroon

11462. The Declaration and Payment of Taxes in Cameroon: A Critical Appraisal

Author:
Dr. Louis-Marie Kakdeu, Ulrich D’POLA KAMDEM, and Dinga Tambi
Publication Date:
05-2021
Content Type:
Special Report
Institution:
The Nkafu Policy Institute
Abstract:
The Nkafu Policy Institute is delighted to share with you the results of a report that critically appraises the declaration and payment of taxes in Cameroon. Indeed, since 2004 the Doing Business Index (DBI) of the World Bank has been ranking national economies based on their performance in several domains. One of these domains includes the “paying taxes” indicator. It records taxes and mandatory contributions that medium-size companies must pay in a given year and equally measures the administrative burden of paying taxes and contributions and complying with post-filing procedures. Therefore, the weight of the tax burden remains a decisive element in the attractiveness of an economy as it encourages or dissuades national and foreign investors, widens or reduces the tax base, stimulates or refrains entrepreneurship. During the 2009 and 2016 General Census of Enterprises by the National Institute of Statistics, the following key question was asked to top management personnel: “What are the most important obstacles to entrepreneurship in Cameroon?” Taxation was cited as the first major obstacle regardless of cities, according to National Institute of Statistics reports.
Topic:
Economics, Governance, World Bank, Regulation, and Tax Systems
Political Geography:
Africa and Cameroon

11463. Gender Digital Equality Across ASEAN

Author:
Araba Sey
Publication Date:
02-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper provides an overview of the participation of women in the digital economy across ASEAN. By using available data sources, it compares and analyses levels of women participation in digital economy related occupations and activities across different ASEAN Member States. Overall, the analysis shows that the gap between women and men is bigger with respect to more advanced metrics of access to the digital economy (including skills; entrepreneurship opportunities; access to science, technology, engineering, mathematics, and tech occupations) than for more basic access metrics. Access to digital economy related occupations and activities is particularly important for ASEAN, which is amongst the fastest growing digital economies in the world. The shift towards digital technologies during the coronavirus disease (COVID-19) pandemic is accelerating pre-pandemic trends and making it even more relevant to gain a better understanding of women participation in the digital economy. The paper concludes by providing an overview of policy initiatives in ASEAN Member States and details possible policy options.
Topic:
Gender Issues, Inequality, Digital Economy, Leadership, and Feminism
Political Geography:
Asia and Southeast Asia

11464. The Link Between Global Value Chain Activity and Local Human Capital: Evidence from Indonesia’s Manufacturing Sector

Author:
Rashesh Shrestha and Deborah Winkler
Publication Date:
02-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
For developing countries, participation in global value chains (GVCs) provides an opportunity to expand domestic human capital. Since GVC firms require qualified workers to meet high production standards, they have an incentive to invest directly in their workers’ skills or to raise the demand for skilled workers, which indirectly creates an incentive for workers to enrol in vocational education. This paper explores the relationship between GVC activity and workers’ skills in Indonesia. It combines National Labor Force Survey (SAKERNAS) data with the Large/Medium Industry Survey (IBS) to construct a pooled cross-sectional data set of Indonesian manufacturing workers which takes into account measures of GVC activity at the district-sector-year level. The findings suggest that higher GVC activity in a worker’s district-sector-year is linked to a higher likelihood of vocational education of individual workers. A separate panel data analysis at the district level confirms the positive relationship between GVC activity and human capital. Finally, the results indicate that the wage premium for vocational education is higher in districts with greater intensity of GVC activity.
Topic:
Development, Education, Training, Manufacturing, Industry, and Global Value Chains
Political Geography:
Indonesia, Asia, and Southeast Asia

11465. Getting to Grade 10 in Viet Nam: Challenges from Deprivation, Discrimination, and a Booming Job Market

Author:
Ian Coxhead, Nguyen Vuong, and Phong Nguyen
Publication Date:
02-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Viet Nam has enjoyed more than a generation of rapid economic growth, led by labour-intensive exports. This form and pace of growth has increased schooling opportunities, but has also reduced incentives for some students to advance to higher education. We hypothesise that these conflicting influences help explain another puzzle – the relatively slow growth of educational progression to upper secondary school. Slow and unevenly distributed increases in schooling attainment are warning signs for the sustainability of future aggregate growth and for the distribution of growth gains. We use a new data set on participation rates and scores in an exam to enter Grade 10, the first year of upper secondary school, to analyse the variation in test participation rates due to demand- and supply-side factors. The data are drawn from less advanced provinces within Viet Nam. As such, they shed light on the challenges of expanding educational development at the extensive margins of lower socio-economic status and higher grades, especially in areas with large ethnic minority populations.
Topic:
Labor Issues, Employment, Economic Growth, Training, and Job Creation
Political Geography:
Asia, Vietnam, and Southeast Asia

11466. Birth Order, Sibling Sex Composition, and Quantity–Quality Trade-offs – Evidence from India

Author:
Ilke Onur and Malathi Velamuri
Publication Date:
02-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
We use two waves of data from the India Human Development Survey to investigate the effect of family size on (i) parental expenditures on children’s education; and (ii) test scores of proficiency in reading, writing, and maths for 8–11-year-old children. We investigate whether these effects vary by gender, birth order of children, and sibling sex composition. We address the endogeneity of family size, using an instrumental variable approach. Our ordinary least squares estimates provide evidence of quantity–quality trade-offs in children’s educational expenditures, the existence of birth-order effects, and a sizeable pro-son bias. For test scores as well, ordinary least squares estimates indicate negative spillovers from additional children. The instrumental variable estimates, in contrast, find no evidence of quantity–quality trade-offs, birth order, or sibling sex composition effects in either expenditures or test scores. However, instrumental variable estimates of the male premium are bigger than ordinary least squares estimates. They also suggest that children enrolled in private schools do no better than those in government schools. Moreover, the advantage that boys appear to have over girls in maths is largely reversed in private schools.
Topic:
Education, Gender Issues, Children, and Family
Political Geography:
India and Asia

11467. Fuelling the Engines of Liberation with Cleaner Cooking Fuel

Author:
Tushar Bharati, Yiwei Qian, and Jeonghwan Yun
Publication Date:
02-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Using the staggered roll-out of the Indonesian Conversion to Liquefied Petroleum Gas (LPG) Programme, we show that a subsidy for the labour- and time-saving cooking technology increased female labour force participation. The programme also increased household consumption expenditure and the decision-making power of women in the household, especially in financial matters. A back-of-the-envelope calculation suggests that the benefits of switching to LPG far outweighed the costs to the households. Based on previous research, we conjecture that intra-household externalities and gender differences in preferences drive the low rates of adoption of cost-effective technology. The programme’s impact on the financial decision-making power of women suggests that subsidies which empower women, even if temporary, can encourage the adoption and sustained use of beneficial technology.
Topic:
Gender Issues, Science and Technology, Labor Issues, Women, and Family
Political Geography:
Indonesia, Asia, and Southeast Asia

11468. Understanding Quality Energy-Related Infrastructure Development in the Mekong Subregion: Key Drivers and Policy Implications

Author:
Han Phoumin, Sopheak Meas, and Hatda Pich An
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Many players have supported infrastructure development in the Mekong Subregion, bridging the missing links in Southeast Asia. While the influx of energy-related infrastructure development investments to the region has improved the livelihoods of millions of people on the one hand, it has brought about a myriad of challenges to the wider region in guiding investments for quality infrastructure and for promoting a low-carbon economy, and energy access and affordability, on the other hand. Besides reviewing key regional initiatives for infrastructure investment and development, this paper examines energy demand and supply, and forecasts energy consumption in the subregion during 2017–2050 using energy modelling scenario analysis. The study found that to satisfy growing energy demand in the subregion, huge power generation infrastructure investment, estimated at around $190 billion–$220 billion, is necessary between 2017 and 2050 and that such an investment will need to be guided by appropriate policy. We argue that without redesigning energy policy towards high-quality energy infrastructure, it is very likely that the increasing use of coal upon which the region greatly depends will lead to the widespread construction of coal-fired power plants, which could result in increased greenhouse gas and carbon dioxide emissions.
Topic:
Development, Energy Policy, Infrastructure, Renewable Energy, and Carbon Emissions
Political Geography:
China, Asia, Vietnam, Burma, Cambodia, Thailand, Southeast Asia, Laos, and Myanmar

11469. The Impact of COVID-19 on Global Production Networks: Evidence from Japanese Multinational Firms

Author:
Hongyong Zhang
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
Using aggregate-level data on Japanese multinational corporations (MNCs) in major host countries and regions, this paper investigates the impact of COVID-19 on global production and supply chains with a focus on East Asia. I use the numbers of COVID-19 cases and deaths as measures of the impact of the pandemic. I find that the pandemic had substantial impacts on the performance (sales, employment, and investment) of Japanese MNCs and global supply chains (exports to Japan and exports to third countries) in Q1–Q3 2020. China recovered quickly in Q2 and grew in Q3, whilst the countries of the Association of Southeast Asian Nations and the rest of the world had still not fully recovered in Q3 2020. Importantly, lockdown and containment policies in host countries had large negative impacts on the sales and employment of Japanese MNCs. In contrast, I did not find positive effects of economic support policies on firm performance. Interestingly, whilst the firm expectations and business plans of Japanese MNCs were negatively affected by the COVID-19 pandemic, their business confidence increased with strong overall government policy responses in host countries in Q1 2020.
Topic:
Economic Development, Pandemic, COVID-19, and Production
Political Geography:
Japan and Asia

11470. Demand and Supply Shocks of COVID-19 and International Production Networks: Evidence from Japan’s Machinery Trade

Author:
Mitsuyo Ando
Publication Date:
03-2021
Content Type:
Research Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper investigated the impacts of COVID-19 on international production networks in machinery sectors by shedding light on negative supply shocks, negative demand shocks, and positive demand shocks. Specifically, we examined changes in trade in the periods of falling trade during the first wave of COVID-19 using Japan’s machinery trade at the most disaggregated level and decomposed them into two intensive margins, i.e. the quantity effect and the price effect, and two extensive margins, i.e. the entry effect and the exit effect. Our empirical results demonstrated that i) trade relationships for parts and components are robust, and international production networks are almost intact, so far; ii) the intensive margin, mostly the negative quantity effect, induces the largest negative effects in the transport equipment sector amongst four machinery sectors; iii) positive demand shocks for specific products that are related to teleworking, disinfection, and stay-home activities partially explain sectoral differences; iv) direct negative supply shocks from China, suggested by a negative quantity effect and a positive price effect, exist in February 2020, with possible indirect negative supply shocks and substitution of source countries; and v) negative demand shocks are confirmed from negative quantity and price effects in many cases. As of October 2020, Japan’s machinery trade seems to have largely recovered. If the COVID-19 pandemic lasts long, however, prolonged negative demand shocks would hurt production networks in East Asia.
Topic:
Demand, Manufacturing, Economic Development, Pandemic, Industry, COVID-19, and Supply
Political Geography:
Japan and Asia