Multiple Faces of the Tax Agressiveness of Brazilian Banks, based on Effective Tax Rate Variations
DOI:
https://doi.org/10.17524/repec.v18i2.3323Keywords:
Effective Tax Rate, Banks, Tax, Tax AgressivenessAbstract
Objective: The objective of this research was to examine the behavior of the effective tax agressiveness on the profit of Brazilian banks, comparing Effective Tax Rate [ETR] proxies in the short and long term.
Method: Four variations of the ETR were considered – Gaap, adjusted Gaap, Cash and adjusted Cash – in periods of one, five and ten years. The analysis was performed using an illustrative example and descriptive statistics.
Results: Using data from 2000 to 2022, the tests show that the ETR varies between 26% and 48%, in average terms, according to the proxy and measurement period used. More than that, the results suggest that banks generally use efficient tax planning strategies and manage to defer the payment of taxes on income in the long term.
Contributions: The study contributes to the literature on tax aggressiveness, especially in the banking sector, suggesting proxies adapted to the Brazilian context that aim to capture the sensitivity of measures on the ability of banks to avoid taxes on income. It also provides subsidies for recurrent discussions, including in political terms, on the effective level of tax burden on Brazilian banks.
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