Wen, Jean-François - In: International Tax and Public Finance 4 (1997) 2, pp. 129-148
The paper shows how a tax holiday may signal to a skepticalcapital market that the future level of taxation will be moderate.After the signal has informed investors that the host countrygovernment is a low-spender, the tax profile flattens out, correspondingto a tax reform stage. Contrary to the...