The International Union of Accountants is a body of many accounting firms across the globe which reports on global movements in personal taxes. This year the Board of the International Union of Accountants conducts a survey on Individual Income Tax from 77 countries for each of the past seven years. The Accounting Director of the International Union of Accountants aims to draw conclusions on how people are taxed in different parts of the world and the key contributing factor in these personal taxes. For ease of comparison, the study concentrates on the highest rates of personal income tax payable to central governments in each country. Accordingly, for each of the 77 countries, she has determined the OECD membership, the region and the tax rates for the past seven years. The data is stored in file MBS622assignment_tma_2015_data.xls with the following variables.
Column 1: OECD (Organization for Economic Co-operation and Development)
1 = OECD member; 2 = not OECD member
Column 2: Region
1 = European Union; 2 = Asia-Pacific; 3 = Latin American; 4 = others
Column 3: Country
Column 4 – 10: Tax rates for 7 years (t1 – t7)
Present a report of your findings (by answering the questions below) as the Accounting Director to the International Union of Accountants.
In your report, answer the following questions.
a. Are there differences in the OECD membership across the different regions?
b. Is there evidence of change in tax rates over the seven-year period?
c. Is there evidence to suggest that the tax rate of t7 for OECD member is greater than the tax rate of t7 for non-OECD member?
d. Is there evidence to suggest that the tax rates of t7 differ across the different regions?
In your conclusion you should also shed some lights in how different governments approach the difficult task of raising funds for necessary public services without losing the support of the citizens.
For each question above, perform separate statistical tests to answer the questions. This report should be presented in a professional manner and you need to demonstrate that considerable thought has gone into the analysis of data.
Your report should also include technique identification and any underlying assumptions required.
o Why do you use a particular technique? Consider type of data – quantitative or qualitative? How many samples? Are these samples independent?
o What are the underlying assumptions? Have you checked the assumptions?
If checking for normal distribution, consider to put up the histogram and discuss the shape.
If you found it is not normally distributed, keep doing the test with the underlying assumption, but need to discuss this as one of your limitations in the overall conclusion.
The parameter of interests and populations must be clearly defined.
For each of the tests, you need to have a discussion about the rejection regions using significance level at 1% and 5% and state your conclusions.
Show all the necessary steps and calculations for your tests.
o Manual calculations must be presented for all of the above tests and verified by
o For descriptive statistics (e.g. mean and standard deviation), Excel calculation is Excel outputs