Corporate Tax Revenues Research Articles

Financial inclusion and tax revenue

Financial inclusion might bring huge amounts of income into the global economy, which creates different opportunities and challenges for countries. As people become more financially included and their incomes grow over time, this might in turn increase their tax contributions to the government. Thus, this paper seeks an answer to the primary question of whether the changes in tax revenue is associated with the change in financial inclusion for countries around the world by using an extensive dataset of 137 countries over the years between 2011 and 2017. For this, the paper uses the Global Findex database and panel data methodology. The empirical findings show that there is a significant and positive relationship between financial inclusion and tax revenues and it is one of determinants of tax revenues. The results are robust in terms of different sources of taxation such as corporate tax revenue, income tax revenue and direct tax revenue. Policy-makers around the world could take advantage of this significant opportunity in order to raise tax revenues by considering ways of increasing financial inclusion.

Hard power and film distribution: transformation of distribution practices in Poland in the era of digital revolution

This article focuses on film distribution in Poland within the framework of hard power and soft power interplays. Contrary to perceptions of culture as soft power, film distribution is located mainly in the sphere of hard power, which includes capital dominance, negotiating leverage, pressuring partners and the need to control physical space. An analysis of the modern history of the distribution field in Poland after 1989 is presented in three stages. The first stage is characterised by the formation of a distribution market following new capitalist rules during the 1990s; the second, by the dominant influence of newly introduced multiplex chains; and the third, by digitalisation and the development of the VOD market. Referring to statistical market data, industry reports, semi-structured interviews and personal communication with industry insiders, the author underlines the separateness of traditional cinematic and VOD distribution on the level of corporate control and revenue streams. VOD distribution is dominated by platforms owned by local corporations built around TV broadcasters or by huge global conglomerates. The main stream of revenues from the VOD sector is kept by these two kinds of players.

Time-Dependent Pricing for High-Speed Railway in China Based on Revenue Management

High-speed railway (HSR) is recognized as a green transportation mode with lower energy consumption and less pollution emission than other transportation. At present, China has the largest HSR network globally, but the maximum revenue of railway transportation corporations has not been realized. In order to make HSR achieve a favorable position within the fierce competition in the market, increase corporate revenue, and achieve the sustainable development of HSR and railway corporations, we introduce the concept of revenue management in HSR operations and propose an innovative model to optimize the price and seat allocation for HSR simultaneously. In the study, we formulate the optimization problem as a mixed-integer nonlinear programming (MINLP) model, which appropriately captures passengers’ choice behavior. To reduce the computational complexity, we further transform the proposed MINLP model into an equivalent model. Finally, the effectiveness of both the proposed model and solution algorithm are tested and validated by numerical experiments. The research results show that the model can flexibly adjust the price and seat allocation of the corresponding ticketing period according to the passenger demand, and increase the total expected revenue by 5.92% without increasing the capacity.

Estimating the scale of profit shifting and tax revenue losses related to foreign direct investment

Governments’ revenues are lower when multinational enterprises avoid paying corporate income tax by shifting their profits to tax havens. In this paper, we ask which countries’ tax revenues are affected most by this tax avoidance and how much. To estimate the scale of profit shifting, we begin by observing that the higher the share of foreign direct investment from tax havens, the lower the reported rate of return on this investment. Similarly to the United Nations Conference on Trade and Development’s World Investment Report 2015, we argue that the reported rate of return is lower due to profit shifting. Unlike the report, however, we provide illustrative country-level estimates of profit shifting for as many countries as possible, including low-income ones, which enables us to study the distributional effects of international corporate tax avoidance. We compare estimated corporate tax revenue losses, relative to their GDP and tax revenues, of country groups classified by income per capita and we find that there are almost no statistically significant differences across these groups. Furthermore, we compare our results with four other recent studies that use different methodologies to estimate tax revenue losses due to profit shifting. In the first such comparison made, we find that most studies identify some differences across income groups, but the nature of these differences varies across the studies.

Tax Policy Next to the Elephant: Business Tax Reform in the Wake of the US Tax Cuts and Jobs Act

While there is considerable uncertainty regarding the US Tax Cut and Jobs Act’s (TCJA) economic and fiscal impacts, one thing is certain – the significant corporate tax competitiveness advantage that Canada enjoyed over the US for years has disappeared. This Commentary explores some major TCJA measures as they relate to corporations, examines their implications for Canadian business, evaluates Ottawa’s response in the Fall Economic Statement and discusses what is required going forward. The TCJA impact on real domestic investment in Canada is complicated, with competing effects. The TJCA will likely have a net negative effect on domestic and US foreign investment in Canada, moderated in the long-run by the international nature of capital markets. Still, concerns remain about income shifting due to the statutory rate reductions in the US. Our review of the academic literature suggests the US tax-rate cut will result in Canadian affiliates of US companies shifting homeward 8 percent to 28 percent of their profits – a back-of-the-envelope calculation for sure, but nonetheless suggesting a potential significant impact on Canadian corporate tax revenues. The TCJA represents a long overdue sea change in US corporate taxation and, on balance, will have a positive impact on investment and productivity in that country. However, the reform is not anchored in sound tax principles and introduces undesirable distortions. Ottawa, in its 2018 Fall Economic Statement, duplicated in part some aspects of the US reforms in accelerated depreciation for new capital expenditures. While we think that this short-run response is reasonable in light of the fiscal constraints facing the government and the uncertainty regarding the impact of the TCJA, we do not think that the work is done. The US reform provides an opportunity to make a bold move toward a corporate tax system in Canada that is grounded in sound tax policy principles, is less distortionary, promotes economic growth and prosperity, and restores Canada’s tax competitiveness on a worldwide basis. A structured, principled approach to tax reform in Canada is preferable than an ad hoc response to US developments, which may turn out to be fragile in light of the American political climate and the point in the business cycle. We advocate for a corporate tax system based on the taxation of economic rents. A simple example of such a regime is a cash-flow tax, which would involve the immediate write-off of all capital expenditures coupled with the elimination of the debt-interest deduction. The basic idea is to replace the corporate income tax with a rent tax that taxes only the above-normal return on investment and is, therefore, neutral with respect to business investment and financing decisions. A cash-flow tax would reduce the business cost of capital investment by roughly 20 percent – offering a much greater boost to capital investment than alternative and fractional reforms such as temporary accelerated depreciation or statutory tax rate cuts.

FOREWORD

Digital transformation is shaping our lives continuously. The current economic trends confirm the shift to the digital economy and society. Significant changes occurred at micro and macro levels, new financial and commercial models emerged due to the digital platforms and ecosystems.Digital platforms and ecosystems are created, managed and governed to support the private entrepreneurial initiatives. For the private sector, digital platforms come with the promise of exponential economic growth, scale through the network effects and no assets needed. Recent research shows that emerging digital ecosystems will score $60 trillion in revenue by 2025, which represents more than 30% of the global corporate revenue, and for the moment, only 3% of companies have adopted an active platform strategy....

КООПЕРАТИВНЕ ПІДПРИЄМНИЦТВО: ЗМІНА ПАРАДИГМИ

The article examines essence and special characteristics of the modern cooperative entrepreneurship. Its essence is observed in organizations which are owned and managed by workforces. A worker of such cooperative entrepreneurship is stimulated not only by his participation in the corporate revenue, but by his property increment, and also by participation in business and social issues tackling and in control of decisions. The main task of the cooperation in the current context is not an adaptation to market principles, but development of cooperation phenomenon unique characteristics, creating and increasing competitive advantages, underlying the cooperative form of economy management. It was noted that the strongest competitive advantages of the cooperative system are wide possibilities of diversification and integration of its activities. Formation of cooperative networks allows using the advantages of small cooperatives, building a single technological chain, expansion and diversification of production, reducing the risk of niche specialism and fund raising, and increasing investment even in the times of crisis. We examined the interaction of cooperation organizations with other forms of the economy management within the territory on the base of business cluster approach. The core of the cluster is formed by enterprises of the cooperative sector of the regional economy, and also by the Coordinating Council of the regional cluster. Strategic block includes cooperative educational institutions, research institutes, educational and business centers. A cluster periphery is formed by numerous independent small and medium-sized enterprises which deliver equipment, technologies, customized services, labor power, and by dealers. An institutional environment of the cluster is represented by engineering companies and consulting companies. It was noted that implementation of state support measures, creation of cooperative entrepreneurship supporting structures, development of democratic principles in the management of enterprises are necessary for the development of the cooperative entrepreneurship in Ukraine.

Trends in the Development of Sovereign Funds as a Tool of Budgetary Policy

The subject of the researchis the activity of sovereign funds as a tool of the budgetary policy ensuring the sustainability of the budget system and having a positive impact on the national currency rate.The relevance of the researchis due, first, to the changing conditions, goals and tasks of establishing sovereign funds in the XXI century and, second, to the need to update approaches to coordination of the fiscal and monetary policies with account for modern macroeconomic challenges and shocks.The purpose of the researchwas to identify current trends in the development of sovereign funds and define the main areas for improving the mechanism for the formation of sovereign funds and making use of their money in Russia. Based on the analysis of the foreign and domestic experience in running sovereign funds, the paper reveals the stages and trends of their development. It also shows the changes in the conceptual approaches, sources and rules for the formation of sovereign funds and analyzes the prospects of their modernization. A special focus is placed on increasing the transparency of sovereign funds, in particular, Russian funds.The paper concludesthat in order to achieve the strategic goals and tasks of the Russian National Wealth Fund it is necessary to develop a long-term development strategy for Russian sovereign funds. Besides, to reduce the dependence of the budget system revenues on the world market prices, parts of corporate tax revenues and PIT revenues can be transferred to the National Welfare Fund, which will make it possible to maintain the counter-cyclical nature of the budgetary policy.

THE EFFECT OF LOSS-OFFSET PROVISIONS ON THE ASYMMETRIC BEHAVIOR OF CORPORATE TAX REVENUES IN THE BUSINESS CYCLE

This paper estimates the response of corporate tax revenues to the business cycle fluctuations and calculates a heterogeneous asymmetry in the tax revenue responses between booms and recessions using a new index of loss-offset generosity provisions. I find strong short-run contemporaneous impact of business cycles on corporate tax revenues and a persistent asymmetric response of corporate tax revenues to booms and recession. Loss-offset generosity provisions enhance this asymmetry. Countries with more generous loss-offset provisions experience much more volatile response of corporate tax revenues to business cycles during recessions, magnifying the asymmetry of the cyclicality.

Оценка последствий пенсионной реформы в России в глобальной CGE-OLG модели

This paper aims at modeling the proposed 5-year rise in retirement age for Russian economy. The primary goal of the paper is to analyze the effect of this pension reform on the major macroeconomic features of the Russian economy as well as benefits and losses of different age group of agents. The problem is solved by making simulations in the setting of a global CGE-OLG model. The proposed model takes into account the long-run demographic trends forecasted by the UN as well as the budget structure of each of the 17 regions included: consumption taxes, income tax, payroll tax, corporate tax and natural revenues and expenditures on education, healthcare, pensions and other spending. Having overlapping generation is the model allows us to estimate changes in welfare of different age groups of agents from any economic policy. The results of the simulations show that the effect of raising the retirement age on economic growth appears to be limited. However, we observe an increase in the level of consumption and welfare for all the generation except for those that are close to reaching the retirement age when the reform is implemented. A more pronounced effect of raising the retirement age is that it helps keeping the government budget balanced in the long run. As an alternative a gradual pension system capitalization scenario is considered.

The Reflection on the Magnitude and Disasters of BEPS Schemes

To promote the maximum consensus of the global community on the implementation of the OECD/G20 Final BEPS Package, this paper investigated the magnitude and disasters of BEPS schemes by comparative research and empirical data. This paper analyzed the relevance of ETRs to the magnitude of BEPS, the ratio of corporate tax revenue in GDP in the process of globalization, the relevance of the FDI flows to BEPS, the relevance of the widespread conduit or SPE structures to BEPS schemes and the magnitude of BEPS schemes of U.S.-based MNEs. As the research findings, this paper highlighted the complicated disasters of over speculative BEPS schemes. The BEPS schemes have eroded the integrity of tax bases in both source and residence jurisdictions, deteriorated the quality of the public goods in all relevant jurisdictions, fundamentally undermined the tax justice, imposed unfair burden on domestic taxpayers especially the individuals and small businesses, distorted the free and fair mechanism of market competition, undermined the efficiency of rational market in optimal allocation of the resources and created a booming intermediary industry assisting BEPS, undermined the reasonable trust of global taxpayers in the fairness and integrity of the tax law, hindered the voluntary compliance by the public taxpayers, and injured the reputation of the community of MNEs and worsened off the global business ecology.

Does Capital Bear the U.S. Corporate Tax After All? New Evidence from Corporate Tax Returns

This article uses U.S. corporate tax return data to assess how government revenue would have changed if, over the period 1957–2013, corporations had been subject to a hypothetical corporate cash flow tax—that is, a tax allowing for the immediate deduction of investments in long‐lived assets like equipment and structures—rather than the corporate tax regime actually in effect. Holding taxpayer behavior fixed, the data indicate actual corporate tax revenue over the most recent period (1995–2013) differed little from that under the hypothetical cash flow tax. This result has three important implications. First, capital owners appear to bear a large fraction of the corporate tax today. This is because economic theory holds that corporate cash flow taxes are largely borne by capital owners and my result implies that the actual tax behaves in practice much like a cash flow tax. This theory is embodied in the Treasury's most recent model of corporate tax incidence. Applying the model to my results implies that only a small portion (2–10 percent) of the U.S. corporate tax was borne by labor in the years before the 2017 Act and thus capital providers are the primary beneficiaries of the Act's large corporate rate cut. Second, the results suggest that the United States could switch fully over to a cash flow tax, which is likely to be administratively simpler for both the government and corporations, at relatively low revenue cost. Third, the impact of fully switching to a cash flow tax on the operations of the real economy and its efficiency are likely to be fairly small. This is precisely because the corporate tax has already evolved to largely mimic a cash flow tax, and the article explores the reasons underlying this evolution using a novel dataset.

Malaysian corporate tax rate and revenue: the application of Ibn Khaldun tax theory

PurposeThe present study aims to investigate the impact of the reduction of the corporate tax rate on corporate tax revenue. The study adopts the theory of taxation by Ibn Khaldun, depicted as the Laffer curve.Design/methodology/approachThe paper analyses time series data for the period 1996 to 2014 using the autoregressive distributed lag (ARDL) approach.FindingsThe paper finds that the corporate tax rate has a dual effect on corporate tax revenue over the study period. It shows an inverted U-shape relationship between the corporate tax rate and corporate tax revenue and reveals that the optimal tax rate is 25.5156 per cent. Inferentially, a positive relationship exists between the two variables prior to the optimal tax rate, and a negative relationship prevails afterwards. A further test of causality shows a long-run unidirectional causality between corporate tax rate and corporate tax revenue.Research limitations/implicationsFirst, it should be noted that the policy was not implemented in isolation. Several other tax incentives were given to corporate tax payers, and therefore, such incentives should be controlled for to have a more insightful evaluation of the policy. Second and most important, there is a need to investigate whether the increased cash flow available to firms as a result of the reduction in the corporate tax rate adds value to firms. It is also necessary to investigate whether firms’ stakeholders benefited from the increased cash flow or was there managerial diversion of firms’ resources.Practical implicationsThe policy of gradual reduction of the corporate tax rate in Malaysia is suspected to have a positive impact on the productivity of Malaysian companies, which has contributed to an increase in corporate tax revenue. It also has a positive impact on the economic growth of the country. It means that the lower corporate tax rate has actually reduced the cost of doing business in the country.Originality/valueThe benefit of increased corporate tax revenue needs to be investigated empirically for insightful policy evaluation. In Malaysia, however, such investigation is close to non-existent to the best knowledge of the researchers. Thus, the present study aims at investigating the impact of the policy of gradual reduction of the corporate tax rate on corporate tax revenue over an 18-year period from 1996 to 2014.

STRATEGI PENGEMBANGAN USAHA RUMAH TANGGA

This research has been done in Household Business “X”, which is located in Sidrap Regency, South Sulawesi. This research aims to: 1). Analyze the problems that happened in agrosystems case; 2). Analyze various solutions for problems in business development; 3). Formulate actions in achieving the objectives; 4). Implement selected actions. The whole data and information obtained in this research using the APPAS (Analysis of Agrosystem Design and Development) method and AHP (Analysis of Hierarchy Process). APPAS method is one of the learning methods that lead to overcome the problem in relation of the agrosystem case that used as the object of research and also directs to analyze the problem solving and AHP (Analysis Hierarchy Process) that is used to evaluate the alternative actions that must be done for the sake of development of agrosystem case. The result of the analysis shows that Household Business of “X” has the main problem that is Limited Marketing Area. The main problem happened due to the lack of promotion media, the manpower in the marketing department is unavailable, inadequate transportation, and limited equipment units. This main problem is the cause of low incomes, low demand, and low sales. To solve this problem, we have to set the main target that is increasing the revenue. The main target will be achieved if the media promotion increases, availability of manpower, transportation, and equipment units. Achieving the main targets will have an impact on increased of corporate revenue, the demand and the sales. Keywords: Strategy, Household Business, AHP (Analysis of Hierarchy Process)

The structure of state corporate taxation and its impact on state tax revenues and economic activity

This paper documents facts about the state corporate tax structure — tax rates, base rules, and credits — and investigates its consequences for state tax revenue and economic activity. We present three main findings. First, tax base rules and credits explain more of the variation in state corporate tax revenues than tax rates do. Second, although states typically do not offset tax rate changes with base and credit changes, the effects of tax rate changes on tax revenue and economic activity depend on the breadth of the base. Third, as states have narrowed their tax bases, the relationship between tax rates and tax revenues has diminished. Overall, changes in state tax bases have made the state corporate tax system more favorable for corporations and are reducing the extent to which tax rate increases raise corporate tax revenue.

The International Provisions of the TCJA: Six Results after Six Months

Over six months have passed since the enactment of the TCJA, so it is now possible to reach some preliminary conclusions on its impact. The main ones are: 1. The transition tax plus anticipated GILTI tax minus territoriality have resulted in higher GAAP effective tax rates for 2017. In some cases they approach 35% for large multinationals with a lot of offshore income. For the first six months of 2018, however, overall corporate tax revenues are sharply down because of the 21% rate plus expensing. This is the exact reverse of the situation before TCJA in which MNEs showed very low effective tax rates on the financials but overall corporate revenue was remarkably robust. 2. As expected, the transition tax has resulted in a significant repatriation of offshore earnings that were primarily invested in stock buybacks. 3. The main outcome of TCJA in in the international arena is not territoriality (i.e., participation exemption) with a minimum tax, but rather a worldwide tax regime with no deferral, but with a lower rate for foreign income. That is because for most of the large US MNEs the amount of offshore income that can avoid GILTI and therefore be eligible for zero tax under territoriality is very small. 4. FDII is a failure, it is too risky to move intangibles into the US because it may be a Hotel California situation if the law is changed. This may be why there is no WTO challenge. 5. BEAT is a success, although the revenue estimate is too high, because it may be easy to avoid by recharacterizing royalties as cost of goods sold under 263A. But this could be subject to the BEAT anti-abuse rule. 6. The FTC, which was supposed to become less important because of territoriality, is more important because 960 is the new 902, with five baskets instead of two (general, passive, GILTI, branch, treaties). This has created significant complexity and much work for tax lawyers.

Consignment Income Recognition and Measurement in Indonesia Retail Companies

<p>This study aims to review the consignment income recognition and measurement from the consignee. Up to now, there is no specific Indonesia Statement of Financial Accounting Standards (hereinafter referred to as PSAK) that regulates the recognition, measurement, and disclosure of consignment revenues. The PSAK used in this study refers to PSAK 23, 2017 on Corporate Revenues.</p><p>The research method used in this research is qualitative descriptive by comparing data obtained from direct observations in a company with theories and financial accounting standards related to consignment income. The population used in this study is the financial statements of 2017 from the retail sub-sector companies listed on the Indonesia Stock Exchange (IDX). Based on the examination of 93 companies regarding consignment transaction information, this study obtained a final sample of 10 companies. This paper analyzes the application in the consignment income recognition and measurement in retail companies to further examine its suitability with revenue recognition by PSAK 23, 2017.</p>This study finds that the retail sub-sector companies have some similarities in recording consignment revenues and have obediently made disclosures related to consignment sales revenue following PSAK 23, 2017 even though there was no specific PSAK regulating consignment.

Corporate Transparency Laws: A Hollow Victory?

The article examines reporting laws to determine if and how these laws shape corporate conduct and protect human rights. Since 2010 a wave of laws with extraterritorial effects has appeared as home states of multinationals began to mandate social disclosures. However, opinions as to their importance differ and some wonder whether these transparency laws are ‘a hollow victory’. What is the evidence regarding the effectiveness of these laws? If they work, what are the exact pathways for change? The laws selected for analysis cover corporate sustainability, slavery, conflict minerals, revenue transparency, and corporate governance. To assess the impacts and potential of these laws, the article distinguishes between dynamics that are internal and external to the corporation, and between direct and more remote effects. Drawing on the evidence surrounding these transparency laws, their place in the regulatory regime for global value chains as well as the functions this regulatory method fulfils in relation to human rights are discussed.

A study of information systems issues, practices, and leadership in Europe

ABSTRACTIn the summer of 2017, an online survey was administered to European IT executives, asking them about their concerns, spending, investments, cloud usage, security, workforce, reporting relationships, and other issues of importance. A total of 276 organisations responded. Their top-five most important IT management concerns were: Alignment, Digital Transformation, Cybersecurity, Cost, and Business Agility. Similarly, their top-five largest IT investments were: Analytics, Software Development, Cloud, Cybersecurity, and ERP.The average age of the CIOs was 49, 41% reported to their CEO, and nearly two-thirds interacted with their CEO at least weekly. Almost three-quarters came from previous IT positions, but only a 16% from IT within their current organisations. On average, CIOs spend about 20% of their time interacting with members of the C-suite, about 26% with their IT employees, and about 16% with other corporate employees. IT spending was up nearly 5% over the previous year and averaged almost 7% of corporate revenues. Over two-thirds of companies reported the number of IT employees and salaries were both up and spending on Cloud also increased.This paper explores these and other findings and their implications for IT management practice. Comparisons with US -based organisations are also included.

Mandatory CCCTB implementation in the Eurozone and its impact on corporate tax revenues in the Czech Republic

The European Commission has been attempting to coordinate the corporate taxation systems of the EU Member States since 1962. One of the most ambitious projects in the history of the harmonization effort was introduced on 16 March 2011, when the European Commission published, after more than ten years of work, the text of the CCCTB Directive proposal. The directive proposal suggests the consolidation regime and the allocation formula with three equally weighted factors – sales, labour and assets, i.e. the consolidated tax base should be shared among the members of the group based on those micro factors. That tax-sharing mechanism as a new allocation rule has raised much discussion and will defi nitely have an impact on EU Member States’ budgets. The aim of the paper is to research the impact of mandatory CCCTB implementation in the Eurozone on tax bases in the Czech Republic and consequently on Czech corporate tax revenues, and to identify whether the implementation of the system in the Eurozone will result in the outfl ow or infl ow of tax bases from/to the Czech Republic. The research is based on empirical data from the Amadeus and Bankscope databases covering 2,424 parent companies with 3,860 Czech subsidiaries. In order to verify the results of the research, a sensitivity analysis was also performed. The research revealed that mandatory implementation of the CCCTB system in the Eurozone would have negative impact on the tax bases currently generated and located in the Czech Republic. As a result of this fact, the Czech Republic would lose between 0.87% and 8.84% of the corporate tax liability recorded in 2011.