Tax Policy Development Research Articles

Tax Policy Trends in Africa – Commentary on the Major Tax Developments in 2013 and 2014

The authors, in this article, comment on the most significant tax policy trends and developments that occurred in Africa in 2013 and 2014, together with providing an analysis, both theoretically and globally, of the relevant tax changes. The article also considers potential future tax policy developments in Africa.

An analysis of company choice preference to carbon tax policy in China

This paper summarizes an analysis of choice preferences of Chinese companies to the design options of carbon tax policy. The data were collected from 201 companies, with around half of them based in the western Shanxi Province and the other half from the eastern Jiangsu Province. Modeling analysis of the discrete choice dataset confirms the statistically significant relationships between the company's preferences to carbon tax policy with the policy attributes, including tax rate, tax relief measures and the revenue utilization. From the viewpoint of Chinese businesses, the option of carbon tax policy with tax rate at 10–30 Yuan/t-CO2, allowing tax relief to energy-intensive sectors, using the revenues specific for climate change and starting as early as the 13th five-year plan period (2016–2020) would be preferable and realistic. The results of this research may be referred for the discussions and development of carbon tax policy in China.

New changes in tax legislation of the Russian Federation

The article deals with significant changes in the tax legislation of the Russian Federation concerning the interests of individuals. The article highlights the major changes in detail in the definition of the object of taxation, the tax base for the tax on personal property. It also covers the procedure and terms of payment of the tax. The paper contains a comparative analysis of existing laws and a new law in October of this year, thus allowing to identify trends in the development of tax policy of Russia.

Institutions and Simplicity - An Australian Perspective

The objectives of equity, efficiency and simplicity are not always aligned and in policy development trade-offs between these criteria are often necessary. Given that trade-offs are inherently a feature of policy development, questions arise as to how relevant values are to be ascribed to conflicting objectives and who should be responsible for those choices? These are considerations relevant in assessing the institutional arrangements that could support sound tax policy development and administration. For example, who should make the call on policy decision; who advises the decision-maker; who should be reviewing the policy behind the legislation in a thorough and radical way; how are the outcomes to be progressed to implementation; and how do we ensure that the legislative intent is being administered in a proper and effective way? Tax has political, social and economic dimensions. Even with major tax reform, simplification is unlikely to be the overriding criterion for change. Nevertheless if an absolutely simple tax system in all its shades cannot be realised, simplification or the taming or the masking of complexity remain worthy goals.

Tax without Design: Recent Developments in UK Tax Policy

AbstractThis paper considers the development of tax policy in the UK over the last decade or so and assesses policy change against a low bar – consistency and coherence. While this government has followed some consistent policies – notably, in some aspects of corporation tax and in increasing the income tax personal allowance – there are few signs of a wider coherent strategy. The same has been true of other recent governments. Many aspects of the system have become more complex. There have been numerous policy reversals. And few of those aspects of the system in most need of reform have been tackled. The need for reform, and a clear strategy for reform, remain as pressing as ever.

The tax-welfare mix: explaining Japan's weak extractive capacity

Despite having the highest level of public debt in the Organisation for Economic Co-operation and Development (OECD), higher than Greece or Italy, Japan has one of the lowest aggregate tax burdens of the advanced industrial democracies. This paper asks why Japan, once described as a strong developmental state, has had such a weak extractive capacity, an inability to raise revenues to confront deficits and public debt? In contrast to the existing explanations that focus on political institutions, partisan preferences, or economic globalization, this article argues that Japan's ‘tax–welfare mix’ – the combination of taxes and redistributive welfare polices – undermined the state's long-term capacity to secure adequate tax revenue. More than just a source of revenue, taxes can be used directly to achieve redistributive goals, such as targeting low taxes and exemptions to specific groups. This study shows how Japan's tax–welfare mix diminished its extractive capacity through three mechanisms: the political lock-in of a redistributive social bargain struck around low taxes, the timing and sequencing of its tax policy and welfare development, and the erosion of public trust, which undermined tax consent. Beyond offering a new theory of extractive capacity, the tax–welfare mix explains aspects of Japan's tax structure that defy existing explanations and contributes to our understanding of the capitalist development state by highlighting the redistributive political function of tax policy and its long-term impact on state capacity.

The Role of Sanctions and other Factors in Tackling International Tax Fraud

The current global financial climate has placed governments under more pressure to prevent revenue leakage by curbing undesirable activity such as tax fraud. The aim of this paper is to examine the role of sanctions and other factors (both economic and non-economic) in tackling tax fraud and non-compliance in various jurisdictions. The evidence suggests that the imposition and increase in sanctions alone should perhaps be more correctly seen as only one part of an overall balanced, tax compliance strategy. It is submitted that the evidence produced in this paper provides useful information for revenue authorities globally and has implications for tax policy development.

From Obsolescence to Sustainability, Back Again, and Beyond

ABSTRACTThis article traces the idea of architectural obsolescence in twentieth-century architecture and urbanism: where the idea comes from that buildings and cities can suddenly lose their value and utility, and how architects and others around the world responded to the perception that obsolescence characterized modernity. Evolving out of early twentieth-century US income tax policy and capitalist real estate development, the paradigm of obsolescence spread globally in the mid-century urban and social realms before impacting architecture directly. Some designers embraced obsolescence's liberating promise of expendability and short-life buildings. Others were horrified by its implications of ephemerality and waste, leading to preservationism, postmodernism, and ecologism. Obsolescence, as a paradigm for comprehending and managing change in the built environment, thus set the stage for its successor worldview of sustainability, it is argued. Yet obsolescence and sustainability are also intimately linked through similar views of performance and quantification, technology and the past. Understanding the complex relationships between obsolescence and sustainability historicizes both paradigms, critiques their inevitability, and thus looks beyond the horizon of sustainability to a possibly different future.

Affordability of energy cost increases for companies due to market-based climate policies: A survey in Taicang, China

This paper estimates the affordability of increased energy costs for Chinese companies due to the possible introduction of carbon pricing policies. The data were collected from 121 valid respondents in Taicang, China, using a multiple-bounded discrete choice (MBDC) format. Estimations indicate that a mean of 8.5% in energy cost increase would be acceptable for the surveyed companies on the whole. Companies from chemical and dyeing industries expressed a slightly higher affordability, with the mean of acceptable energy cost increase being 9.8% and 9.4% respectively. Econometric analysis identified two determinants of affordability for companies. One is the current energy price level, having a significant but negative relationship with affordability. The other is the energy management strategies of companies, significantly and positively associated with affordability. Calculations indicate that the mean of affordable energy cost increases for companies roughly equals a carbon price of 60 CNY/t-CO2 (about 9 USD/t-CO2). This result may be used as a referendum during the development of carbon tax policy and the establishment of a domestic carbon emissions trading scheme in China from the perspective of individual companies.

Tax policy developments, donor inflows and economic growth in Malawi

In this investigation the friction and wear performance of GUR 1020 medical grade ultra-high molecular weight polyethylene (UHMWPE) polymer under dry sliding, distilled water and egg albumen lubrication conditions were evaluated. The sliding experiments were carried out on a pin-on-disc tribometer. The contact configuration used was a polymer pin on a rotating AISI 304L stainless steel disc. Wear tests were carried out for 30 min duration at room temperature with 50, 100 and 150 N applied load values and at 0.50, 1.0 and 2.0 m/s sliding speeds condition. The results show that the coefficient of friction for GUR 1020 medical grade UHMWPE polymer is more significantly influenced by applied load and sliding speed values under dry sliding condition rather than lubricant media condition. Furthermore, the coefficient of friction and specific wear rate increases with the increase in applied load and speed values. This increase is much pronounced under dry sliding condition. Moreover, for the range of load and speed values of this study the specific wear rate using egg albumen lubricant registered lower values than that of the distilled water lubricant and the dry conditions. Finally, the specific wear rate values for GUR 1020 medical grade UHMWPE polymer under dry, water lubricant and egg albumen lubricant conditions are at the levels of 8x10-14, 1.4x10-14 and 0.5x10-14m2/N respectively. Key words: Medical Grade UHMWPE, tribology, distilled water, wear.

The impact of tax professionals upon the compliance behavior of Australian individual taxpayers

The tax compliance literature indicates that limited research attention has been given to gauging the influence of tax professionals upon individual taxpayer compliance behaviour. This potential gap in the literature needs to be addressed given that tax professionals not only act as intermediaries between the Australian Taxation Office (ATO) and the majority of individual taxpayers but they can directly influence taxpayers’ ethical behaviour and the level of compliance.This empirical study explored whether or not a relationship exists between the advices provided by tax professionals and the compliance behaviour of Australian individual taxpayers (both evaders and non-evaders) taken from the taxpayers’ perspective. The findings revealed that there was a statistically significant relationship between the need for engaging tax professionals and compliance behaviour generally. There was also evidence of a statistically significant relationship between tax professionals’ aggressive advice and the compliance behaviour of non-evaders. It is envisaged that this study’s results will provide useful information for the Australian Taxation Office and have implications for tax policy development.

Standards in Tax Reform

The article focuses on the steps that should be taken for a successful tax reform. The article identifies and discusses which steps are to be taken during both the legislative process and the implementation process. In the legislative process, three major stages are discussed, i.e. the development of tax policy, a technical analysis and the actual drafting of the legislation. Further attention is paid to creating and maintaining public support for a tax reform, the use of project groups and the involvement of stakeholders in the entire process. Regarding the implementation process, the article pays attention to the design of processes and forms, changes needed to the information technology infrastructure of the tax administration, public awareness raising and training of the tax administration. The article concludes that an evaluation of a tax reform may after some years provide valuable insight into the effectiveness and the success of that reform.

Optimal tax policy when firms are internationally mobile

The standard tax theory result that investment should not be distorted is based on the assumption that profits are locally bound. In this paper, we analyze the optimal tax policy in a model where firms are internationally mobile. We show that the optimal policy response to increasing firm mobility may be taxation, subsidization, or non-distortion of the marginal investment, depending on whether the mobile firms are more or less profitable than the average firm in the economy. Our findings may contribute to understanding recent tax policy developments in many OECD countries.

Tax Evasion Behaviour and Demographic Factors: An Exploratory Study in Australia

The tax compliance behavioural literature indicates that, among other factors, demographic variables play an important role in the compliance behaviour of taxpayers. This exploratory study investigated the relationship between demographic variables and Australian personal taxpayers’ attitudes towards tax evasion. An electronic survey of 300 Australian personal taxpayers’ was conducted by a market research company on behalf of the author. The findings revealed that, for the majority of the demographic variables analysed, statistically significant relationships were established with Australian’s attitudes towards tax evasion. These results provide useful information for revenue collecting authorities and have implications for tax policy development.

Taxation and Technology: Technology Readiness of Malaysian Tax Officers in Petaling Jaya Branch

The Inland Revenue Board Malaysia has just launched the electronic tax filing system. To date, there has been little scholarly study in examining people’s state of technology readiness. Technology readiness (TR) is defined as people’s propensity to embrace and use new technologies for accomplishing goals in home life and at work (Parasuraman, 2000). Drawing on insights from the literature, this study attempts to adopt the Technology Readiness Index (TRI) of Parasuraman and Colby (2001) in examining the state of technology readiness of tax officers. A survey questionnaire was personally administered on 210 tax officers in Malaysia. A total of 187 usable questionnaires were collected. The survey found that although Malaysian tax officers are optimistic towards new technologies, they experienced a considerable level of discomfort with new technologies. Notably, male tax officers displayed more optimism than their female counterparts. There were no significant differences between gender and age on innovativeness, discomfort and insecurity dimensions. Based on the TRI, the respondents were segmented into explorers (6 per cent), pioneers (39 per cent), skeptics (35 per cent), paranoids (16 per cent) and technology laggards (4 per cent). This study provides timely and useful information for the tax authorities and has implications for tax administration and policy development.

Optimal Tax Policy When Firms are Internationally Mobile

The standard tax theory result that investment should not be distorted is based on the assumption that profits are locally bound. In this paper we analyze the optimal tax policy when firms are internationally mobile. We show that the optimal policy response to increasing firm mobility may be taxation, subsidization or non-distortion of investment depending on whether the mobile firms are more or less profitable than the average firm in the economy. Our findings may contribute to understanding recent tax policy developments in many OECD countries.

Influence from the Shadows : the OECD, The Shape of Domestic Tax Policy and Lessons for Federal Systems

Over the years, the OECD has quietly taken centre stage in international tax policy development. The influence of the OECD is evident in the shape of Australian international tax policy. More recently, Australia has discovered that it can, in turn, have some influence in the direction taken by the OECD. This article examines some aspects of these influences. At a different level, the federal/state relationship is becoming tenser in the face of increasing tax competition. The second part of this article explores whether there are any lessons for federal tax systems that can be drawn from the way the OECD and similar organizations have helped the development of international tax policy. It is argued that an independent facilitator of tax policy, legislation and administration may prove beneficial.

European Environmental Tax Policy: Proposal for a Policy Vision and a Legal Framework

Analysis of all the policy declarations, realisations and proposals concerning European fiscal environmental policy instruments shows that the Community institutions in general and the European Commission in particular do not have a clear view on the development of a European environmental tax policy: in the absence of a general debate on this topic, there is no elaborated policy line and, as a consequence, all adopted and proposed European fiscal environmental policy instruments are "one-shots", which do not fit into a general framework. Therefore, in the discussion about the development of a European environmental tax policy, absolute priority must be given to the creation of a concrete European policy vision and the elaboration of a general European legal framework, on the basis of which European fiscal environmental policy instruments are being developed, proposed and adopted. In this article, a policy vision, as well as a legal framework, are proposed. A possible and desirable policy vision is one by which the Community, via ambitious ecological goals and regulating fiscal environmental policy instruments, resolutely chooses in favour of an environmental tax policy in which the protection of the environment, and not the creation of new jobs or financial means, is the central goal. A possible and desirable legal framework, corresponding to this policy vision, is one by which the Community adopts the following three pillars, based on the principles of subsidiarity and integration: pillar one, a "clean-up" of the present environment-unfriendly fiscal regulations in regional and national (fiscal) legislation conducted at European level; pillar two, the use of ecological fiscal incentives, again conducted at European level; pillar three, a European-conducted use of environmental taxes.

Directions for Tax Administration: Two Recent Reports

After quickly sketching the background to tax administration and the special features of tax collecting today, this paper discusses major issues of tax administration for the future. There is a particular emphasis on the roles of the Commissioner and Chief Executive, the relationship with the relevant Minister, tax policy development and legislative drafting, adjudication of tax liability and tax dispute resolution, and structural arrangements including sub-contracting options for delivery and social policy functions.

Directions for Tax Administration: Two Recent Reports

After quickly sketching the background to tax administration and the special features of tax collecting today, this paper discusses major issues of tax administration for the future. There is a particular emphasis on the roles of the Commissioner and Chief Executive, the relationship with the relevant Minister, tax policy development and legislative drafting, adjudication of tax liability and tax dispute resolution, and structural arrangements including sub-contracting options for delivery and social policy functions.