Effect Of Tax Incentives Research Articles

Enhanced R&D Tax Deduction and Corporate Short-term Loans for Long-term Investment: Evidence from China

This study empirically investigates the effect of tax incentives on enterprises’ reliance on short-term loans for long-term investment, focusing on China’s enhanced R&D tax deduction policy in 2015. By employing a regression discontinuity design and a complementary difference-in-differences specification, we find that the policy led to a notable reduction in enterprises’ resorting to short-term loans for long-term investment. In addition, the policy accomplished its effect by augmenting enterprises’ cash flows and mitigating their financing constraints, which increased their tendency to rely on internal financing for long-term investment. Furthermore, the policy exhibits a more pronounced restraining effect on financially healthy, non-state-owned, innovative, and small-scale enterprises. The study sheds light on the impact of tax incentives on enterprises’ financing decisions for long-term investment and has important policy implications.

Effect of Integrated Customs Management Systems (ICMS) on Customs Duty Performance in Nairobi County, Kenya

Purpose: Tax is an important stream of revenue for government’s development projects and therefore all efforts must be made by governments to ensure that it is accurately and efficiently collected to facilitate the government’s operations. This study sought to determine the of integrated customs management system on factors affecting customs duty performance Nairobi County, Kenya. The theories supporting the study is comparative theory of international trade. Methodology: The study employed explanatory research design. The target population of this study was 438 respondents comprising customs heads of departments, customs officers and customs agents at Embakasi Inland Depot, Nairobi. with a sample size of 209, out of which 173 respondents correctly filled the questionnaires and submitted them accordingly. The data collected was analyzed through descriptive and inferential statistics. A linear regression model was used. Results: The coefficient study showed that a unit change in ICMS increases customs duty performance significantly β =0.205 p-value =0.000<0.05. Conclusion: The study recommends that the KRA and the government of Kenya prioritize the continuous improvement of the Integrated Customs Management System (ICMS). Customs management should ensure full utilization of the ICMS by training customs officials and stakeholders, given its positive impact on duty performance. Future research may be carried out on the effects of tax incentives on Customs duty performance

Sociological Behaviour and Excise Duty Compliance Nexus: Do Dispute Resolution Mechanisms Matter? Evidence From Alcoholic Beverage Manufacturers in Kenya

Purpose: Despite implementation of several initiatives to improve tax revenue collections, actual tax revenues have fallen short of projected targets. The purpose of the study was to determine the moderating role of dispute resolution mechanisms on the relationship between sociological behaviour and excise duty compliance among alcoholic beverage manufacturers in Nairobi County, Kenya. The study was guided by the theory of planned behaviour and judicial organization and adjective law theory. Methodology: The study employed explanatory research design. The target population of the study was 231 respondents. Primary data was collected through structured questionnaires. Out of 231 issued questionnaires, 185 filled and returned the questionnaires. Results: The study found that sociological behavior had a positive and significant effect on excise duty compliance, β=0.270 and p-value=0.000124<0.05. The study also found that dispute resolution mechanisms moderate and enhance the positive effect of sociological behaviour on excise duty compliance, β=0.113 and p-value of 0.000000<0.05. Conclusion: It is recommended that policymakers should consider and incorporate the theory of planned behaviour into tax compliance frameworks since understanding how sociological behaviour influences tax compliance can inform the development of targeted interventions and policies. It is also recommended that effective and affordable dispute resolution mechanisms should be put in place as they provide clarity and ultimately result in resolution of conflicts arising on account of excise duty thus promoting excise duty compliance. Future studies should be conducted on the effect of tax incentives on excise duty compliance.

The Impact of Tax Incentives on the Growth of Small and Medium-Sized Enterprises: A Comparative Study Based on Industry

Tax incentive policies have been widely used as a crucial tool to promote the development of Small and Medium-sized Enterprises (SMEs), but their effectiveness varies across different industries and policy types. This study utilizes a comprehensive panel dataset from 2015 to 2023 to investigate the impact of Value-Added Tax (VAT) and income tax incentives on the growth of SMEs in China. Through fixed effects model analysis, we find that both VAT and income tax incentives significantly enhance SMEs' sales revenue and total asset growth. However, the magnitude of these effects differs substantially across industries, with high-tech and information technology service industries benefiting the most. Our industry comparison analysis reveals that the effectiveness of tax incentives is closely related to industry-specific characteristics, such as research and development (R&D) intensity and capital requirements. These findings provide key empirical evidence for optimizing SME tax policies and suggest that a more nuanced, industry-specific approach to tax incentives is needed. This study not only contributes to the literature on SME growth and tax policy effectiveness but also offers important insights for policymakers to refine SME support systems in the context of rapid technological change and economic transformation.

The green bonus of tax incentives: Evidence from China

Using a novel dataset covering over one million firm-level energy consumption entries from 2007-2016, we employ a difference-in-differences approach to estimate the causal effect of tax incentives on carbon emission intensity by exploiting China’s staggered implementation of accelerated depreciation policies for fixed assets in 2014 and 2015. We find that the accelerated depreciation policy leads to a significant 9.19% reduction in carbon emission intensity, equivalent to 0.11 tons of carbon emissions per 10,000 RMB of industrial value added. The policy effect is more pronounced for large firms, those with medium-term assets, and in regions with greater market integration and industrial agglomeration. Our firm-level analysis reveals that the policy reduces energy consumption, promotes a shift towards a cleaner energy portfolio and increases R&D investments in abatement technologies, as well as climate-friendly innovations. The above results show high consistency with verification at the aggregation level using satellite-based observations. Our findings highlight the potential of well-designed fiscal policies to contribute to global climate action efforts in developing economies.

Impact of Fiscal Policy on Corporate Innovation in an Emerging Market Economy: Evidence from Brazil

This study investigates the impact of fiscal policy on corporate innovation in an emerging market economy, focusing on Brazil. Utilizing a comprehensive dataset of firms listed on the B3 Brazilian Stock Exchange from 2010 to 2020, we employ panel data analysis and the difference-in-differences (DiD) method to examine the effects of tax incentives, government subsidies, and public investment in innovation infrastructure on corporate innovation activities. Our findings reveal that tax incentives significantly enhance innovation outputs by reducing the financial burden of R&D investments. Similarly, government subsidies are shown to lower the cost and risk associated with R&D projects, thereby fostering greater innovation. Furthermore, public investment in innovation infrastructure plays a crucial role in creating an enabling environment for corporate innovation. These results provide robust evidence supporting the effectiveness of fiscal policy in promoting innovation in emerging markets, offering valuable insights for policymakers aiming to foster sustainable economic growth and competitiveness.

Effects of SUDENE’s tax incentives on job creation in the Northeast region of Brazil

ABSTRACT This paper analyzes the effects of tax incentives on job creation by companies located in the Northeast region of Brazil, disaggregated by sector. The generalized synthetic control method is employed to handle this problem. The evidence indicates that the incentives have beneficial effects on increasing firm employment. Specifically, we observed positive impacts in the labour-intensive manufacturing sector. Therefore, the results provide positive evidence for using tax incentives for regional development, although the effects are concentrated in the manufacturing sector.

Effectiveness of tax incentives in optimizing corporate income tax revenue: Case study public listed company tax office

Tax revenue is a key component of the Indonesian State Budget (APBN) and plays a strategic role in national development. This study aims to analyze the impact of the implementation of the income tax rate reduction policy and tax incentives based on Law Number 7 of 2021 on Harmonization of Tax Regulations (UU HPP) on corporate income tax revenue at Public Listed Company Tax Office. The research methodology used is qualitative descriptive, with primary data obtained through interviews with tax officials and tax consultants, and secondary data from tax revenue documentation and related literature. The findings show that the reduction in corporate income tax rates and the provision of tax incentives for publicly listed companies significantly impact the optimization of tax revenue at the Public Listed Company Tax Office. The largest contribution to corporate income tax revenue comes from companies listed on the Indonesia Stock Exchange (IDX), with a dominant contribution from companies conducting Initial Public Offerings (IPOs). The study also identifies several factors affecting the optimization of corporate income tax revenue, including tax awareness and corporate tax morale. These findings provide important insights into how tax policies can be optimized to improve taxpayer compliance and tax revenue, as well as their contribution to national economic growth.

The Tax State: An Outdated Concept

Taxes are compulsory levies for no consideration. Because there is no earmarking, the budget funds are often not spent effectively by the state authorities. In economic terms, the incentive effects of taxes and deadweight losses are counterproductive. The alternative would be state financing that is primarily based on performance and consideration (equivalence). A key component of this would be marginal cost-oriented charges. A second element would be the financing of provisioning costs of public infrastructure from land rents. This would largely avoid the problems of tax financing. States and public companies can be observed that are already successfully moving in this direction.

Effect of Tax Incentive on Compliance in Nigeria of Listed Food and Beverages Firms in Nigeria

This study investigates the impact of tax incentives, specifically rural investment allowances and pioneer status, on compliance among listed food and beverage firms in Nigeria. Using regression analysis, we found that rural investment allowances significantly enhance compliance, explaining 97.8% of the variance, while pioneer status shows a non-significant impact. The findings highlight the importance of targeted tax incentives in promoting regulatory adherence and economic development. Recommendations include enhancing rural investment allowance programs, leveraging incentives for operational efficiency, and reevaluating the pioneer status framework to ensure effectiveness in encouraging compliance and investment. These insights offer valuable guidance for policymakers and businesses.

The Effect of Tax Incentives, Tax Socialization, and Law Enforcement on Motor Vehicle Tax Compliance in East Java

This study examines the impact of tax incentives, tax socialization, and law enforcement on motor vehicle tax compliance in East Java, utilizing a quantitative approach. A sample of 140 respondents was surveyed using a Likert scale (1-5), and the data were analyzed with Structural Equation Modeling-Partial Least Squares (SEM-PLS 3). The results indicate that tax incentives (H1), tax socialization (H2), and law enforcement (H3) have positive and significant effects on motor vehicle tax compliance. Specifically, law enforcement emerged as the most influential factor, followed by tax incentives and tax socialization. These findings highlight the importance of well-structured tax policies, comprehensive taxpayer education, and robust enforcement mechanisms in enhancing tax compliance. The study offers valuable insights for policymakers seeking to improve tax collection efficiency and compliance rates among motor vehicle owners in East Java.

The Effect of Tax Incentives on the Performance of Specialized and Sophisticated Small and Medium-Sized Enterprises: The Role of Innovation

Tax incentives have been widely used to promote the development of enterprises, especially Specialized and Sophisticated enterprises in Chian. This research endeavors to examine the effects of tax incentives by amalgamating established theoretical frameworks and empirical data, while taking into account the attributes of specialized and sophisticated SMEs. Innovation, serving as a fundamental driver of contemporary economic, technological, and social development, exhibits diverse definitions across various academic fields. This research attempts to explain the direct and indirect ways in which tax incentives influence enterprise performance through examining the relationship between tax incentives, innovation input and output, and enterprise performance. To achieve this, the research uses a multiple linear regression model to test the direct effect of tax incentives on the performance of specialized and sophisticated SMEs. Additionally, a three-step method based on Baron and Kenny (1986) is used to test the mediating role of innovation input between tax incentives and enterprise performance. Furthermore, hierarchical regression is applied to assess the moderating effect of innovation output on the relationship between tax incentives and enterprise performance. The empirical analysis in this article confirms that all hypotheses are valid.

The Effect of Tax Incentives, Tax Rates, Tax Sanctions, Tax Services, and the Application of SAK EMKM on the Compliance of UMKM Taxpayers during the COVID-19 Pandemic: A Case Study of UMKM Taxpayers Registered at KPP Pratama Ternate

The Effect of Tax Incentives, Tax Rates, Tax Sanctions, Tax Services, and the Application of SAK EMKM on the Compliance of UMKM Taxpayers during the COVID-19 Pandemic: A Case Study of UMKM Taxpayers Registered at KPP Pratama Ternate

Tax Incentives, Confidence, and Enterprise Innovation in Chinese Listed Companies

ABSTRACT In this paper, we study the direct effect of tax incentives on enterprise innovation investment and the mediating effect of confidence on enterprise innovation investment using data from 3,900 annual reports of listed companies in China from 2008 to 2020 for data mining, and combine this with sentiment analysis to measure the business confidence index. We find that tax incentives are significantly and positively related to enterprise innovation investment and tax incentives are significantly and positively related to business confidence. Business confidence plays a significant partial mediating role between tax incentives and enterprise innovation investment, and tax incentives boost confidence by alleviating internal financing constraints. This study provides empirical evidence to help the government develop strategies to activate the confidence of market players and boost market expectations.

PENGGUNAAN MODEL EKONOMETRIKA UNTUK MENENTUKAN INSENTIF PERPAJAKAN BAGI INVESTOR DAN PENGARUHNYA BAGI INVESTASI

This research aims to determine the effect of tax incentives for investors to invest their capital in Indonesia and calculate how many tax incentives can be given to investors. Methodology, The method used is a literature review using multiple linear analysis econometric models. Meanwhile, to test the correlation between incentives and investment in the textile sector in 2020-2021. Results, the of multiple econometric model calculations with existing data, the tax incentive amount is 73.7, with an unpredictable random error (?). Meanwhile, from the correlation test, it was found that tax incentives do not affect investment in the textile industry sector.

Tax Incentive Mediates Foreign Direct Investment Determinants and Hotel Performance in Arusha Tanzania

This study seeks to explain the mediation effect of tax incentives on the relationship between ownership advantage (OWA), location advantage (LA), and internationalization (INT) factors determining Foreign direct investment (FDI) on hotel performance (HP). The study proposes the mediation model of tax incentives and FDI toward hotel performance in the Arusha region, of Tanzania. The proposed order of the model is that foreign direct investment depends on OWA, LA, and INT which may become applicable through tax incentives and tax incentives may further predict hotel performance. The measurement scale was borrowed from different studies and responded Includes hotel owners, managers, executive officers, and employees. Data were collected from August 2022 to February 2023; whereby 257 filled questionnaires were gathered and 236 were usable for further analysis. Final questionnaires were analyzed using SPSS and Structural Equation Modeling (SEM). The findings support that tax incentive fully mediates the relationship between ownership advantage and FDI toward hotel performance and partially mediates location advantage and internationalization on FDI investments toward hotel performance. The paper strengthens theoretical arguments by indicating the mediation effect of tax incentives on the relationship between the determinant of FDI, OWA, LA, INT, ICT, and hotel performance. Thus, this study adds to the literature as it has confirmed the eclectic paradigm theory.

Effect of Tax Knowledge on Pay As You Earn Tax Compliance Among Small and Medium Enterprises in Thika Town, Kenya

The government is unable to adequately raise revenue through tax collection to effectively provide for the essential needs of its citizens which include education, healthcare, water, security, roads, and social security among others. This has raised a concern as the Government seeks to achieve its revenue targets hence the need for this study. The study looked at tax knowledge and Pay As You Earn compliance among small and medium enterprises in Thika town Kenya. The study was supported by The Attribution Theory. The study adopted an explanatory research design. The study aimed to focus on Small and Medium Enterprises licensed in Thika town. The target population was 1223 small and medium enterprises with a sample size of 301 small and medium enterprises with a response rate of 83%. Primary data was collected using structured questionnaires. Both descriptive statistics and inferential statistics were carried out. The study found that there is a positive and significant effect of tax knowledge on PAYE tax compliance (β1 =0.332, p<0.05), The study recommends that KRA should therefore work towards simplifying and streamlining the tax compliance processes, reducing unnecessary administrative burdens. Future research should be carried out to determine the effect of tax incentives on TAX compliance.

ANALYSING THE IMPACT OF TAX INCENTIVES ON SAVINGS AND INVESTMENTS

Tax incentives have a significant impact on how people save and invest. The goal of this study is to look into the impact of tax incentives on saving and investing. This study tries to provide insights into how tax incentives influence behavior. The study aims to examine the effects of tax incentives on savings and investment habits among respondents. The study also sets up some hypothesis about the impact of tax incentives. The study primarily uses primary data, i.e., a questionnaire. The data will be tested by chi-square tests, regression, and frequency using the statistical software SPSS. The study received approximately 110 responses. The study addressed the debated effects of tax incentives on individuals' behavior, the effectiveness of incentive structures, and overall economic outcomes. The study found that tax incentives significantly impact savings habits, investment portfolio checks, and awareness among respondents. The study also found that the hypothesis being tested was that tax incentives have an impact on savings and investments.

International tax incentives, cross-border research and development, and corporate innovation performance

Based on a sample of multinational firms from 2012 to 2022, this study uses empirical models to examine the impact of R&D tax incentives on corporate innovation. We find that tax incentives can greatly enhance a firm's R&D expenditures. However, innovation performance is not significantly improved. The results suggest firms merely transfer their R&D activities from countries with low tax subsidies to countries with high tax subsidies, and the real effect of tax incentives on boosting innovation is limited. This study provides valuable insights to practitioners by shedding light on the impact of tax incentives on innovation outcomes.

The influence of tax incentives on market segmentation in the context of a unified national market

The new development pattern prioritises the construction of a unified national market, eliminating market segmentation and promoting resource flows. This paper investigates the impact of tax incentives on market segmentation using China's provincial panel data from 2003 to 2019 through a two-way fixed effects model. The results indicate that tax incentives reduce market segmentation. The analysis of heterogeneity reveals a non-linear relationship between the effects of tax incentives on market segmentation. Tax incentives reduce market segmentation in regions with low tax incentives, but have a limited effect or even exacerbate segmentation in regions with high incentives.