Effects Of Tax Policies Research Articles

ПОДАТКОВИЙ БОРГ ЯК ОДИН З ЕЛЕМЕНТІВ ТІНЬОВОЇ ЕКОНОМІКИ

The work analyzes the role of tax debt in the formation of the shadow economy and its impact on the national economy. The amount of tax debt and its impact on the economic development of the country is considered. The relationship between the shadow economy, in which tax debt is one of the key elements, and the general state of the economy is investigated. The work highlights strategies and tools that can be used to reduce tax debt and its negative impact on the national economy. Proposed proposals for improving the tax policy and improving the control system aimed at reducing the scale of the shadow economy and improving the country's financial stability. The study reveals the key factors that contribute to tax losses from the shadow economy, and based on this, an analytical table for 2015–2021 was created, and the specific weight of tax debt and the shadow economy in the national economy of Ukraine was additionally calculated. The article schematically plots the growth of tax losses over the analyzed period, both from the shadow economy separately, and from tax debt and the shadow economy in general. The analysis shows that these losses exceed almost half of the actual tax revenues received by the Consolidated Budget of Ukraine. The existence of a shadow economy and tax debt leads to significant losses for the state, which should be a source of additional income for the economy, necessary for the effective financing of various budget expenditures. Tax debt and the shadow economy are becoming tools used by taxpayers for illegal tax evasion. The study also highlights the consequences of tax debt and the shadow economy for the national economy, including the limitation of financial resources for social and infrastructure projects. Recommendations are offered to improve the effectiveness of tax policy and reduce the risks of the shadow economy and the amount of tax debt. The obtained results can be used to develop recommendations for improving tax policy, aimed at reducing tax debt and activating economic activity in legal channels. The research is relevant and useful for authorities, tax services, and scientists who are interested in improving the efficiency of tax administration and reducing the shadow economy. Also, the research is important for understanding the problem of tax debt as a component of the shadow economy and can serve as a basis for developing strategies to overcome this phenomenon in order to increase the financial stability of the state budget.

ОСНОВНЫЕ ФАКТОРЫ ЭВОЛЮЦИОННЫХ ПРЕОБРАЗОВАНИЙ НАЛОГОВОЙ ПОЛИТИКИ ОРГАНИЗАЦИИ

The presented study is devoted to the study of transformations in the organization’s tax policy that have occurred previously and are currently occurring in the system for forming indicators of this most important local legal act of the organization. Target. Consider the main directions of transformation of the organization’s tax policy under the influence of various factors in the context of global changes in the legal regulation of the tax system, tax administration, and the expansion of digitalization. Tasks. To study the transformation of the concept of tax policy in the period from the emergence of taxes as a tool for managing an organization to the stage of formation of a qualitatively new effective tax trajectory, to identify the influence of various factors on the formation of tax policy in the context of the rapid development of digitalization and systematic transformations taking place in our country, to establish the influence of historical and political component for building the tax system of a business entity. Methodology. The conducted research used such methods as: historical, logical, private scientific and general scientific methods, methods of compiling empirical and theoretical research; analyzed evolutionary changes in the regulatory framework in the field of developing an organization’s tax policy. Results. By studying the evolutionary transformations in the field of the state tax system and the company’s tax strategy, scientific results were obtained that make it possible to establish the dependence of certain factors on the formation of tax policy, to identify the level of influence on tax policy, to establish the degree of risk of certain factors and the ability to manage them. Conclusions. The study shows the most important directions for the development of the methodology for the formation of modern tax policy, taking into account evolutionary transformations and the use of specialized software products and digital services, the use of which, along with the proposals of the author of the article, will make it possible to formulate an effective tax policy, improve the quality of financial and tax reports, and avoid penalties and reduce tax risks.

Taxation Policies and Profitability of Deposit Money Banks in Nigeria

This study investigated the effect of taxation policies on the profitability of deposit money banks in Nigeria. The ex-post facto research design was employed to assess the effects over the period 2013 to 2022. The sample size comprised five major Nigerian banks (Zenith Bank, Access Bank, UBA, FCMB, and Fidelity Bank) selected using a non-probability sampling technique. Data were sourced from published audited financial statements available on bank websites, the Nigerian Stock Exchange, and the Federal Inland Revenue Service. Variables included ROA as the dependent variable, and Corporate Income Tax (CIT), Value-Added Tax (VAT), and Withholding Tax (WHT) as independent variables. The study employed panel data Ordinary Least Square (OLS) regression on EViews version 12 for analysis. The results indicated that a higher Corporate Income Tax (CIT) rate, with a coefficient of -0.903132 and a p-value of 0.0000, had a significant and negative effect on bank profitability. In contrast, Value Added Tax (VAT) exhibited a coefficient of 0.287309 with a non-significant p-value of 0.6276. However, Withholding Tax (WHT), with a coefficient of -3.286051 and a p-value of 0.0200, significantly reduced bank profitability. The study concluded that CIT and WHT policies directly influenced bank profitability, underscoring the need for balanced tax policy decisions. VAT showed no direct effect due to the indirect intermediary role of banks. Recommendations include reviewing CIT and WHT policies concerning the banking sector, ensuring VAT policy transparency, and considering incentives or exemptions to maintain industry stability. The study contributed by emphasizing tax policy effects on the financial sector and informed balanced taxation approaches.

Pengaruh Implementasi Pajak, Budaya, Teknologi Melalui Inovasi Terhadap Kinerja Perusahaan

This study aims to analyze the effect of tax policy, company culture, technology through innovation to company financial performance. This study uses primary data from 70 responden. The analysis data use structural equation modeling with SmartPLS 3.2.8. The results show that tax policy and technology have positive effect on company financial performance and the company culture has no effect on company financial performance. Tax policy and technology have positive effect on company financial performance, with this condition company need to focus on how to maximizing the technology and improve the capability of tax team in company and get benefit to increase the company performance. And the company culture has not directly impact to company financial performance, but with the innovation as an intervening company culture can make the positive effect to company financial performance. Company need to socialize company culture with different method. For the future research can develop to how the tax policy can effect to the innovation of company.

Effect of Tax Evasion and Avoidance on Economic Development of Grassroots in Nigeria

This study investigates the impact of tax evasion and avoidance on the economic development of grassroots communities in Nigeria. Taxation is a fundamental component of public finance and is instrumental in supporting socio-economic development. However, the extent to which tax evasion and avoidance affect the economic well-being of grassroots communities has received limited attention in the literature. The study adopted descriptive research method technique. The findings from this research reveal the multifaceted nature of this relationship. Tax evasion is shown to reduce government revenue, exacerbate income inequality, and undermine governance, all of which have adverse effects on the economic development of grassroots communities. Conversely, the impact of tax avoidance is more complex, as it can stimulate investments but also erode government revenue when practiced excessively. It was therefore, recommended the importance of addressing tax evasion and avoidance issues in Nigeria, especially concerning grassroots economic development. It emphasizes the need for more effective tax policies and enforcement mechanisms that promote compliance while encouraging legitimate investment.

Pengaruh Kebijakan Perpajakan pada Perencanaan Pajak dengan Sanksi Administrasi sebagai Pemoderasi

This study aims to determine and obtain empirical evidence of the effect of tax policy on individual taxpayer tax planning, with tax sanctions as a moderating variable at the South Badung Tax Service Office. The research population amounted to 77,248 taxpayers, and we obtained a sample of 100 taxpayers. The analysis technique used in this research is moderated regression analysis (MRA). The results showed that tax policy had a positive effect on tax planning, and administrative sanctions were unable to moderate tax policy on tax planning.

IMPROVING INCOME GENERATION IN OSUN STATE, NIGERIA: THE IMPORTANCE OF TRAINING TAX PERSONNEL FOR REVENUE ENHANCEMENT

The aim of this study was to estimate the influence of training tax personnel on revenue generation, and also to determine the challenges of tax administration in Osun State, Nigeria. This study used a survey research design and collected data from 320 state tax officials using a structured questionnaire. Data analysis was performed using mean, chi-square, and path analysis. The results show that income generation is positively and significantly associated with tax officer training. This finding suggests that income generation is an indicator of tax officer training. The study also found that limited training programs, outdated manual systems, poor technical integration, lack of qualified personnel, lack of tax culture and taxpayer awareness, and lack of resources are the main challenges of tax administration in Osun State Nigeria. The findings of this study has significant policy implications, training tax personnel improves tax compliance, efficient tax administration, fair and equitable taxation, enhanced taxpayer services, increased revenue generation, and better stakeholder engagement. These implications can contribute to a more effective and trusted tax system, benefiting policymakers, taxpayers, and stakeholders alike. The study offers empirical evidence regarding the revenue structure within the state, serving as a basis for the establishment of effective tax policies. Additionally, this research is unique in its utilization of two theories, namely the diffusion theory of taxation and the human capital theory of taxation, to explore the education and motivation of tax collectors. It also highlights how various stakeholders, including tax administrators, policymakers, and civil society organizations, can benefit from the process of tax policy formulation and implementation.

The effect of tighter tax loss offsetting rules on firms' innovation: evidence from South Korea

PurposeThis study investigates how the introduction of a stricter loss carryforward offset rule affects firms' innovation.Design/methodology/approachThis study investigates the overall impact of a Korean tax reform that introduced a tighter loss deduction through a difference-in-differences approach and regression discontinuity design.FindingsThis study finds that firms subject to the more restrictive tax loss offset provisions tend to file fewer patents than firms not subject to the provision. The authors further find that this effect is more pronounced for firms with high R&D intensity, more investment opportunities and weaker monitoring mechanisms.Research limitations/implicationsThe results of this study suggest that more restrictive loss carryforward provisions may deter firms from innovation. This study contributes to the literature on the impact of tax loss rules, the effect of tax policies on investments and the real effects of corporate taxation.Practical implicationsThis study sheds light on the debate of the consequences of a Korean tax reform. Specifically, the authors examine whether a stricter tax loss offset policy indeed dampens corporate innovation.Originality/valueThis study exploits a unique and infrequent exogenous tax policy change. The South Korean tax reform creates a treatment group of large firms that were affected by the tax reform, and a control group of small and medium-sized firms that were unaffected. This study takes advantage of this setting to examine the research question.

Towards full decarbonization: does environmental tax and renewable energy matters in developing countries?

ABSTRACT Despite the role of energy in growth and development, the consumption of fossil fuel rises the global temperature, which poses a significant threat to the full decarbonization agenda of the global community. This study examines the impact of environmental tax and renewable energy on the full decarbonization of 25 developing countries with data from 1993 to 2019. The study used DCCE and CS-ARDL estimators, and the results revealed that environmental tax and renewable energy promote full decarbonization. Moreover, the evidence indicates the validity of the environmental Kuznets curve (EKC) in developing countries, with a turning point at 2.56 in the DCCE to 1.44 in the CS-ARDL. Also, the findings confirmed financial development's role in enhancing renewable energy's impact on full decarbonization in developing countries. Therefore, of this study confirmed the ‘double dividend’ hypothesis that environmental tax policy can mitigate CO2 emissions, correct ecological externalities, and generate revenue. Policymakers in developing countries should strive to undertake tax reform to achieve efficient tax system. In addition, they should formulate and enforce effective environmental tax policies to accelerate full decarbonization and achieve SDGs. Also, massive investment should be channeled to renewable energy projects to provide affordable and cleaner energy, to minimize the consumption of fossil fuel.

“Just BEAT it” do firms reclassify costs to avoid the base erosion and anti-abuse tax (BEAT) of the TCJA?

This study empirically examines whether firms reclassify related-party payments to avoid the base erosion and anti-abuse tax (BEAT) of the Tax Cuts and Jobs Act (TCJA). We leverage the BEAT filing threshold and use both a difference-in-differences design among U.S. firms and a triple-difference design utilizing the parent company's location to provide evidence that firms reclassify related-party payments to avoid the BEAT. This effect is stronger in firms with greater pre-TCJA income shifting incentives. We estimate a $6 billion aggregate reduction in U.S. taxes for our sample firms in 2018. We also examine the consequences of reclassifying related-party payments and find some evidence of an increase in tax reserves and a reduction in internal information quality for firms that engage in cost reclassification to avoid the BEAT. These findings help explain observed BEAT collection shortfalls, contribute to the current policy debate about international tax reform, and document spillover effects of tax policy.

The effects of alcohol tax policies on alcohol consumption and alcohol use disorders in Mainland of China: an interrupted time series analysis from 1961–2019

ABSTRACTBackground: Overwhelming evidence suggests that increasing alcohol taxes is an effective strategy for curbing alcohol consumption. However, research on the effects of such strategies in low- and middle-income nations is limited.Objective: The aim is to explore the temporal effect of alcohol tax policy in China.Methods: We employ interrupted time series analysis to investigate the temporal effects of tax policy changes on alcohol consumption and related consequences in Mainland China from 1961 to 2019. The study population, the total population of mainland region of China, aged more than 15 years.Results: The results show that the volume tax policy, which was announced in 2000 and implemented in 2001, led to an immediate reduction in the alcohol consumption (coefficient = −0.429, p < .001). Following the implementation of higher alcohol taxes in 1998 and 2001, the prevalence of alcohol use disorders (AUDs) and related years lived with disability (YLDs) gradually decreased. The relaxation of tax policy in 2006 led to a significant increase in alcohol consumption, both immediately (coefficient = 0.406, p < .001) and in the middle term (coefficient = 0.495, p < .001), as well as contribute to an immediate or medium term significant increase in the prevalence of AUDs (coefficient = 0.038, p = .010; coefficient = 0.032, p < .001) and YLDs (coefficient = 4.363, p = .001; coefficient = 4.226, p < .001).Conclusion: This study demonstrates that changes in alcohol consumption and related consequences (increase or decrease) have followed corresponding changes in alcohol tax policies (easing or tightening), indicating that increasing alcohol taxes can be an effective strategy in China for controlling alcohol consumption and related harms.

The neutrality principle and the economic efficiency of tax policy: an exploratory study of the legal-economic approach

This study explores the relationship between economic efficiency and the principle of fiscal neutrality and seeks to analyse the application of these concepts in public policy. Economic efficiency is considered one of the main objectives of tax policy and aims at the optimal allocation of public resources. The principle of neutrality seeks to avoid, in response to the effect of tax law enforcement, the existence of distortions in the economy and agents' behaviour. Legal-economic analysis is used to evaluate tax policies, considering the impact of legal rules on decisions and preferences. On the other hand, harmonising efficiency and neutrality criteria are currently considered a real challenge and essential for an exemplary implementation of tax policy. However, it is recognised that no tax is entirely neutral and ex-ante and ex-post analysis is critical to assessing the effectiveness of tax policies.

Environmental taxes and environmental quality in Canada.

This paper aims to capture the effect of environmentally related taxes on environmental quality in Canada while controlling economic growth, financial development, and energy consumption over the period of 1990Q1 to 2020Q4. The present study employs novel econometric approaches, namely, the nonlinear autoregressive distributed lag (N-ARDL) test and the gradual shift causality (GS-C) test. The outcomes of the study reveal that (i) there is long-run cointegration equation between environmental taxes (E-TAX), carbon dioxide emissions (CO2E), economic growth (ECG), financial development (FD), and primary energy consumption (PREC); (ii) E-TAX causes to decrease in environmental degradation in Canada; (iii) PREC and ECG increase (and cause) environmental degradation in Canada; and (iv) financial development also positively affect the environmental sustainability. This effort may also be of great importance for policymakers and decision-makers to better understand the factors of environmental degradation for developing effective tax policies that will alleviate human impacts and contribute to reducing environmental degradation.

Relationship between Income Tax and Profitability of the Hotel Sector in Kenya

Taxation is a global economic phenomenon of paramount importance, serving as a shared fiscal responsibility between citizens and governments. This comprehensive review explores the intricate relationship between income tax and profitability, focusing on corporate tax, Pay as You Earn (PAYE), withholding tax, and their impact on businesses, particularly star-rated hotels in Kenya. The theoretical frameworks of Tax Incidence Theory and Labor Market Theory provide valuable insights into understanding the complex interplay between taxation and profitability in the hospitality industry. Drawing from empirical literature, this review explores studies from Nigeria, Kenya, and Romania, shedding light on the complex relationship between income tax and profitability. It discusses how corporate tax rates, employee income taxes, and other tax-related factors can influence a company's financial performance. This study concludes that there is an intricate negative relationship between income tax and profitability in the context of Kenyan star-rated hotels, considering corporate tax, PAYE, and their implications. The study aims to contribute to effective tax policies that support the industry's sustainable growth in Kenya and potentially other similar industries globally.&#x0D;

State financial policy of economic development

Relevance of the research topic. State financial policy is an important mechanism of economic development. Financial support for the economic development of the state should be based on the use of a set of measures of a balanced budget and tax policy. It is important to improve the mechanisms of state financial policy under the conditions of limited budget resources. Considerable attention of state institutions should be focused on strengthening the stability and capacity of the financial system. Formulation of the problem. State financial policy should be an effective tool for ensuring the development of the economy. Analysis of recent research and publications. The question of the formation and implementation of state financial policy is quite widespread in scientific research. These are the scientific works of famous domestic and foreign scientists: A. Laffer, J. Stiglitz, I. Chugunov, T. Kaneva, L. Lysiak, A. Mazaraki, V. Makogon , M. Pasichnyi, А. Nikitishyn, O. Samoshkina and others. Highlighting unexplored parts of the general problem. The formation and implementation of the state financial policy for the development of the economy is important. It is expedient to implement systemic measures of financial and budgetary regulation taking into account the principles of subsidiarity, transparency and balance, which will contribute to increasing the efficiency of the use of budget funds. Setting the task, the goal of the research. The main tasks of the study are to reveal the essence of the formation and implementation of the state financial policy for the development of the economy, the main areas of improvement of the financial mechanism of economic development, further development of the system of financial support for the development of the economy based on the use of a set of measures of a balanced budget and tax policy. The purpose of the study is to reveal the theoretical foundations and improve the mechanisms of formation and implementation of the state financial policy of economic development. Method or methodology of research. The article uses a set of methods and approaches of scientific research: systemic, factorial, comparative, synthesis, generalization, scientific abstraction and others. Presentation of the main material (results of work). The essence of the formation and implementation of the state financial policy of economic development is disclosed; received further development of the provisions on the system of financial support for the development of the economy based on the use of a set of measures of a balanced budget and tax policy. The theoretical foundations were developed and the financial mechanism of economic development was improved, it was determined that financial policy is an important tool for the development of society, with its help the state has the opportunity to influence the formation and use of financial resources in order to meet public needs. Field of application of results. The results of the research can be used in the process of formation and implementation of the state financial policy. Conclusions according to the article. State financial policy is one of the important tools of influence on the economic development of the country. Important tasks in the conditions of transformational transformations are the implementation of an effective budget and tax policy, increasing the level of transparency of the budget process. In the process of formation and implementation of the state financial policy, it is necessary to ensure the conditions for restoring the trust of subjects of economic relations in the financial system. Further development of approaches to the development of tax policy will provide an opportunity to increase the degree of adaptability of the impact of taxation on the economic environment and the quality level of public finance management.

Does corporate income tax reduction prompt firm export concentration?

Analyzing the impact of changes in corporate income tax policy on firm exports provides a critical assessment of the effectiveness of tax policies in stimulating export growth. It offers insights into the influence of tax policies on intra-firm resource allocation efficiency. However, there is limited attention in the literature devoted to examining firms’ export responses to these tax policy shifts, often overlooking the underlying mechanisms. This study investigates the causal relationship between reduction in corporate income tax rate and adjustment in export structure, employing a difference-in-differences approach and drawing on data from Chinese manufacturing firms between 2000 and 2013. Our findings indicate that China’s corporate income tax reform in 2008 heightened the concentration of firms’ export products by enhancing labor productivity and facilitating the accumulation of fixed assets. Additionally, this tax reduction expanded the range of exported products and increased the proportion of firms’ core and high-technological products.

Taxation and Durable Goods Monopoly*

This paper studies the role of taxation in durable good markets with dynamic monopolies. By conditioning the marginal tax rate on the volume of trade, the regulator can provide incentives for the monopolist to accelerate trade. When marginal cost pricing generates a loss for the monopolist, strategic delay cannot be avoided under regulatory budget constraint and the effects of tax policy depend on the monopolist's ability to commit. In the context of binary consumer types, we find a tax policy involving “back‐loaded subsidy” that achieves the second‐best outcome with commitment. In contrast, without commitment, a “front‐loaded subsidy” improves welfare.

Trickle-down revisited

Abstract:In this paper I discuss what can be learned about ‘trickle-down’ ideas from recent empirical evidence on tax incidence, or the effect of tax policies on the distribution of welfare. I underscore three lessons. First, recent research suggests that business income taxes affect the earnings of workers, but these effects largely derive from taxing rents and rent-sharing, highlighting the importance of these channels for determining the ultimate incidence. Second, when workers are affected by these taxes, the burden is not borne equally by all workers, but predominantly by those at the top of the earnings distribution. Third, across different tax policies that statutorily affect the rich, the burden is largely borne by the rich, but heterogeneity in responses across tax incentives and taxpayers provides context for incidence analyses. Throughout, I discuss the value of analysing heterogeneous responses, particularly how tax incidence depends on labour markets, product markets, and tax systems.

A tale of two taxes: State‐dependency of tax policy

AbstractIn this paper, we build a simple endogenous growth model with labour and corporate taxes to investigate the asymmetric effects of tax policy over the growth trajectory. We employ a newly developed panel smooth transition model to empirically analyse a sample of 19 advanced economies over the 1961–2017 period. We find that both the asymmetric effects and the tax measures used are essential. We also find that the effects of corporate and personal taxes on long‐run growth are non‐linear, while the detrimental effects of personal taxes are empirically larger compared to those of corporate taxes once non‐linearities are controlled for.

Fair Tax Compliance: Tax Rate Changes, Calculation Methods, and System Modernization

This quantitative descriptive study aims to examine the influence of tax rate changes, calculation methods, and system modernization on tax compliance among Small and Medium-sized Enterprise (SME) taxpayers, with tax fairness as a moderating variable. The research was conducted at the South Sidoarjo Pratama Tax Office, with a sample size of 100 SME taxpayers selected using purposive sampling based on turnover and one year of tax registration. Primary data were collected through direct survey questionnaires and analyzed using multiple linear regression analysis and moderated regression analysis with an absolute difference approach. The findings reveal a positive relationship between tax rate changes, calculation methods, and system modernization, and tax compliance among SME taxpayers. These results emphasize the significance of tax fairness in promoting compliance among SMEs, thereby having important implications for tax policy and administration. The study sheds light on the factors that can enhance tax compliance and provides valuable insights for policymakers and tax administrators to foster a fair and effective tax system.&#x0D; Highlights:&#x0D; &#x0D; Tax fairness as a moderating variable: The study investigates the role of tax fairness in influencing tax compliance among SME taxpayers, highlighting the importance of equitable taxation policies and practices.&#x0D; Positive relationship between tax factors and compliance: The research findings reveal a positive association between tax rate changes, calculation methods, system modernization, and tax compliance among SMEs, emphasizing the need for effective tax policies and administration.&#x0D; Implications for tax policy and administration: The study provides valuable insights for policymakers and tax administrators on the significance of tax fairness in promoting compliance among SMEs, guiding the development of fair and effective tax systems to encourage voluntary tax compliance.&#x0D; &#x0D; Keywords: tax compliance, Small and Medium-sized Enterprises (SMEs), tax rate changes, calculation methods, system modernization.