Tax Fairness Research Articles

The Impact of Tax Legislative Disruptions on the Increase of Informal Economic Activities in Egypt

The study examines how legislative instability in tax laws affects the growth of informal economic activities in Egypt. It suggests that unclear or unsustainable tax regulations drive a shift towards the informal sector, fueled by benefits like tax evasion and reduced compliance costs. To encourage voluntary integration, the study proposes measures such as transparent tax laws, awareness campaigns on tax compliance benefits, and simplification of procedures. It advocates for policymakers to prioritize creating an environment conducive to integration over punitive measures. By fostering a fair tax system and addressing underlying factors driving informality, Egypt can boost tax revenue, ensure fairness, and promote sustainable growth. Employing a descriptive-analytical approach, the study analyzes secondary data from official reports, academic literature, and relevant publications. This method allows for a systematic examination of tax legislative disruptions' impact on informal economic activities. It facilitates understanding the dynamics of tax regulations and their effects on informality by analyzing diverse information sources. This approach ensures reliable insights into the relationship between tax laws and the informal economy in Egypt.

Tax Fairness and Public Perception: A Comparative Literature Review

Tax Fairness and Public Perception: A Comparative Literature Review

Environmental Injustice: The Effects of Environmental Taxes on Income Distribution in an Oligopolistic General Equilibrium Model

We apply a static oligopolistic general equilibrium model to investigate the effects of an environmental tax on labor incomes, capital incomes, profits, and the distribution of income. The study is motivated by the fact that environmental taxation is one main political tool to realize environmental sustainability and support sustainable development. However, to ensure social and economic sustainability, the taxes applied must be perceived as fair by the majority of the civil society. Moreover, efforts to determine a fair taxation policy would ensure, inter alia, responsible consumption and production, and lower inequality in the economy, which are one of the two priorities of the United Nations Sustainable Development Goals (SDG 10 and 12). Therefore, it is necessary to determine the tax incidence to inform policymakers regarding the distribution of the tax burden. To examine environmental policy, we assume the government applies a policy objective to realize strong environmental sustainability, as proposed by the Dutch economist Rofie Hueting. The main result is that oligopolistic firms can shift the whole tax burden resulting from environmental taxes to workers and capital owners. Consequently, we show that environmental taxes can lead to more income inequality, and the more concentrated the markets, the bigger the social and economic inequality. Noting that addressing environmental problems is a priority of the UN SDGs, our analysis shows that approaching the issue using just environmental tax propositions is not advisable. These results of the analysis also provide a justification of why many members of the society tend to oppose environmental taxes.

PENGARUH PENGETAHUAN PAJAK, KEADILAN PAJAK, DAN SANKSI PAJAK PP NOMOR 46 TAHUN 2013 TERHADAP KEPATUHAN WAJIB PAJAK UMKM DI KPP BINJAI

This research aims to analyze the influence of tax knowledge, tax justice, tax sanctions on UMKM taxpayer compliance at KPP Pratama Binjai. The population of this research is UMKM taxpayers in Binjai who are registered at the Binjai KPP. The sample for this research is data on UMKM at KPP Binjai and tax revenues for 2017-2020 at KPP Binjai. The analytical method used is multiple linear regression analysis using the SPSS version 25 application. The results of the research show that the Tax Knowledge variable has a significant positive effect on taxpayer compliance, so that the higher the level of tax knowledge, the more obedient they will be in paying taxes. The Tax Fairness variable has a significant positive effect on Taxpayer Compliance. This proves that the more fair perceptions about taxation are formed, the higher the level of Taxpayer Compliance. The Tax Sanctions variable has a significant positive effect on Taxpayer Compliance, this proves that if the Government gives sanctions to people who do not comply with paying taxes then people will be encouraged to pay taxes.

TAX POLICY IN THE WORLD OF SPORT EXEMPLES IN TURKEY, UK, SPANISH, ITALY AND GERMANY

Taxes are the most important source of revenue the state relies on to maintain public services. The basic objective of our tax system is to collect taxes in a fair and balanced manner, within the framework of the principles set out in the Constitution. Taxes on income make up a large proportion of tax revenues. In this context, salary income is taxed under the Income Tax Act and there are special regulations for the salary of athletes for the promotion of sport. Looking at Turkey's tax system, different methods of taxing athlete fees have been applied at different times. Comparisons with other countries show that in Turkey, the income tax rates applied to athlete salaries are relatively low, causing problems in terms of tax fairness. The study examined the legal regulations on the taxation of athlete fees and the implementation processes of these regulations, as well as proposals for the correction of practices that distort tax fairness. Keywords: Taxation of Athletes, Sports Benefit, Income Tax, Tax Justice, Wage Revenue, Athlete Pay

SMART STRATEGIES IN THE INDONESIAN PROPERTY MARKET: TAX AVOIDANCE, PROFITS AND SUPPLY

Tax evasion is common in various sectors, including the property industry in Indonesia. This practice can be carried out through manipulation of financial reports, exploiting legal loopholes, or placing investments in areas with lower taxes. This research focuses on the impact of profitability and inventory intensity on tax avoidance in the property and real estate sector. The sample was selected from property and real estate companies listed on the Indonesia Stock Exchange, taking into account the criteria of financial data availability, reporting consistency and adequate industry representation. The research results show that profitability and inventory intensity have a significant influence on tax avoidance in this sector. These findings provide important insights for financial practitioners and regulators in developing more effective and fair tax policies. With a better understanding of the factors that influence tax avoidance, regulators can design more careful policies to prevent practices that harm state tax revenues and create equality in the tax system.

Tax Knowledge, Trust in Government, and Voluntary Tax Compliance: Insights From an Emerging Economy

This paper examines whether tax knowledge, tax fairness and trust affect voluntary tax compliance among small and medium enterprises (SMEs). Given the growing budget deficits and debt levels of developing economies, we contend that an understanding of the factors associated with voluntary tax compliance among SMEs could enhance tax revenue mobilization. Although the majority of businesses are SMEs, questions about their tax compliance have become topical among stakeholders due to perceived low levels of compliance, hence, an investigation into the factors underlying their tax compliance behavior is critical for stakeholders, particularly governments and tax authorities. We used a survey-based approach to sample 341 SMEs operating within Ghana’s oil city of Secondi-Takoradi. We employed the structural equation modeling (SEM) technique to analyze the retrieved data. Generally, our empirical results indicate that social factors and behavioral motivations are key determinants of voluntary tax compliance among SMEs in Ghana. Specifically, our results suggest that SMEs’ perception of tax fairness, knowledge about the tax system, and trust in government are significant predictors of voluntary tax compliance. Additionally, we find a significant mediating role of tax fairness in the relationship between tax knowledge and voluntary tax compliance. As governments seek to raise tax revenues and manage public debt, our results provide important insights into social and behavioral factors that could aid in enhancing tax compliance.

Article: Digital Services Tax: Analytical View of Challenges and Successes in Kenya and the United Kingdom

The rapid expansion of digital services is dramatically reshaping the panorama of global taxation. This transformation is notably impacting multinational enterprises (MNEs) that operate in countries where they lack a physical presence. In this study, the authors focus the attention on the implications of digital services offered by these non-resident MNEs operating in the Republic of Kenya and the United Kingdom and representing developing and developed economies, respectively. The article delves into how the burgeoning digital economy challenges international tax laws by scrutinizing the implementation of the digital service tax (24DST) and highlighting the weaknesses of the two-pillar plan in comprehensively addressing the digitalization of the economy. It also broadens the comprehension of the unique obstacles and potential opportunities inherent in the digital economy from an international taxation perspective. The significance of this research lies in its potential to inform tax policy in an increasingly digitalized global economy. Policymakers can develop strategies that are more effective in ensuring fair taxation practices by understanding the nuanced interactions between digital services and international tax regulations. Additionally, MNEs can use this research to better navigate the complex tax implications of their digital services in various economic contexts and thereby foster sustainable and ethical business practices. Digital economy, digital service tax (DST), Kenya, multinational enterprises (MNEs), organisation for economic co-operation and development (OECD), pillar one and pillar two, taxation, tax base, unilateral tax measure, United Kingdom (UK).

Analisis Pengaruh Keadilan Pajak, Kesederhanaan Pajak dan Pengetahuan Pajak Terhadap Kepatuhan Pajak Pelaku UMKM

The primary source of revenue for a country primarily comes from tax receipts. One of the key supports for tax revenue is the tax payments made by micro, small, and medium-sized enterprises (MSMEs). Only now, the tax payments made by MSMEs have been perceived as not contributing maximally to the state's revenue. The government has made efforts to enhance tax revenue by providing tax facilities, aiming to promote fairness and simplify tax administration for taxpayers, with the hope of achieving a sense of justice and administrative efficiency in tax compliance, which is expected to increase the willingness of taxpayers to fulfill their tax obligations. This research is conducted to determine the influence of tax fairness, tax simplicity, and tax knowledge possessed by MSME taxpayers on their compliance with tax obligations based on tax regulations. The independent variables in this study are tax fairness, tax simplicity, and tax knowledge, while tax compliance by MSME taxpayers is tested as the dependent variable. The population in this research includes 50 samples of individual MSME taxpayers in the Kramatwatu District, Serang Regency, Banten. The data collected is processed using the SPSS program with multiple linear regression analysis. The results obtained from this research show that tax fairness and tax simplicity have a significant impact on the tax compliance of individual MSME taxpayers in the Kramatwatu District, Serang Regency. In contrast, tax knowledge does not have a significant influence.

LEGAL FRAMEWORKS AND TAX COMPLIANCE IN THE DIGITAL ECONOMY: A FINANCE PERSPECTIVE

In the wake of rapid digitalization, the landscape of commerce has undergone a profound transformation, presenting unprecedented challenges to traditional tax systems and legal frameworks. This abstract examines the evolving dynamics of tax compliance within the digital economy through the lens of finance. The digital economy encompasses a broad spectrum of economic activities facilitated by digital technologies, including e-commerce, digital platforms, and virtual currencies. These innovations have blurred the boundaries of traditional tax jurisdictions, leading to complexities in determining tax liabilities and enforcement mechanisms. As such, the adequacy of existing legal frameworks in addressing tax challenges posed by the digital economy has come under scrutiny. From a finance perspective, ensuring tax compliance in the digital economy involves understanding the intricate interplay between technology, business models, and regulatory frameworks. Digital businesses often operate across multiple jurisdictions, exploiting loopholes and jurisdictional discrepancies to minimize tax obligations. Such practices have raised concerns regarding tax fairness and the erosion of tax bases, prompting policymakers to explore new regulatory approaches. One key aspect of addressing tax compliance in the digital economy is the development of international cooperation and coordination mechanisms. Given the transnational nature of digital transactions, effective tax enforcement requires collaboration among countries to combat tax evasion and profit shifting. Initiatives such as the Base Erosion and Profit Shifting (BEPS) project by the OECD seek to establish common standards and guidelines for taxing digital businesses. Moreover, the emergence of innovative technologies, such as blockchain and artificial intelligence, presents both opportunities and challenges for tax authorities. While these technologies offer potential solutions for enhancing tax administration and enforcement, they also introduce new complexities, such as the anonymity of transactions and the difficulty of tracking digital assets. Navigating the complexities of tax compliance in the digital economy requires a multifaceted approach that integrates legal, technological, and financial perspectives. By fostering international cooperation, leveraging technological innovations, and adapting regulatory frameworks, policymakers can mitigate tax challenges and promote a fair and sustainable tax system in the digital age.
 Keywords: Tax, Digital Economy, Finance, Legal, Review.

LEGAL FRAMEWORKS AND TAX COMPLIANCE IN THE DIGITAL ECONOMY: A FINANCE PERSPECTIVE

In the wake of rapid digitalization, the landscape of commerce has undergone a profound transformation, presenting unprecedented challenges to traditional tax systems and legal frameworks. This abstract examines the evolving dynamics of tax compliance within the digital economy through the lens of finance. The digital economy encompasses a broad spectrum of economic activities facilitated by digital technologies, including e-commerce, digital platforms, and virtual currencies. These innovations have blurred the boundaries of traditional tax jurisdictions, leading to complexities in determining tax liabilities and enforcement mechanisms. As such, the adequacy of existing legal frameworks in addressing tax challenges posed by the digital economy has come under scrutiny. From a finance perspective, ensuring tax compliance in the digital economy involves understanding the intricate interplay between technology, business models, and regulatory frameworks. Digital businesses often operate across multiple jurisdictions, exploiting loopholes and jurisdictional discrepancies to minimize tax obligations. Such practices have raised concerns regarding tax fairness and the erosion of tax bases, prompting policymakers to explore new regulatory approaches. One key aspect of addressing tax compliance in the digital economy is the development of international cooperation and coordination mechanisms. Given the transnational nature of digital transactions, effective tax enforcement requires collaboration among countries to combat tax evasion and profit shifting. Initiatives such as the Base Erosion and Profit Shifting (BEPS) project by the OECD seek to establish common standards and guidelines for taxing digital businesses. Moreover, the emergence of innovative technologies, such as blockchain and artificial intelligence, presents both opportunities and challenges for tax authorities. While these technologies offer potential solutions for enhancing tax administration and enforcement, they also introduce new complexities, such as the anonymity of transactions and the difficulty of tracking digital assets. Navigating the complexities of tax compliance in the digital economy requires a multifaceted approach that integrates legal, technological, and financial perspectives. By fostering international cooperation, leveraging technological innovations, and adapting regulatory frameworks, policymakers can mitigate tax challenges and promote a fair and sustainable tax system in the digital age.
 Keywords: Tax, Digital Economy, Finance, Legal, Review.

Pengaruh Sistem Perpajakan, Keadilan, dan Teknologi Terhadap Persepsi Wajib Pajak Orang Pribadi Atas Perilaku Penggelapan Pajak Pada Kantor Pelayanan Pajak Pratama Pekanbaru Tampan

The purpose of this research is to determine the influence of the tax system, justice and tax technology on individual taxpayers' perceptions of tax evasion behavior at KPP Pratama Pekanbaru Tampan. The population in this study are individual taxpayers registered at KPP Pratama Pekanbaru Tampan. The number of research samples was determined using the Slovin formula, so that the sample size was 100. This research used primary data in the form of a questionnaire. The analytical method carried out in this research is multiple linear regression analysis using the SPSS version 26 program. The results of the research can prove that tax fairness, the tax system and technology can influence tax evasion at KPP Pratama Pekanbaru Tampan.

Compensation and Tax Fairness: Evidence From Four Countries

Abstract This paper uses a conjoint survey experiment fielded in the US, Australia, Chile, and Argentina to develop and test the compensatory theory of tax fairness, which states that higher taxes on the rich can be used to compensate for other benefits unequally granted by the state. Drawing on social psychology, this paper argues that evidence of preferential treatment by the state violates well-established fairness principles and shows, experimentally, that it leads to taxation to restore equality in crisis times, irrespective of wealth and across a variety of settings. The paper makes two important contributions: it provides the first direct, causal evidence of the importance of compensatory arguments for tax preferences and presents unconfounded estimates of the effect of more established fairness considerations as benchmarks against which to compare the importance of compensatory arguments.

Analysis of the Effect of Tax Fairness and Complexity on Economic Welfare in Iran

Analysis of the Effect of Tax Fairness and Complexity on Economic Welfare in Iran

Tax Compliance in Slovenia: An Empirical Assessment of Tax Knowledge and Fairness Perception

Complex tax systems can result in tax evasion, which further impacts the revenues necessary to achieve sustainable development goals. Enhancing taxpayer education, tax knowledge, and tax fairness perception is essential for boosting revenues to support societal sustainability. The aim of this study was to assess the levels of tax knowledge and tax fairness perception within the Slovene taxpayer population, with a specific focus on the differences related to gender and settlement size. Further, the connections between tax knowledge and various aspects of tax fairness were explored. The Kruskal–Wallis test was used to assess the statistical significance of gender and settlement size differences and the Kendall’s coefficient of rank to determine the association between the tax knowledge and fairness perception dimensions. The results provide evidence that highlights disparities in tax knowledge between male and female taxpayers (p-value = 0.0116). Additionally, this study demonstrates that settlement size does not significantly impact tax knowledge perception among Slovene taxpayers (p-value = 0.2067). However, tax fairness encompasses various dimensions, and our research reveals no disparities based on gender (p-value = 0.7263) or settlement size (p-value = 0.2786). When assessing the correlation between tax knowledge and tax fairness perception, the results indicate statistically significant but weak correlations in both directions, depending on the specific fairness dimension.

Poverty, redistribution, and the middle class: redistribution via probability distributions vs. redistribution via the linear income tax system.

It has been known for a long time that (1) when graphs of income amount on income relative rank for two income distributions intersect twice, three "transfer groups" are generated, with the poorest and richest both gaining under the same alternative income distribution and the middle group losing; and (2) the linear income tax system satisfies three fundamental principles of tax justice, namely, that as pretax income increases, three quantities should also increase-posttax income, tax amount, and tax rate. This paper links those two ideas, suggesting that the linear income tax system may be the natural and most effective way to guard against poverty reduction policies which, while helping the poorest, as urged by Rawls, may harm the middle, contributing to the weakening of the middle class, thought at least since Aristotle to be the backbone of society. This paper illustrates the two approaches with one initial distribution and three alternative final distributions, contrasting their minimum, median, proportion below the mean, and inequality. It also shows how to guard the linear income tax system against violating the tax amount principle of tax fairness when there is an injection of resources (e.g., from deficit spending or oil revenues) and how to empirically estimate the parameters (e.g., the marginal tax rate) of the linear income system that the population will regard as fair.

Fair Taxation in the Digital Age: Can the OECD Two-Pillar Solution Replace Digital Services Taxes?

Since the emergence of the digital economy at the turn of the 21st century, multinational companies have exploited the inadequacy of international tax regulations to avoid taxation. So far, states and international organisations have been unable to remedy the situation. In recent years, the former have taken the lead in introducing digital services taxes, allowing them to recoup some of the lost tax revenue, at the cost of unilateralism that is damaging to the international tax environment. Meanwhile, the OECD has put forward a multilateral solution aimed at preventing tax avoidance and ensuring a fair international tax system. This article aims at showing how profound an impact a digitalising economy has had on international taxation and to assess the respective merits and prospects of national as well as international solutions presented. Such an assessment is to be made in terms of both tax certainty as well as compatibility with constitutional and treaty provisions. It concludes that digital services taxes, despite serious shortcomings, have proven a necessary step until a multilateral agreement becomes enforceable. The latter remains nonetheless essential in ensuring multinational enterprises contribute their fair share of taxes.

Individual Taxpayers’ Compliance Behaviour and Tax Revenue Generation in Akwa Ibom State

The problem of tax evasion and non-compliance by individual taxpayer has created significant challenges for the Akwa Ibom Staten tax system. Based on this study examined that relationship between individual taxpayers’ compliance behavior and tax revenue generation in Akwa Ibom State. Specifically, the study ought to determine the relationship between knowledge of tax obligation and tax collection efficiency in Akwa Ibom State, to ascertain the relationship between perceived ease of tax procedures and tax collection efficiency in Akwa Ibom State and to assess the relationship between perception of tax fairness and tax collection efficiency in Akwa Ibom State. This study adopted the survey design. Purposively, a sample of one-hundred and forty-five (145) tax officials/experts was drawn in order to attain the study objectives. The data collected was coded, transformed and analyzed using multiple regression via Statistical Package for Social Sciences software (SPSS) and presented by use of tables. The study findings revealed that knowledge of tax obligation has a positive significant relationship (Coeff. =0.171{0.035}) with tax collection efficiency in Akwa Ibom State while perceived ease of tax procedures has a positive significant relationship (Coeff. =0.228{0.005}) with tax collection efficiency in Akwa Ibom State. It also revealed that perceived ease of tax fairness has a positive significant relationship (Coeff. =0.267{0.001}) with tax collection efficiency in Akwa Ibom State. Based on the analysis of variance (ANOVA), the F-change test showed that the overall effect was statistically significant (p-value = 0.000<0.05) and was however concluded that taxpayers’ compliance behavior plays a significant role in enhancing tax revenue generation in Akwa Ibom State. The study recommended, amongst others, that tax authorities should streamline and simplify the tax filing process by creating user-friendly online platforms, providing clear instructions, and reducing unnecessary complexities.

A study on the "Porter Hypothesis" effect of the regulatory measures of the environmental protection tax law in the post-pandemic era.

The implementation of the Environmental Protection Tax Law was a significant milestone in China's environmental tax reform. The implementation of this law was influenced throughout the three-year period of epidemic prevention and control (from early 2020 to the end of 2022). Heavily polluting enterprises are the primary focus of regulations under the Environmental Protection Tax Law. This study conducts an empirical analysis using a structural equation model, leveraging sample data obtained from heavily polluting enterprises in China. The findings indicate that during the three-year period of epidemic prevention and control, the Porter Hypothesis effect was realized in terms of tax fairness but not in terms of tax rationality. Therefore, environmental tax law reforms should be pursued and tax authorities in China should make vigorous efforts to enhance the rationality of environmental taxation. This would improve the comprehensiveness of the "Porter Hypothesis" effect, fully harnessing the dual functions of environmental protection and the economic driving force embodied by the Environmental Protection Tax Law.

Impact of attitude variables, Tax rate and perceptions of government fairness on Tax Compliance

This study aims to scrutinize the interconnection between attitude variables and tax compliance behavior of the taxpayers. The survey research study regarding the people’s attitude towards taxation is carried out in Hetauda Sub–Metropolitan City of Makawanpur district in June 2020. The sample size of this study encompassed 300 taxpayers selected randomly from entire population. The questionnaire involved twenty-seven five-point Likert scale questions, and seventeen categorical type questions were asked to the respondents. The study applied the logistic regression model to measure the effect of attitude on tax compliance behavior. This research study has some policy implications for encouraging the government to improve tax policy of the nation. The fairness of the tax system definitely affected the tax acquiescence behavior. The respondents doubted the fairness of the government concerning taxation based on data. The collective attitude of the taxpayers was highly negative among different taxpayers under the tax rate and government fairness. The results of the study revealed that taxation policy design and implementation mattered to taxpayers in Nepal. It further recommends the tax administration to reduce tax rates and adopt fair tax strategies for the welfare and justice of the various tax payers. A low tax compliance problem is related to low tax revenue of a particular country. The beauty of this study is to bridge the knowledge gap of emerging issue of the tax compliance behavior in several ways.