Fiscal Instruments Research Articles

Fiscal incentives for improved forest management and deforestation-free agricultural commodities in Central and West Africa

Until recently, little or no use was made of fiscal instruments for forest protection in developing countries. The rise of independent third-party certification systems since the 1990s opens new perspectives for using taxation as an incentive. In the forestry sector, certification has developed significantly in Central Africa but reached a plateau in the last ten years, apparently due to the reorientation of timber export flows towards Asian markets that do not demand certified products. Fiscal incentives, through tax cuts for responsible producers, could compensate for the absence of price premiums but would diminish public revenues. The principle of the "bonus-malus" (feebates) seems promising to the extent that it does not reduce government budgetary revenues (budget neutrality). Bonus-malus schemes can also promote certified "zero deforestation" or "grown in agroforestry" agricultural production, especially cocoa, a significant driver of deforestation in Africa. Governments can select one or several certification schemes, private or public ones, and target fiscal incentives related to these certified products. The peculiarity of a bonus-malus system is that the revenues generated by the malus are expected to decrease progressively (with the adoption of certification), requiring a reduction of the bonus rates in order to respect budget neutrality. Adopting such a scheme would create winners and losers, therefore, complementary policy measures targeting small-scale producers are desirable.

Negociación, lágrimas y maldiciones: La fiscalidad extraordinaria en la monarquía hispánica, 1620–1814

Negociación, lágrimas y maldiciones: La fiscalidad extraordinaria en la monarquía hispánica, 1620–1814

Cash Waqf Linked Sukuk Through Securities Crowdfunding in Indonesia

Islamic charitable innovations have evolved to give rise to the integration between Sukuk and cash waqf called Cash Waqf Linked Sukuk (CWLS). The integration of these two things is promising when combined, considering that Sukuk has long been named a commercial sharia instrument that aims to raise funds, while cash waqf as a sharia social instrument has played a philanthropic role. As for Indonesia, The cash waqf combined with Sukuk has become a new fiscal instrument because it has advantages in addition to contributing to development, furthermore, the returns obtained are reused into waqf money for socio-economic projects and funds invested be returned at maturity. As a legal research, this article uses qualitative analysis with statutory approaches and conceptual approaches. This article intends to introduce a new conceptual framework model innovation between CWLS and fintech types of Islamic securities crowdfunding. This innovation is for no reason considering that the use of fintech types of Islamic securities crowdfunding makes CWLS more popular and more flexible so that the funds raised are expected to be larger and can reach the broader community for the construction of more massive socio-economic projects. Furthermore, this article provides an overview of the proposed innovations in achieving the goals of maqasid al-shariah, regulations, and opportunities and challenges to be implemented in Indonesia.

Development of a Model of Utilizing Cash Wakaf to Realize a Legal Tourism Area in Medan City

Today's cash waqf has become one of the financing alternatives for fiscal instruments in the economy. The understanding of the benefits of waqf, which so far has only been used for direct worship facilities such as mosques and cemeteries, has shifted in a broader direction, especially to improve welfare and the economy. Cash waqf has two functions: as a means of worship and as a means of improving social welfare. Returns from the management of cash waqf can be used as instruments in poverty alleviation programs through the development of MSMEs and the establishment of tourist areas. The impact of developing tourist areas will be felt directly by the community if, in these tourist areas, MSMEs grow and develop. The utilization of productive waqf with the management of Hajj funds is in accordance with the intent of Law Number 34 of 2014 concerning Hajj Financial Management and Law Number 41 of 2004 concerning Waqf, both of which aim to provide benefit to Muslims. In its implementation, the utilization of waqf funds can be made into a hotel project or infrastructure supporting halal tourism, such as airports, MSME kiosks, and so on. Then the profits obtained will be channeled for the benefit of the people. On the other hand, the development of halal tourism facilities and infrastructure also creates jobs. In addition, Indonesia is already known as a Muslim-friendly tourist destination. This development of halal tourism can optimize Indonesian tourist destinations as Muslim-friendly tourist destinations. Cash waqf as a means of financing can be used for more than one particular sector and only certain models. Cash waqf can be used as an alternative solution for financing all sectors that support the economy, both for consumptive and productive purposes. The benefits of cash waqf for the productive sector can be realized by increasing community capital in developing their businesses, both for basic business capital and for supporting capital for their businesses. What about the attractive design and appearance of the area surrounding where they are attempting to become a community destination for visiting?

Fiscal DSGE model for Latvia

ABSTRACT We develop a fiscal dynamic stochastic general equilibrium (DSGE) model for policy simulation and scenario analysis purposes tailored to Latvia, a small open economy in a monetary union. The fiscal sector elements comprise public investment, public consumption, government transfers that are asymmetrically directed to both optimizing and restricted (hand-to-mouth) households, cyclical unemployment benefits, foreign ownership of public debt, import content in public consumption and investment, and fiscal rules for each fiscal instrument. The model features a search-and-matching labour market friction with pro-cyclical labour costs, a financial accelerator mechanism, and import content in final goods. We estimate the model using Latvian data, study the new channels in the model, and provide a comprehensive analysis on the macroeconomic effects of the fiscal elements. Our results indicate that Latvian fiscal policy was pro-cyclical during the boom-bust period of 2004–2010 and that foreign ownership of public debt breaks Ricardian equivalence and raises fiscal multipliers.

The Climate Change Challenge and Fiscal Instruments and Policies in the EU

The Climate Change Challenge and Fiscal Instruments and Policies in the EU

Modernization of monetary and financial instruments in economic management in the Republic of Kazakhstan

This article discusses the issues of execution of the order of the Head of State K.-Zh.Tokayev in the framework of the Address to the People of Kazakhstan dated September 1, 2022, related to the new economic policy, including the development of a new Tax Code. In order to develop practical recommendations for the development of this normative legal act, an analysis of the effectiveness of the functioning of the current tax system of the Republic of Kazakhstan was carried out, its shortcomings and ways to eliminate them were identified. To resolve pricing issues, the elements of the monetary system were considered, measures were identified that contribute to the systemic regulation of monetary circulation in the country and proposals for the effective functioning of the financial system were developed. Within the framework of solving the tasks of transition from "budget management" to "results management" by using methods of analysis and synthesis, comparison, statistical analysis, the existing mechanisms of budget planning and execution are identified and measures are proposed to revise and improve budget tools in the New Budget Code. The proposed measures are aimed at modernizing monetary and fiscal instruments and implementing a new economic policy in the republic

The Impact of Indirect Taxation on Inequality in Russia

The purpose of this study is to consider the effects of indirect taxes, VAT in particular, on inequality. The study tests the hypothesis that indirect taxation in Russia does not have a significant impact on inequality but has a potential to reduce it. Methodologically, the study relies on correlation regression analysis, time series analysis, structural analysis and the index method. The data used for the analysis are provided by the Federal State Statistics Service (Rosstat) and Federal Tax Service for the period from 1992 to 2021. Calculations were conducted with the help of Data Analysis ToolPak in MS Excel. A classification of the types of economic inequality is proposed together with the corresponding fiscal instruments used to tackle each type. Indirect taxes are considered to be capable of reducing consumption inequality. To evaluate the influence of indirect taxation on inequality, the following parameters were considered: VAT-to-GDP ratio and the share of VAT in total tax revenues of the consolidated budget, share of revenue raised through 10% VAT in the total volume of VAT, and the decile ratio of consumption spending. It was found that indirect taxes in Russia do not have a significant impact on inequality. Although in some years VAT receipts accounted for a larger share in total tax revenues and in GDP and this trend was accompanied by lower levels of inequality, this happened because of the influence of other factors, for example, the use of the progressive scale of the personal income tax in the 1990s. To reduce inequality, a viable solution for the government would be to apply a system of differentiated VAT rates to balance disparities in consumption of the wealthiest and poorest households (these differences are reflected in Rosstat data on consumption). Moreover, since utilities, telecommunications and food constitute up to 70% of the poor’s expenditures, it would make sense to lower the VAT rate for these categories of goods and services while raising the rate for such categories as hospitality services, cafes and restaurants, recreation and leisure services because in total, these categories account for 13.2% of the expenditures of the wealthiest households. Unfortunately, in 2022, the government took the decision to apply zero-rated VAT to these services as part of the anti-crisis program.

Exchange Controls as a Fiscal Instrument

Exchange Controls as a Fiscal Instrument

Fiscal Deficit Expansion and External Sector Imbalance in Nigeria: Implications for Monetary Policy

The recent phenomenon of increasing deficit financing as a preferred fiscal instrument by resource-rich emerging economies calls for an understanding of an optimal level of deficit financing and the fleeting effects on aspects of international accounts, to allay external sector imbalances. This paper fills the void by using the Structural Vector Autoregressive (SVAR) framework to examine the interrelationship between fiscal deficit and external sector and the implications for monetary policy in Nigeria. In furtherance of the above, the study incorporates three key monetary policy transmission channels – money supply, interest rates and exchange rates – to the SVAR model, due to the vital role they play in the macroeconomy thus, establishing the effects of shocks from fiscal and current account deficits. Using data for the period 2000-2021, we found that a shock to fiscal deficit as a share of GDP causes a decline in current account deficit in the fourth period and vice-versa for a shock to the current account balance. However, there are no significant impacts in the first three periods. This implies a bi-directional causal relationship between fiscal deficit expansion and external sector imbalances. We further observe a detrimental effect of increase in fiscal deficit on interest and exchange rates. Quite saliently, our forecast analysis shows that Current account deficit is strongly influenced by exchange rate, while other variables are strongly exogenous. The ensuing policy implications and recommendations are noteworthy.

Podatki środowiskowe w kształtowaniu zrównoważonej produkcji i konsumpcji w krajach Unii Europejskiej

Purpose – The aim of this article is to assess the impact of environmental taxes in terms of sustainable consumption and production. Examination of the correlation between environmental tax revenues in the European Union countries and sustainable consumption and production indicators will allow us to make this assessment. Research method – The study used the method of literature analysis and comparative analysis using structure, dynamics, correlation, median and arithmetic mean indicators. The numerical data for the research were obtained from the Eurostat database. Goal no 12 performance indicators were used as a variable to measure the impact of environmental taxes in each Member State. Results – The results of the correlation analysis conducted clearly indicate that in the case of the indicators: energy productivity, average CO2 emissions of new passenger cars per 1 km, consumption of materials in a closed loop, and the gross value of goods in the sector of environmental goods and services, significant relationships were obtained in a large group of EU countries in the desired directions. The hypothesis has been positively verified. Originality / value / implications / recommendations – It is very important from the point of view of sustainable development, and especially sustainable consumption, to define the role of tax fiscal instruments. As an important instrument of public finance, they should support the implementation of sustainable development goals. As a result of the conducted analyses, an attempt will be made to formulate recommendations in terms of the functioning of tax fiscal instruments for sustainable development.

Factors affecting the use of tax preferences for research and development in Poland

Purpose – The objective of the article is to identify the factors affecting the use of R&D tax preferences in Poland. Research method – Qualitative and quantitative analysis, synthesis, deduction, induction, and inference by analogy. The study involved a group of 350 enterprises from the Lower Silesia Province in the high and medium-high technology sector and used the CATI survey methodology. The collected data was subjected to statistical analysis, including correlation and significance analysis. Results – The study investigates the reasons for not using tax preferences, the barriers to their use, and proposals of respondents (companies surveyed) regarding changes to the tax preferences. The main factors identified include appropriate organisation of R&D in the enterprise, cooperation with research entities, and knowledge of fiscal instruments supporting the development of R&D. Originality / value / implications / recommendations – Tax preferences (R&D tax relief and IP Box) are not used on a large scale and entrepreneurs say they have difficulty with using them. This study confirms that there are certain factors affecting the implementation of R&D and the use of tax preferences. So far, no attempt has been made to link the reasons for not using tax preferences, the barriers to their use, and the entrepreneurs’ proposals for changes so as to clearly identify the key factors affecting the use of effective legal solutions.

SOCIAL AND ECONOMIC JUSTIFICATION OF WEALTH

The purpose of the paper is to study current issues of wealth, which is due to current sustainable trends in wealth growth and increasing the number of wealthy individuals. The aim is to determine the nature, prerequisites for the emergence and development of wealth, as well as to reflect the historical aspects of the development of wealth and its current state. The topic of the article is caused by the need to reveal the modern stratification of social strata by the level of wealth, the formation of a wealthy class of society and its growth, the processes of creation and increase of wealth. At the same time the purpose of the article is to study the property as an object of taxation. In this connection, the economic essence of the wealth tax and the conditions of its introduction are considered, the specificity of the functioning of the wealth tax in the market economy is determined, the main features of the functioning of the wealth tax are identified. Methodology. Proper analysis of the social structure of society in terms of material wealth allows to assess the efficiency of the economy and the quality of public policy in the system of creation and distribution of public revenues, public goods and wealth. Without the results of these calculations, fatal mistakes appear in the choice of state priorities of socio-economic policy and the best decisions in the financial sphere. The study is based on a comparison of data on wealth tax in different countries. Results. The question and modern peculiarities of wealth are studied. The value of wealth for the society and the state is determined. Wealth tax is an effective fiscal instrument of the state in the distribution of public revenues. Wealth tax exists in many countries in different forms. Practical implications. The possibilities for improving well-being and increasing prosperity are explored. Adequate assessment of the level of well-being and wealth would enable the state to carry out a balanced and effective socio-economic and financial policy to stabilize society and adopt a stable public order. The financial essence of the property tax and the conditions for its introduction are studied. The peculiarities of the functioning of the wealth tax in the social market economy are considered. Value/originality. It has been established that wealth – a comprehensive, multifaceted category, which can be characterized as a specific feature of the socio-economic structure of society, which determines its state, results, dynamics and tendencies of development. Wealth characterizes the ability to achieve a positive result (effect) in the market conditions of management and use of the existing social and economic potential in the community, as evidenced by its level of civilizational development. The peculiarities of the functioning of the wealth tax in various countries of the world are considered. The use of the wealth tax as a fiscal instrument in the state tax system is suggested.

LUMP-SUM TAX IS AN ALTERNATIVE TO WEALTH TAXATION

The purpose of the article is to study the topical issues of wealth taxation, which is due to the established stable trends of growth of welfare of market participants. This study can be considered relevant and in demand based on the steady trend of enrichment that has taken hold in the world. This is a consequence of the accelerated pace of economic progress aimed at improving the well-being of individuals. Modern society is characterized by a noticeable increase in the number of wealthy people and an increase in the level of well-being in general. The number of wealthy individuals is especially growing. The purpose of this paper is to determine the essence of taxation of wealthy individuals. The topic of the article is driven by the need to disclose various forms and methods of taxation of wealthy individuals. At the same time, the purpose of the article is to study not the taxation of wealth, but rather the taxation of wealthy individuals. In this regard, the mechanism of one-time taxation is considered. Methodology. A correct analysis of the structure of wealth and wealthy citizens in society makes it possible to assess the effectiveness of specific forms of taxation, including one-time taxation. Results. The article examines the issues and current specifics of the lump-sum tax. The lump-sum tax is currently applied only in some countries, but it is quite effective. Practical implications. The peculiarities of the application of a one-time tax for wealthy individuals are investigated. The economic essence of the one-time tax is investigated. The specifics of the functioning of a one-time tax for wealthy individuals in some countries of the world are considered. Value/originality. It is found that wealth is a complex, multifaceted category which can be characterized as a specific characteristic of the socio-economic structure of society, which determines its status, results, dynamics and development trends. The features of the functioning of the one-time tax in different countries of the world are considered. The use of a one-time tax as a fiscal instrument in the tax system of the state is proposed.

Penyelamatan ukm dari guncangan wabah sars-cov-2: Sebuah kasus dari Samarinda, Indonesia

Covid-19 does not only threaten the health aspect, but also threatens social tensions and the economic order. The existence of Small and Medium Enterprises (SMEs) is at the point of collapse. If it is not anticipated through comprehensive reform efforts, then the existence of SMEs is only a discourse and will slowly sink. This article aims to investigate the effects of the pandemic on the SMEs sector in Samarinda City. The method uses a qualitative-case study approach. Referring to the exploratory review, two points are concluded. First, the initial conditions (before Covid-19), the reputation of SMEs classified as "not severe" reached 92.7 percent, while only 1 percent of SMEs were "severe" and 6.3 percent "moderate". Second, after the emergence of Covid-19, there appeared to be significant changes, where there were 56.8 percent of SMEs in "severe" capacities, only a few of them were "not severe" or 15.4 percent, and 27.8 percent were "moderate". Technically, Covid-19 is a holistic cause in the decline in the growth of SMEs in Samarinda City. Additional alternatives are designed to urge and reconstruct the National Economic Recovery (PEN) through the actualization of fiscal instruments (capital assistance, tax relaxation and implementation of partnerships) for SME activists.

DAMPAK KEBIJAKAN PENGALIHAN SUBSIDI BBM DI TENGAH KRISIS MULTINASIONAL TERHADAP INFLASI DAN PERTUMBUHAN EKONOMI DI INDONESIA

The transfer of fuel subsidies of Indonesia’s State Budget (APBN) has been carried out several times with purpose to balance the ability of the government's State Budget in facing the challenges of the global economy. In the middle of Indonesia's economic recovery, the government re-implemented the transfer of fuel subsidies which was triggered by an increase in the price of crude oil commodities due to the geopolitical war between Russia and Ukraine. The limited capacity of the APBN and to improve the distributing of the subsidies, then Rp. 502.4 trillion of the subsidy budget allocation stipulated in Presidential Regulation 98 of 2022 has been diverted. The multiplier effect due to rising fuel prices which has the potential to increase other commodity prices resulting in a significant increase in national inflation and a slowdown in economic growth due to inflation are the main risks of this policy. Utilizing government fiscal instruments, as well as improve collaboration between institutions in the monetary sector (Indonesian Bank), the government of the Republic of Indonesia succeeded in implementing the transfer of fuel subsidies while maintaining the national inflation rate below 6 percent until November 2022 and maintaining the national economic growth rate in the third quarter of 2022.

Фіскальні інструменти розвитку цифрової економіки

Abstract. Introduction. Digitization processes are objective and today play an important role in the development of modern society and its individual spheres. Penetrating into social relations, digital technologies change them, contributing to their gradual development. The national economy as an integral component of the economic system today is significantly influenced by modern information and communication technologies. Such technologies have already penetrated all spheres of economic life, changing the economic behavior of economic entities. Accordingly, ensuring the development of the country's economy without using the potential of these technologies is no longer possible today, since digital technologies create all the conditions for increasing the level of the country's competitiveness in the global economic space. This determines the importance of finding mechanisms to activate the digitalization process within the national economy. Purpose. The main goal of this article is to study the possibilities of using fiscal instruments by state authorities and local self-governments for the formation of a digital economy. Results. It is possible to ensure the stimulation of the development of the digital economy in the country only on the basis of the use of the mechanism of state regulation of the economy, in which one of the most important roles is played by fiscal instruments. It is thanks to the use of these tools that state and local self-government bodies are able to influence the behavior of economic entities and thus create conditions for them in which they are able and interested in using digital technologies in their own activities. Fiscal instruments are a set of tax and budget instruments that are closely interconnected and are used in the process of accumulating state financial resources to perform the functions assigned to it by society. Thus, ensuring the development of the digital economy is also possible using these tools. Conclusions. The article examines the essence of budgetary and tax instruments in sufficient detail, analyzes the peculiarities of their use in the field of implementation of information and communication technologies for the development of the national economy.

Local Policy Choice: Theory and Empirics

This paper critically surveys the growing literature on the policy choices of local governments. First, we identify various reasons for local government policy interactions, including fiscal competition, bidding for firms, yardstick competition, expenditure spillovers, and Tiebout sorting. We discuss theoretically what parameters should be estimated to determine the reason for competition among local governments. We emphasize how the policy outcomes emerging from this competition are affected by the presence of constraints imposed by higher-level governments. Second, we integrate theoretical and empirical analyses on the effects of fiscal decentralization on mobility, spillovers, fiscal externalities, economic outcomes, and distributional issues. Third, we identify key issues that arise in the empirical estimation of strategic interactions among local governments and highlight recent quasi-experimental evidence that has attempted to identify the mechanism at work. Finally, a synthesis model, containing multiple mechanisms and fiscal instruments, resolves some puzzles and provides guidance for future research. (JEL D72,H20, H71, H72, H73, H77, R51)

Uninformed voters with (im)precise expectations: Explaining political budget cycle puzzles

AbstractGovernments try to improve re‐election chances by using fiscal instruments; they can shift voters' expectations of government competence because some voters are impaired by uninformedness. We argue that uninformed voters may also be impaired in another way which has not been considered in the literature, namely that uninformed voters are uncertain about the precision of that expected competence. Analytically, we show that political budget cycles (PBCs) are only produced when we have many uninformed voters and their expected competence of the government is fairly uncertain; or with few uninformed voters and certain expectations. This could explain two empirical puzzles on why we sometimes find and sometimes not (i) PBCs in developed and democratic countries with strong institutions, and (ii) that press freedom exacerbates PBCs. In a panel of 70 countries (1986–2015) we find empirical support for these findings. Results are robust to alternative specifications and explanations like fiscal rules, corruption and expected downturns.

ASSESSMENT OF THE EFFECTIVENESS OF FISCAL AND MONETARY LEVERS OF ECONOMIC DEVELOPMENT IN UKRAINE

This article is devoted to topical issues of studying the operation of fiscal and monetary levers of economic development of the country, the peculiarities of their implementation in modern transformational conditions in relation to macroeconomic indicators. Monetary policy in combination with fiscal regulation instruments forms the basis of the country's stabilization policy. Monetary impulses, passing through a number of transmission channels, contribute to the achievement of the main general economic goals: sustainable economic growth, a moderate level of inflation and balance of payments. The study of existing and the search for new effective tools and forms of implementation of fiscal and monetary policy, changing the basic conditions of the functioning of the national economy of Ukraine becomes a challenge for improving the effectiveness of fiscal and monetary regulation. The main indicators for assessing the effectiveness of fiscal and monetary instruments of Ukraine are determined. The importance of monetary and fiscal instruments for macroeconomic stability is analysed, in particular by indicators: GDP, budget expenditures, tax revenues, discount rate and money supply. An economic and mathematical model for analysing the effectiveness of fiscal and monetary levers on the economic development of Ukraine is constructed. Ways to improve the effectiveness of fiscal and monetary levers of economic development in Ukraine are proposed based on the obtained main modelling results.