Government Tax Policy Research Articles

Era Baru: Persepsi Mendasar Wajib Pajak terhadap Tingkat Kepatuhan Pajak

The aim of this study to investigate empirical evidence about the fundamental perceptions of taxpayers related to tax administration and tax policy on tax compliance. This research is a quantitative study using a questionnaire in 5 Likert scales. The sample of observations in this study amounted to 110 respondents with different backgrounds. The results of this study indicate that there is a proven positive effect between the fundamental perceptions of taxpayers from administrative factors and tax policies on tax compliance. The higher the taxpayer's perception of the tax administration and government tax policy, the higher the taxpayer's motivation to comply with it.

Investigating the impact of government tax policies on the performance of small and medium enterprises of West Azarbaijan with considering the mediating role of entrepreneurial orienteering

The main objective of this research is to investigate the Impact of Government Tax Policies on the Performance of Small and Medium Enterprises of West Azarbaijan, Considering the Mediating Role of Entrepreneurial Orienteering. The research mrthod is descriptive-survey and in terms of purpose it is an applied research. The statistical population of the study is managers of small and medium enterprises of West Azarbaijan province those number is 1126 people. The sample size was 286 using Cochran formula, which was selected by stratified random sampling. In order to collect information, a questionnaire was used. In order to measure government tax policies, the standard questionnaire of Levin et al. (2002) was used to measure the performance of small and medium enterprises from Drinney et al. (2015) and to measure entrepreneurship trends the Wood et al. (2010) questionnaire was used.The validity of the questionnaires was confirmed by the supervisor and one of the management professors. Reliability of the questionnaires by Cronbach's alpha test was 0.85 for the government's tax policy questionnaire was 0.89 for the organizational performance questionnaire and 0.87 for the entrepreneurial orientation questionnaire. In order to analyze the data, the structural equation method was used with the help of LISREL software. The results showed that government tax policies affect the performance of small and medium enterprises in West Azarbaijan Province with regard to the mediating role of entrepreneurial orientation.

Is it possible to incentivise and capture local wealth? The business rate challenge

How can Government and the Treasury reconcile two often contradictory aspects of the commercial property tax model in England? On the one hand, commercial property tax is required to be responsive to economic conditions, promoting investment in property and business. On the other hand, local commercial property tax, in part, is required to fund local public services. This situation reveals a contradiction in government tax policy that has a direct impact upon local, regional and national economic activity. This Viewpoint article considers the nature of commercial property tax in England, the business rate system, the competing pressures upon the business rate system before considering the main alternative on offer in England, land value tax. Despite the undoubted economic elegance of this instrument, any move towards land value tax should be approached with caution. Any solution to the current business rates impasse should not be led by a pragmatic focus on tax collection. Nor should prevalent issues, the high street, the need for digital tax or public finance demands be considered in isolation – they should be tackled together because they are part of the same complex situation.

Entrepreneurial Finance and Economic Growth: A Canadian Overview

Equity capital plays an important and growing role in connecting financial resources to investment opportunities in a highly productive manner. Exchange-listed companies, IPOs, venture capital and private equity are all complementary investment avenues. Each plays a vital role that allows companies more efficient access to capital for improving productivity, boosting long-term growth and innovation, and creating better jobs. On this dimension, Canada enjoys an enviable position. Despite these positive factors, Canada’s ranking compared to that of other major economies on key dimensions of competitiveness and drivers of sustainable economic growth has been declining. In 2009-10, Canada ranked ninth on the Global Competitiveness Index; in 2018, it had fallen to twelfth place. More worrisome for the future is that Canada’s lacklustre performance in areas known to be significant contributors to productivity, competitiveness and sustainable growth is pervasive across industries and regions. Although the Canadian financial industry cannot be held responsible for all the shortcomings in Canada’s performance, there is no escaping that a disconnect seems to exist between the generally favourable assessment of the effectiveness and strength of the Canadian financial industry and the overall competitiveness of the Canadian economy in the short and long run. One potential explanation has to do with the median size of exits in Canada, which is almost an order of magnitude smaller than in the United States. Moreover, institutional equity investors often engage in sales to foreign firms rather than IPOs. One powerful disincentive to exit through public markets is federal government tax policies that discriminate against and penalize Canadian innovative and high-growth companies that “go public.” In addition to correcting these counterproductive biases, serious consideration should be given to adopting a tax measure similar to the US Small Business Jobs Act of 2010, which provides for full exemption from federal taxation of capital gains realized on the sale of the shares of certain small businesses. There is empirical evidence that the exemption has had a significantly positive effect in the US. Serious consideration should also be given to reducing the capital gains tax on shares issued by qualified SMEs when they list on a Canadian stock exchange and are held by individual investors for a reasonable period of time, since evidence suggests that capital gains taxes influence the underpricing of IPOs. The adoption of such a tax measure applicable to exits by an IPO or upon listing the shares on a Canadian stock exchange would help establish a more neutral playground for the choice of exits, which, to a large extent, is the crux of the matter.

Переваги та недоліки фіскальних правил як інструментів антициклічного регулювання економіки

Today, the question of introducing state-of-the-art economic management technologies in Ukraine is very urgent, especially in the area of fiscal policy. Among all instruments of such policy, it is necessary to distinguish fiscal rules, which have positively proved themselves in foreign countries in the process of managing economic fluctuations, in overcoming economic crises and achieving sustainable economic growth. So, the study of the essence of such rules as the main tool for anti-cyclical regulation of the national economy, the peculiarities of their impact on the socio-economic situation of the country and the possibility of their introduction in Ukraine are urgent questions. The purpose of the article is to study the impact of fiscal rules on the economic situation in the country, as well as the definition of place of such tools in the system of counter-cyclical regulation of the economy and the feasibility of their implementation in fiscal practice of Ukraine. It was established that the introduction of fiscal rules is associated with economic fluctuations, economic crises that shocked the economies of the world during the twentieth century - beginning of the XXI century. It was found that the introduction of fiscal rules is preceded by strategic planning and forecasting of the economic development of the country, which should be based and include a set of indicative indicators necessary to achieve future goals, and not a spontaneous solution, which can lead to further aggravation economic and social situation. The fiscal rule is a multifaceted instrument that aims to achieve overall macroeconomic stabilization and economic equilibrium. The authors believe that fiscal rules are the psychological tool for the government to enforce fiscal policy discipline. In the socio-economic conditions of Ukraine, it will be advisable to introduce fiscal restrictions that will serve to shape discipline, transparency in the budget process, debt policy, government spending policy and tax policy. Transparent, predetermined parameters will lead to the formation of a positive investment climate, increase the level of confidence in the government, reduce the shadow economy, and increase the social standards of living.

Need for a Risk-Focused Approach in Tax Control

The article analyzes the effectiveness of the tax audits over a number of years conducted by the FTS throughout the Russian Federation, as well as the regional audits conducted by the Irkutsk region Department of Russian Federal Tax Agency. Cameral tax audits are noted to be less efficient in comparison with field tax audits. The need for the increased capacity of cameral tax audits based on the risk-focused approach is proved. This approach in tax administration will allow to implement the tasks of the Government's tax policy, namely to increase efficiency of tax audits and to reduce the number of field tax audits. Practice in the application of the risk-focused approach takes place during the pre-inspection analysis when selecting the objects for field tax audits. The criteria for tax risks assessment are considered. Based on the study of the tax audit activities, the following is suggested: the ways to enhance cameral audits through the use of indirect methods of defining tax bases, analysis of financial and economic activities of taxpayers, the use of differentiation of taxpayers and identification of priority groups.

The Euro

The Euro

Government Tax Policy and Performance of Listed Manufacturing Firms in Nigeria: Evidence from Dynamic Panel Data Model

Abstract This study examined the influence of government corporate tax policy on the performance of 54 randomly selected listed companies that cut across 17 categories of non-financial in Nigeria over a period of 1990-2002. Using Generalised Method of Moment (GMM) and contrary to the expectation, the study found positive1 relationship between corporate tax policy and the output performance of quoted manufacturing firms in Nigeria. This may be an indication that government revenue from corporate tax was judiciously expended on productive government expenditure most especially in Lagos State as virtually all the selected manufacturing firms have their main base in Lagos State. The study therefore recommended that Federal Government should either minimize or totally remove tax incentives, tax waivers and tax holidays to some manufacturing firms in Nigeria.

The Benefits and Costs of Donor-Advised Funds

Donor-Advised Funds (DAFs) are now a major source of charitable donations in the United States, responsible for 1 in 10 dollars donated to charity in 2015. In 2016, Fidelity Charitable, whose only mission is to provide DAFs, became the largest charity in the United States. Paradoxically, most people have never heard of DAFs or Fidelity Charitable. This leads us to ask, who uses DAFs and why, what is the impact of government tax policy toward DAFs, and could the extra fiscal cost of subsidizing DAFs be balanced out by an extra public gain of new charity resulting from tax policy toward DAFs?

The impact of government subsidy and tax policy on the competitive decision-making of remanufacturing supply chains

In this paper, we consider a two-period competition model of a remanufacturing supply chain consisting of three members: a new product manufacturer, a recycler and a remanufacturer. The manufacturer supplies new products in the first period and the remanufacturer participates in the competition in the second period. We consider three scenarios in the second period: (1) there is no government subsidy in the competition; (2) there is only government subsidy in the competition; (3) there are both government subsidy and tax in the competition. First, we give the optimal decision-making of the manufacturer, the remanufacturer and the government in the three scenarios; second, we analyse changes in the decision-making of the manufacturer and remanufacturer in the three scenarios and compare their results. We analyse the effects of government subsidy and tax and their asymmetric use on manufacturers’ and remanufacturers’ decision-making variables and competitive performance. We also take consumer awareness of environmental protection into account and examine its impact on subjects’ decisions. Lastly, we operate a numerical example to show the results.

TAX POLICY IN OECD COUNTIES

Introduction. Globalization intensifies the necessity for intergovernmental cooperation aiming to implement the measures on the tax and customs regulation. Considering both the economic cyclicality and historical retrospective, it is expedient to study the advanced and emerging market economies’ experience in the field of developing and implementing a set of fiscal policy measures during the economic expansion, recession, stagnation, and post-crisis recovery periods. The purposeis to systemize the experience of the government tax policy preparation and implementation in the OECD countries in the long-term retrospective, and to assess the tax structure and the level of taxation impact on economic growth. Results. Based on methods of economic regression to evaluate the fiscal policy in the OECD countries over 1981–2016 period, it was determined that increase in the tax burden did not provoke any significant destructive effect on the economy. At the same time, in the context of the tax structure, the taxes on capital had a negative impact on the real GDP growth rates, the taxes on labor had a lower degree of influence, and the effect of the taxes on consumption was almost neutral. The main measures of the tax regulation aimed to create the most favorable conditions for a long-term economic growth were investigated. The tax revenues structure’s complex analysis was carried out; the main tendencies of taxation were generalized. Conclusion. Tax policy is as an adaptive mechanism allowing to regulate the country’s economic development. The OECD countries consistently implement the systematic measures to reduce the income tax rate. This practice is caused by the need to create the most favorable conditions for the entrepreneurship development. Regarding the universal consumption taxes, a gradual rise in their rates was recorded. That fact is reflected by an increase in these taxes’ fiscal importance (taking into account the neutrality of their impact on the economic agents’ business activity). The transformation in the import operations’ model of taxation as well as the implementation and active intensification of free trade policies led to a reduction in the specific weight of customs duties. In modern conditions, the tax legislation’s unification as well as the strengthening of the supranational tax regulation’s role outline an important trend in the development of taxation systems both in advanced and emerging market economies.

Personal income taxation and income inequality in Asia-Pacific: a cross-country analysis

The article examines analyze current features of personal income taxation, and also the relationship between income inequality, individual income taxes and several labor market indicators in Asia-Pacific countries. The income inequality issue affects basic social and economic terms as equity and equality. The increase in income inequality in countries worldwide led to vigorous debate about efficiency of progressive individual income taxation as a tool for achieving optimal level of social equity. The purpose of the study is to examine the features of progressive individual income taxation and its influence of reduction of income inequality in Asia-Pacific countries. The article analyzes current systems of personal income taxation in countries of this region and their relationship with key macroeconomic indicators. The methodology includes cross-country comparisons, principal component analysis, regression analysis. The main theoretical results include identification of causes of inefficiency of progressive individual income taxation in analyzed countries. The empirical results are related to the estimation of influence of macroeconomic factors, including labor market indicators, on individual income tax revenue. The applied methods, notably principal component analysis combined with regression analysis, can be used for estimation of influence of both quantitative and qualitative factors on tax revenue. HIGHLIGHTS 1. The tax theory suggests that the progressive individual income tax system can be an effective tool for reduction of income inequality 2. For developing Asia-Pacific countries, the progressive personal income tax systems cannot contribute to the reduction of inequality since the tax base is narrow because of high free-tax thresholds and large informal sector of the economy 3. The developed Asia-Pacific countries have relatively high personal income tax revenues and low Gini coefficients, except Singapore with high income inequality level and GDP per capita similar to developed countries. One of the main reasons of high inequality in this country are the features of government tax policy 4. In developing Asia-Pacific countries only statutory nominal gross monthly minimum wage has significant impact on individual income tax revenue, and this impact depends crucially on the GDP per capita; the main reason are high tax-free personal income thresholds in these countries FOR CITATION Belozyorov S. A., Sokolovska O. V. Personal income taxation and income inequality in Asia-Pacific: a cross-country analysis. Journal of Tax Reform , 2018, vol. 4, no. 3, pp. 236–249. DOI: 10.15826/jtr.2018.4.3.054 ARTICLE INFO Received July 17, 2018; accepted August 20, 2018

Determining the optimal carbon tax rate based on data envelopment analysis

Carbon tax policy is widely used to control greenhouse gases and how to determine a suitable carbon tax rate is very important for policy makers considering the trade-off between environmental protection and economic development. In an industry regulated by carbon tax policy, we consider two competing firms who sell ordinary products and green products respectively. In order to promote the firm who sells ordinary product to reduce carbon emissions, the government of China imposes carbon tax on the ordinary products. For the government, three objectives are considered when it makes carbon tax policy. They are increasing the government revenue, reducing the government expenditure and decreasing the carbon emissions. For the firms, it is important to explore their pricing strategies taken into account of the government tax policy. To find an optimal carbon tax rate and to achieve the three objectives simultaneously, we consider this as a multiple criteria decision-making problem. Hence, we propose to use a centralized data envelopment analysis (DEA) approach to solve it. We find that when one firm produces ordinary products and the other produces green products, the government may set a high tax rate. While when both firms sell ordinary products, the optimal tax policy for each firm is different and the government may impose a higher tax rate for one firm and a lower tax rate for the other firm.

Undermining government tax policies: Common legal strategies employed by the tobacco industry in response to tobacco tax increases

Effective tobacco tax increases reduce tobacco consumption, threatening the profitability of the tobacco industry. In response, the tobacco industry employs strategies to negate or minimize the full effects of tobacco tax increases. By interacting with various government agencies and non-governmental organizations we identified seven such strategies: stockpiling, changing product attributes or production processes, lowering prices, over-shifting prices, under-shifting prices, timing of price increases, and engaging in price discrimination and/or offering promotions. Each strategy is described in terms of the motivation for their employment, the consequences for tobacco use and tax revenue, and measures to counter them. Country case studies illustrate the successful execution of the strategies and possible government responses.Many of the tobacco industry's responses to tobacco tax increases are predictable, since they are being employed systematically across countries. Governments can and should adopt appropriate measures to eliminate or reduce tobacco industry manipulation. This requires systematic data collection in order to monitor tobacco industry behavior.

Fiscal Sustainability and Debt in Small Open Economies: An Application to the Caribbean

The adverse impact of sovereign debt defaults on the international financial system has occasioned intense interest in methodologies for assessing sovereign debt risk. This is manifest in an outpouring of studies, research which has uncovered the fact that the riskiness of sovereign debt is determined in each case by a complex interaction of factors, including government tax, expenditure and financial policies over time, and the state of domestic and international financial markets. There is therefore a need to distinguish between fiscal strategies that are not sustainable - those that will fail or dissolve into crisis if continued - and those which should be altered in the interest of economic and social development. This study provides an objective measure for small open economies, of the risk that fiscal policy may render it impossible for government to fully service its debt obligations. This study is remarkable because it is a model for the future of Caribbean integration; contributors are from across the region, from Suriname in the east to Belize in the west, and from The Bahamas in the north to Trinidad and Tobago in the south.

Energy use – in terms of efficiency

In the recent decades it has become apparent that the human race can lead to a polluting and energy- wasting lifestyle and the depletion of natural resources and an ecological disaster as well.
 Energy efficiency is the realization of the chance to see a wider use of renewable energy. Renewable energy sources can be found in large quantities in Europe. A proper exploitation of these would be important because of the "traditional" energy sources’s sate is very critical in many ways.
 The utilization of renewable energy sources depends on many factors. The local natural conditions significantly determine each country's different renewable energy potentials. I find to be important the natural conditions, such as, solar radiation intensity , the number of sunny days per year, the wind conditions , the volume and their energy characteristics of the geothermal power resources , land features , soil and rock quality, the supply of fossil fuels or the nuclear possibilities of energy production. The economic environment is also a major influencing factor for the utilization of renewables. The conditions of price of fossil fuels (natural gas, oil and coal), the price of nuclear fuel production and other energy costs significantly influence the demand for renewables, as well as the level of subsidy and government tax policy. In addition, the international and national programs, objectives, strategies, subsidies and regulatory measures as well as technological factors can have a significant impact.
 In my paper I point out the opportunities of renewable energy should be given to live. Nowadays the positive effects of their use is undisputed. In addition to the environmentally friendly produced energy, we should strive for energy conservation and energy efficiency as well. These expectations appear in practice, which can be directly perceived by citizens, in fact we should live accordingly. Furthermore, the environmentally relevant regulations of living conditions should appear as environmental demands.

Effect of Tax Policy on Economic Growth in Nigria (1994-2013)

This study examined the effect of tax policy on Economic Growth in Nigeria. The study uses annual time serial data of 20 years (1994-2013) collected from the published report of the FIRS of various years, OLS regression analysis was use to investigate the relationship that exist between the dependent and independent variables. The findings revealed that tax have a significant effect on the Economic growth in Nigeria. It showed that the proportion of indirect to total tax have increased over the years. The study therefore recommends among others that the Government tax policy should shift more to indirect tax due to the expansionary and non-distortionary nature.

Credit Policy as Fiscal Policy

The $1.6 trillion that U.S. households borrowed in 2010 through government-backed direct loan and loan guarantee programs—most notably from Fannie Mae and Freddie Mac, the student loan programs, and the Federal Housing Administration, but also more than 100 smaller programs—provided credit subsidies and relaxed credit-rationing constraints that caused both borrowing and spending that year to be higher than they would otherwise have been. A simple theoretical model illustrates these channels. Estimates of the increases in borrowing, scaled by multipliers similar to those applied to traditional government spending and tax policies, suggest that the programs provided a fiscal stimulus of roughly $344 billion, similar to what was provided by the American Recovery and Reinvestment Act of 2009. Although there is considerable uncertainty about this point estimate, its size suggests the importance of taking the stimulus and automatic stabilizer effects of federal credit programs into account, particularly during economic downturns that are accompanied by severe financial market distress. However, though credit programs are shown to be a relatively low-cost source of fiscal stimulus, to assess their overall welfare implications, these benefits must be weighed against the significant costs of the programs during more normal times, including the likelihood that lax federal credit policies were an exacerbating cause of the 2007 financial crisis.

Study on Impacting Mechanism of Institutional Quality for Economic Growth of China During Economic Transition Period

This paper is an extension of the multi-sectors endogenous growth model including capital based on the model of Aghion and Howitt (1999). It sets the institution, endogenous human capital and technological innovation into a unified analysis framework, and tests the effects of the institution, capital accumulation and technological innovation on long-run economic growth. The results show that long-run economic growth not only depends on the institutional quality and the technical innovation, but also depends on the capital accumulation and household’s preferences. The long-run stable equilibrium of positive growth rate only occur when the institutional quality reaches a certain level, and the improvement of the institutional quality will improve the long-run economic growth rate when the equilibrium existing. In addition, government tax and subsidy policy can also affect the long-run economic growth. This paper aims to provide theoretical support and policy suggestions for the revival of China’s reform.

The Dutch East India Company's Tax Farming in 18th Century Malacca

This study concerns eighteenth century Dutch East India Company (VOC) tax farming practices in the Southeast Asian port town of Malacca. Empirical data from VOC archives are used to determine the value of VOC’s tax farming. Adopting a qualitative methodology, and drawing on perspectives from Adam Smith’s tax maxims, the study focuses on determining the impact of the VOC’s tax farming practices on Malacca’s taxpayers, whether they were inter-continental or local intra-island traders, townspeople, or Malay farmers. The study facilitates a further understanding of the global phenomenon of tax farming practice and its demise. Findings suggest that the impact of the VOC’s Malacca tax farming varied across groups of taxpayers, but more negatively affected minority and local Malay groups, demonstrating why Adam Smith’s governance maxims still guide government tax policy in many countries today. The study complements the paper published from the 2012 Tax History Conference in Cambridge, which covered the nineteenth century handover of Malacca by the Dutch to the British.