Higher Tax Rates Research Articles

PENGARUH SISTEM PERPAJAKAN, PENGETAHUAN PERPAJAKAN, TARIF PAJAK DAN SANKSI PERPAJAKAN TERHADAP PERILAKU PENGGELAPAN PAJAK PADA WAJIB PAJAK DI KANTOR PELAYANAN PAJAK (KPP) PRATAMA SERPONG

This study aims to analyze the behavior of tax evasion by taxpayers in the Serpong Tax Office. In the test, it involves the variables of the taxation system, knowledge of taxation, tariffs and tax sanctions. This research is a survey research, with a quantitative approach. In the process of statistical analysis, multiple linear regression techniques are used. The sampling technique was carried out incidentally to the total population of 119.925. The results of the study reveal that the tax system has loopholes that can be exploited as an effort to commit tax evasion. Likewise with tax knowledge, the better the knowledge of a taxpayer, then he will know measurable actions that can deceive the tax system. High tax rates encourage people to do tax avoidance. However, tax sanctions did not have a positive effect on reducing tax evasion. This finding confirms that the tax system, knowledge, and tax rates can trigger the occurrence of tax evasion. So it is necessary to strengthen the tax system.

Diversification of Fiscal and Economic Consequences of Municipal Tax Policy on the Example of Real Estate Tax

The aim of the article was to assess the fiscal and economic differentiation of the municipal tax policy on the example of real estate tax in Polish cities with poviat status. This is an important theoretical and practical issue. On the one hand, the application of high tax rates may contribute to an increase in the budgetary revenues of cities, and on the other hand, may discourage potential investors from operating in the city and deteriorate its economic and social condition. The research allowed to state that the use of municipal tax policy is an instrument that strongly regulates fiscal and economic processes taking place in local government. It was found that the largest real estate tax revenues were in cities with a fiscal tax policy (where the highest tax rates were applied), while cities with relatively low real estate tax rates achieved in 2018-2020 an average revenue three times lower than cities applying fiscal tax policy. Moreover, the research proved that the most developed local governments in terms of socio-economic use applied fiscal tax policy. The least developed socially and economically was the group of cities with a liberal tax policy, and therefore applying relatively low tax rates.

Institutional and Political Determinants of Statutory Tax Rates: Empirical Evidence from Sub-Saharan Africa

ABSTRACT This paper investigates the extent to which institutional and political factors explain statutory tax rates in sub-Saharan Africa (SSA). In particular, it examines the effect of regulatory quality, political accountability, political fragmentation, the electoral cycle, and ideological orientation on corporate income tax (CIT) rates as well as top marginal personal income tax (PIT) rates during 1990–2017. Different from advanced economies, our results suggest that in SSA institutional (structural) factors are more important than political (conjunctural) ones. Better institutions (proxied by higher regulatory quality) are associated with lower tax rates, whereas weak political accountability (proxied by longer government tenures) and greater fragmentation (linked to polarization) lead to higher tax rates. The electoral cycle is weakly associated with higher CIT, and contrary to findings in advanced economies, the ideological orientation of the government does not appear to influence statutory tax rates in SSA.

Empirical Evidence on the Economic Impacts of Hotel Taxes

Tourist taxes are an important source of revenue for many governments. In the United States, all states impose them in the form of hotel/motel occupancy taxes, yet there is little ex post evidence as to whether such taxes affect occupancy rates. This study uses a precise establishment-level data source to examine California's varying rates by city, enabling powerful tests. The author finds that such taxes have negligible impacts on hotel sales and employment. On the other hand, hotels/motels operating in higher tax-rate cities tended to have more financial stress in terms of lower Dun and Bradstreet credit ratings.

Pengaruh Perubahan Tarif Pajak Penghasilan, Struktur Modal Dan Kebijakan Dividen Terhadap Harga Saham

The purpose of this study is to analyze the effect of changes in income tax rates according to PP no. 30 of 2020, capital structure and dividend policy on stock prices in manufacturing companies in the Food and Beverage sector listed on the Indonesia Stock Exchange in 2016 –2020. This type of research uses descriptive quantitative. The population in this study were 30 companies. The sampling technique in this study was purposive sampling, so that a sample of 15 data from 3 companies was obtained for 5 years. Methods of data analysis using multiple linear regression analysis with the help of SPSS application. The results of the partial analysis show that the tax rate and dividend policy have no effect on stock prices. While the capital structure has a positive influence on stock prices. However, simultaneously stock prices are affected by changes in income tax rates, capital structure, and dividend policy. Based on the results of the study, it can be concluded that the high and low tax rates are not able to affect stock prices. the higher the capital structure will be followed by an increase in stock prices. While the dividend policy can not affect changes in stock prices.

Optimal Design and Techno-Economic Analysis for Corncob Particles Briquettes: A Literature Review of the Utilization of Agricultural Waste and Analysis Calculation

Corncob is usually disposed of directly as waste, creating problems in the environment, while it can be converted into valuable materials. This research aimed to evaluate the literature review on briquette production from agricultural waste (using non-binder and cold press with a binder) and the current works on techno-economic analysis, to propose an optimal design for the production of briquette from corncob waste, and to perform a techno-economic analysis based on the selected optimal processing method. The engineering perspective based on stoichiometry and mass balance showed the potential corncob briquette manufacture in both home and large scales due to the possible use of inexpensive and commercially available equipment and raw materials. The economic perspective [based on several economic evaluation factors (i.e., gross profit margin, payback period, break-even point, cumulative net present value, return of investment, internal rate return, and profitability index) under ideal and non-ideal conditions by considering internal (i.e., sales, raw materials, utilities, and variable cost) and external aspects (i.e., tax)] confirmed the prospective development of the project in the large-scale production with a lifetime of more than 18 years. The main issue in the project is the raw material (i.e. tapioca flour), giving the most impact on the project’s feasibility. Even in severe conditions, the project is feasible. The great endurance was also confirmed in the case of a higher tax rate. This study demonstrates the importance of producing corncob-based briquettes for improving the economic value and giving alternatives for problem solvers in the utilization of agricultural waste.

Farm-Level Effects of Emissions Tax and Adjustable Drainage on Peatlands

Drained agricultural peatlands emit significantly higher amounts of greenhouse gas (GHG) emissions per hectare than mineral soils. GHG abatement costs for representative cereals (CF) and dairy (DF) farms in southwestern Finland were estimated by integrating an emission-based tax together with an option to invest in a subsidized adjustable drainage system on peat soils in a farm-level dynamic optimization model. With an average 10% share of peat soils from overall farm area, emissions tax rates over 15 (CF) and 19 (DF) €/tCO2e triggered adjustable drainage investments with a significant reduction in GHG emissions per ha, when assuming no crop-yield effect from the adjustable drainage. Abatement costs for emissions tax rates €12–50/tCO2e/ha were €16–44/tCO2e (CF) and €26–51/tCO2e (DF) for whole farm-soil emissions, depending on the share of peatlands on the farm, on the yield effects of adjustable drainage, and on crop prices. High emissions tax rates imply higher abatement costs since farms have a limited capability to adjust their production and land use. Thus, emissions reductions from peatlands can be achieved at reasonable costs when investing in adjustable drainage on peatlands. The income losses due to emissions tax, however, are high, but they can be compensated for farmers by lumpsum payments independent of their production decisions. Since existing agricultural policies such as the EU CAP system may have limited effectiveness on GHG emissions, the emissions tax and adjustable drainage on peatlands could promote GHG abatement significantly on farms and areas with abundant peatlands.

Is taxation being effectively used to promote public transport in Europe?

Public transport is a pivotal utility in increasing the long-term sustainability of cities. Consequently, there has been a growing interest in promoting a sustainable modal shift that reduces dependence on private vehicle use. This strategy has involved several specific actions, among them employing price differentiation between the two substitutes considered in this research – public transport and private cars. Governments can influence fares in different ways. However, fiscal policy governing applicable taxes is one that is often neglected in the literature. This paper investigates the relationship between the market share of public transport and taxation – in particular, value added tax (VAT), which is levied on three main products: public transport fares, fuel, and vehicle ownership. The results show that taxes matter, but not all taxes are determinant. A lower VAT rate on public transport fares and a higher tax rate on vehicle ownership can lead to an increase in public transport's market share. Taxing car utilization through VAT on fuel does appear to be significant.

Income Tax Regime- Old Vs New

The Government of India has announced new tax slab in Union Budget 2020-21. This new tax slab is also called as Optional tax regime because Government has not abolished old tax regime. The tax payer has option to choose the tax regime i.e. either Old or New which is better for them. The new tax regime has lower tax slab as compared to old tax structure. The taxpayer has given an option to either choose new tax structure with lower tax slab or the old tax one with tax benefit but higher tax slabs. The old tax regime enable taxpayer to avail existing tax exemption such as Leave Travelling Allowance, House Rent Allowance & deductions available under Income Tax Act, 1961. While those who are opting new tax regime will not have to avail advantages of existing exemptions & deductions that are available under old tax regime. The old tax regime has higher tax rate and three tax slab, whereas new tax regime has lower tax rate & six tax slabs. There is similarity in tax rate in case of individual below 60 years of age in both tax regime as it is exempted up to 2.5 lakh. In addition to this as per Section 87A (Introduced in Finance Act, 2003) Individual who is resident of India for Income Tax purpose, is entitled to claim tax rebate up to Rs.12,500 against tax liability if his/her Income does not exceed Rs.5,00,000 for old as well as new tax regime. Keywords: Income Tax, Tax Slab, Exemptions, Deductions, Old Vs New Tax Regime.

Demand for money laundering in developing countries and its deterrence: a quantitative analysis

PurposeMoney laundering is an activity where illegal proceeds are hidden. This often leads to a reduction in government revenue and loss of government control of public funds. This study aims to identify the important sources of growing demand for money laundering in developing countries. Further, it identifies the factors that reduce the impact of sources of demand for money laundering.Design/methodology/approachThis study used the panel approach of feasible generalized least square to investigate the growing demand for money laundering in 62 developing countries and provides a moderation-based solution for managing the demand factors.FindingsThe empirical results of this study indicate that there are two sources that increase the demand for money laundering in developing countries. This includes a high tax rate on profit linked with private firms and businesses and diversion of public funds related to government officials and politicians. The results indicate that profit tax and diversion of funds increase the demand for money laundering. The profit tax-based money laundering can be moderated by the quality of the education system and the diversion of public funds and money laundering can be moderated using bureaucracy quality.Originality/valueThis is one of the first studies to empirically estimate the impact of two important sources (i.e. diversion of public funds by government officials and politicians and a high tax rate) that create demand for money laundering in developing countries. The findings help developing countries’ governments formulate policies and curb the growing demand for money laundering.

THE INFLUENCE OF TAXES, COMPANY SIZE, AND FOREIGN OWNERSHIP ON THE DECISION OF COMPANIES TO CONSIDER TRANSFER PRICING ON MANUFACTURING COMPANIES LISTED IN THE IDX

Transfer pricing has long been a classic issue in the taxation field. From the government side, transfer pricing is supposed to reduce and eliminate the potential for state tax revenue, because multinational companies shift the tax obligations of countries that have high tax rates (high tax countries) to countries with low tax rates (low tax countries). The purpose of this study is to fund out partially the effect of tax, company size, and foreign ownership on company decisions do transfer pricing. And to determine the effect of taxes, size foreign ownership in the company and simultaneously against the decision of the company do transfer pricing on manufacturing companies listed in Indonesia Stock Exchange period 2015-2019. The method used in this study is an associative method with a quantitative approach. The research population totals 183 companies with a sample of 11 companies, the financial report data attached 55 data using purposive sampling technique, the research was conducted at manufacturing companies in the Indonesia Stock Exchange period 2015-2019. The conclusion of the research is based on the above calculation partially, the results obtained by the tax and foreign ownership variable affect the company's decision to transfer pricing, while the variable company size does not affect the company's decision to transfer pricing. Simultaneously, the tax variables, company size, and foreign ownership affects the company's decision to transfer pricing to manufacturing companies in the Indonesia Stock Exchange period 2015-2019.

Comparing the Scandinavian automobile taxation systems and their CO2 mitigation effects

Despite their similarities, Scandinavian countries have adopted starkly different automobile tax regimes. The Danish system entails very high and convex tax rates with moderate CO2 differentiation. In Norway, tax rates are high and convex with strong CO2 differentiation and total exemptions for zero emission vehicles, even from value added tax. Sweden practices feebates – CO2 dependent subsidization along with moderate taxation. Relying on a disaggregate discrete choice model of automobile purchase, we simulate the demand for passenger cars as of 2016 in Norway under a set of conditions resembling, respectively, the Danish, Norwegian or Swedish fiscal incentives before and after recent reforms. In all cases, implications are derived in terms of energy technology market shares, average type approval CO2 emission rates, and aggregate fiscal revenue. The automobile taxation system is seen to have remarkable impacts on all three accounts. In essence, among the three jurisdictions examined, the Norwegian fiscal regime has by far the strongest CO2 abatement effect. The Danish system is less effective in terms of CO2 abatement, but provides twice as much government revenue. The Swedish feebate strategy is by far the least effective in terms of both CO2 mitigation and revenue collection. Highlights Automobile taxation is a powerful greenhouse gas abatement instrument. Tax exemptions for battery electric cars accelerate their market uptake. The disparate experiences of the three Scandinavian countries are quite instructive.

Higher taxes at the top? The role of tax avoidance

How does the presence of endogenous tax compliance alter optimal taxation in the United States? Using a full-scale macroeconomic model augmented with endogenous tax avoidance, I show that extremely high marginal tax rates for top earners cannot be sustained in equilibrium. Revenue- and welfare-maximising tax rates range between 36.4% and 38.4% in the long run, which are very close to the status quo. These results are robust to the calibration of the labour supply’s Frisch elasticity, and the labour response explains, at most, 60% of the variation of taxable income in the short run. Moreover, tax hikes on top earners are not effective redistribution mechanisms in the presence of tax avoidance.

A Fiscal Theory of Money and Banking

We introduce banks to the fiscal theory of price level to study the effectiveness of open market operations in correcting the distortions caused by an improper tax rate. A rise in the tax rate increases the real purchasing power of payment liquidity for short-term consumption, but reduces firms' incentive to take loans for long-term investment. An excessively low tax rate leads to an over-investment problem, which can be rectified by a combination of reverse repo operations and a positive reserve requirement. The optimal reverse repo rate is a function of the “fiscal gap”, that is, the difference between the optimal tax rate and the actual tax rate. By contrast, an excessively high tax rate leads to an under-investment problem. Open market operations are ineffective in this case as the zero lower bound of interest rates prevents the central bank from injecting additional credit to the economy.

Greenhouse gas emissions vs CO2 emissions: Comparative analysis of a global carbon tax

Both CO2 and non-CO2 emissions are liable in climate change policies in many countries around the world. However, there are still many impact assessment studies in different regions that consider only CO2 emissions. We hypothesise that excluding non-CO2 greenhouse gas emissions, which are also liable in climate change policies, may lead to misleading results and impacts. We employ a global climate change policy model (GTAP-E-PowerS) to examine how the impact of a uniform carbon tax at US$15 applying to the world regions are different when only CO2 emissions are liable compared to the case that non-CO2 emissions are additionally subject to the tax. That is, the impacts of the carbon tax applying to CO2 emissions only (against no carbon tax) will be compared to the impacts of such a tax applying to both CO2 and non-CO2 greenhouse gas emissions (against no carbon tax). Results show the deviations in the impacts between with and without inclusion of non-CO2 emissions are more obvious in developing countries particularly by comparison to developed nations. Iran, for instance, experiences a higher reduction in real GDP of 1.52 percentage points when non-CO2 emissions are overlooked. These impact deviations also rise with increased costs to economies (e.g., more sectors involved or higher tax rates). We find developing countries experience higher contraction rates in their economies than developed nations. Iran, Kazakhstan, South Africa, China, India, Russia, Mexico, and Indonesia all experience 2–5.1% reductions in real GDP relative to business-as-usual (no carbon tax), while such reductions are below 0.8% in Australia, the United States and other developed nations because emission costs compared to economy size are relatively high in developing nations. Major polluting countries like China, the United States, India, and Russia were also found to have low marginal abatement costs compared to other nations due to high emission levels and input substitution possibilities. To provide more accurate and insightful impacts of climate change policies, we recommend future studies include both CO2 and non-CO2 emissions in models.

Extent of Rental Income Tax Compliance by Taxpayers’ in Zambia: Case of Residential Properties in Kitwe City

Government mainly raises domestic revenue through taxation such as income tax, value added tax and customs and excise duty. Residential rental income tax is a component of income tax. There is low rental income tax collections in Zambia caused by among other things low taxpayers’ compliance. In order to obtain insights about the actual realities on the ground and using Kitwe city as a case study area, the research evaluated the extent of residential rental income tax compliance among taxpayers in Zambia. Both primary data was obtained through use of semi-structured interviews and questionnaires while secondary data was collected from both published and grey literature. The research findings showed that there is low rental income tax compliance among taxpayers. Low taxpayers’ compliance is caused by limited taxpayers’ awareness on some aspects of rental income tax issues such as deadlines and modes of payments, tax officials not having the right attitude, the Zambia Revenue Authority website not being easy to navigate and use, high tax rate, erratic deregistration of taxpayers, and lack of a fair tax system. In view of the foregoing, the study recommends that in order to improve rental income tax compliance by taxpayers, there is need to: provide information to taxpayers on rental income tax, conduct training for tax officials, simplify Zambia Revenue Authority website, lower the rate for rental income tax, revert to landlords paying tax, and encourage fairness of the tax system

An evolutionary analysis of corruption in the process of collecting environmental tax in China.

Considering the bargaining power of enterprises, this paper distinguishes between "Offering Bribes Voluntarily" (OBV) and "Offering Bribes under Pressure from Environmental Inspectors" (NOBV). An evolutionary game model between environmental inspectors and enterprises is constructed to study the corruption of environmental inspectors in the process of environmental tax collection under the system of upward accountability. At the same time, numerical simulations are carried out using China's pollution discharge data and pollution discharge fee collection standards in 2017. The results show that when enterprises have different bargaining powers, there are differences in the evolutionary stable strategy (ESS) in the process of environmental tax collection. Enterprises with weak bargaining power may adopt "OBV" strategy. Under the system of upward accountability, it is difficult for the public to form adequate supervision over polluting enterprises and environmental inspectors. Only with the power of the upper-level government can the public's supervisory role be brought into play. High audit costs and environmental tax rates may be objective incentives for environmental inspectors' corruption and enterprises' bribery.

The Relationship between Taxation Levels and Economic Growth in Greece: Comparison with Selected Countries

Purpose: The purpose of this paper is to examine the effect of taxation levels on the economic growth of Greece over a period and compare the results with other European countries. A theoretical model connecting taxation rates, revenue and economic growth is difficult to apply because of the multitude of legislation acts, regulations, exemptions, and reforms regarding taxation. Design and Methodology: In the paper the percentage of direct, indirect, and environmental taxes to GDP, as well as the implicit taxation rates for consumption and labor are examined as to how they affect the GDP and GDP per capita growth rate for Greece, Germany, Italy, and Portugal over the period from 1995 to 2018. Findings: The results show that any increase or decrease in these taxation figures has a different effect on the economies of these countries because of the inherent differences in each economic environment. Practical implications: The common conception that high tax rates have a negative effect on the economy seems to apply only for the steady and growing German economy. For the Greek and the Portuguese economies, depression, external debt and changes in legislation and reforms add more factors that influence the economic growth and sometimes reverse the result. Originality/Value: While many studies have investigated the effect of taxation rates on the economic growth, the originality of this paper lies in the fact that it deals with the same subject specifically for Greece and compares the results with other European Union countries.

Reasons of Tax Evasion and Tax Avoidance: Case of Debre Markos Town, East Gojjam Zone, Amhara National Regional State

The main purpose of this study is to examine the causes of tax evasion and tax avoidance of tax payers’ reflection from Debre Markos town. Stratified sampling technique was applied to select respondents based on the nature of the tax payers by category A, B and C tax payers. The required sample was determined through proportional random approach from each stratum & a total of 365 taxpayers were taken as a sample. For the accomplishment of this study, the researcher used primary sources of data. Primary data were obtained through distribution of self-administered questionnaires to sampled respondents of 365 tax payers. The collected data has been analyzed through descriptive statistics by statistical package for social science (SPSS) software for the purpose of this study. The implications of these results were low quality of the service in return for taxes, absence of tax morality, non-existence of an equitable & efficient tax system and the existence of high tax rate. Poor relationship of tax payers & the authority, lack of adequate enforcement for default, lack of adequate tax incentives and greed and selfishness are not the major reasons for tax evasion and tax avoidance in the study area. Therefore, I recommended that, the town’s tax authority should promote the quality of public services, transparency and control of the public budget and minimize low tax morale by promoting a tax-paying citizen culture and educating taxpayers. Keywords: Tax Evasion, Tax Avoidance, Taxpayers, Causes, Ethiopia DOI: 10.7176/JESD/12-9-01 Publication date: May 31 st 2021

Profit shifting in Brazil and the impact of tax havens

ABSTRACT We investigate tax-induced profit shifting in Brazil and the impact of tax havens on the shifting behavior of firms. Profit shifting research in Brazil is virtually non-existent, although the shifting incentives in Brazil are prominent. Our research fills this gap with evidences in the novel Brazilian context. Profit shifting is a tax-minimization strategy where multinational enterprises perform intra-firm transactions to allocate taxable profits to low-tax locations. Brazil combines a remarking set of profit shifting incentives, especially a high corporate tax rate, extremely complex tax system, and distinguished transfer pricing rules. Further researches may leverage from the shifting incentives in Brazil, since it provides opportunities to investigate additional factors that affect the shifting behavior of firms. We analyze 989 transaction-by-country observations for the period of 2010-2017. Baseline analysis follows the robust least squares approach with controlling covariates. Linear estimate model derives from the conventional Cobb-Douglas production function, to analyze the impact of shifting incentives on profit maximization. We find that Brazilian firms have a high level of intra-firm transactions with related parties located in low-tax countries, especially with tax havens. It represents a strong evidence of profit shifting behavior in Brazilian firms.