Impact Of Tax Research Articles

From policy to progress: Environmental taxation to mitigate air pollution in OECD countries.

Environmental taxes play a critical role in mitigating air pollution and fostering sustainability by internalizing the social costs of environmental damage. By imposing financial disincentives on polluters, these taxes encourage cleaner practices and technological innovation. Using panel ARDL models, this study examines the impact of environmental taxes on CO₂ emissions across 38 OECD countries, accounting for cross-sectional dependence, non-stationarity, and heterogeneity. Findings reveal a significant long-run negative relationship between environmental taxes and CO₂ emissions and support the Environmental Kuznets Curve (EKC) hypothesis in high-income nations. The analysis highlights that while environmental taxes effectively reduce emissions at moderate and high levels, their impact diminishes at lower emission levels. Moreover, disaggregated analysis of fossil fuel consumption demonstrates a substantial decline in coal and oil usage, whereas natural gas consumption exhibits a positive association with taxes, reflecting a shift toward less carbon-intensive energy sources. The study emphasizes the importance of well-designed environmental tax schemes to maximize policy effectiveness.

Impact of Taxation on Small and Medium Enterprises (SMEs) In Akure South Local Government Area, Akure, Ondo State, Nigeria

Impact of Taxation on Small and Medium Enterprises (SMEs) In Akure South Local Government Area, Akure, Ondo State, Nigeria

Financial performance and capital structure of select hydropower companies in India: An Empirical Analysis

This research paper attempts to analyse the relationship between the capital structure and financial performance of two hydropower generation public sector undertakings in India. Secondary data sourced from the financial statements of the corresponding generating companies for the period from 2010-11 to 2016 is analysed using multi-correlation analysis. Results indicate that the capital structure negatively impacts profitability, consistent with the extant research on the subject matter as well as the underlying financial principle - more debt, more interest expenses, and hence lesser profitability. Moreover, in consonance with the MM hypothesis, the present research has revealed that the interaction of tax and capital structure results in the negative impact of tax on the capital structure.

The Predictive Ability of Taxable Income for Future Performance: The Impact of High Tax Planning*

ABSTRACTThis research examines whether high tax planning affects the predictive ability of taxable income for firms' future operating performance. Using US‐listed firms for the period 1988 to 2016, this study finds that high tax planning reduces the ability of taxable income to predict future performance, measured as 1‐, 2‐, and 3‐year‐ahead operating cash flows. It also shows that high tax planning decreases the incremental predictive value of taxable income for future performance beyond book income and operating cash flows. This study contributes to the existing literature on the informative nature of taxable income and enhances our understanding of how tax planning affects the information content of taxable income, particularly its predictive ability for firms' future performance. These findings suggest that, when using taxable income to predict future performance, financial statement users should consider the level of aggressiveness in firms' tax planning activities.

The Impact of Taxation on the Performance of Small to Medium Enterprises (SMEs) in the Lowveld/Chiredzi District

This study investigates the impact of taxation on the performance of small and medium enterprises (SMEs) in the Lowveld of Zimbabwe. SMEs are crucial for economic development, job creation, and poverty reduction in Zimbabwe. However, high tax levels and complex tax systems pose significant challenges for these businesses. The primary problem addressed in this study is the negative impact of taxation on SME performance in the Lowveld. The aim is to understand the specific tax-related challenges SMEs face and to propose solutions that could enhance their performance and sustainability. The study is grounded in three key theories: The Theory of Taxation and Economic Growth, the Laffer Curve Theory, and the Theory of Compliance Costs. These theories provide a foundation for analyzing how different aspects of taxation influence SME performance. The researcher employed both qualitative and quantitative data since they all provide in-depth data about the relationship between taxation and SME performance. This study employed a descriptive research design, using document analysis, observation schedules, and questionnaires. Fieldwork revealed that high tax rates, lack of tax knowledge, and inefficient tax administration are major obstacles for SMEs. These factors negatively affect profitability, cash flow, and overall financial health. The average rating for ease of meeting tax obligations was 3.33 out of 10, highlighting the severe impact of taxes on business operations. The study concludes that taxation significantly hinders the performance of SMEs in the Lowveld. High tax burdens, coupled with poor tax knowledge and administrative inefficiencies, undermine SME growth and sustainability. To mitigate these challenges, the study recommends improving tax education among SME owners, simplifying tax administration processes, and introducing more effective tax incentives. These measures could alleviate the financial burden on SMEs, fostering a more conducive environment for their growth and contribution to the economy

Navigating the Transition to Green Mobility: Assessing the Impact of Tax Incentives on Vehicle Efficiency and Market Dynamics in Italy

Navigating the Transition to Green Mobility: Assessing the Impact of Tax Incentives on Vehicle Efficiency and Market Dynamics in Italy

The effects of unilateral climate policy towards agriculture: A case study of Denmark

AbstractTo meet their climate policy obligations towards the EU, some EU member states will have to adopt strict climate policies towards agriculture. Responding to this need, the Danish parliament recently decided to impose a tax on greenhouse gas (GHG) emissions from the country's livestock production. We develop a simple model of primary agriculture and its interaction with the food industry to illustrate the main economic mechanisms determining the impact of a unilateral tax on GHG emissions from domestic agriculture. To study the allocation effects of the GHG tax on agriculture and the impact on the wider economy over time, we then present a disaggregated dynamic simulation model of Danish agriculture, embedded in a large‐scale computable general equilibrium model. The model predicts that a large share of the cost increase induced by the tax will be shifted forward onto higher input prices in the food industry and ultimately onto consumers via higher food prices, but landowners will also bear a significant part of the burden through a fall in land prices. The GHG tax will induce a reallocation from animal to plant production, which would be even more pronounced in the case of a livestock‐specific tax as currently foreseen, and from conventional to organic farming. This will help to reduce the total emissions from agriculture, but the largest share of the emission cuts will stem from a fall in output, as there are still few low‐cost technical abatement possibilities in agriculture.

Fat vs. Sugar: The Case for a Saturated Fat Tax in Italy.

When judging the distributional impact of unhealthy food taxes, what matters is not just how much low income people would pay but how much the such taxes would benefit or harm them overall. In this paper, we assess the consumer welfare impact of a fat tax net of its expected benefits computed as savings from weight loss. Using Italian data, we estimate a censored Exact Affine Stone Index (EASI) incomplete demand system for food groups, simulating changes in purchases, calorie intake, consumer welfare, and the monetary value of short-run health benefits. While the Italian government has proposed a sugar tax, we show that there is no significant excess consumption of added sugars among Italian adults. Instead, excessive fat consumption is more prevalent, making a fat tax a more compelling and effective solution to address diet-related health risks. Our results suggest costs from fat taxation are larger than benefits at all income levels. As a fraction of income, the net impact would be slightly regressively distributed.

The impact of indirect taxes on the total fixed capital formation (capital formation) in Iraq for the period (2003-2020)

The impact of indirect taxes on the total fixed capital formation (capital formation) in Iraq for the period (2003-2020)

Impact of Goods and Service Tax on the Business of Traders & Manufacturers

Impact of Goods and Service Tax on the Business of Traders & Manufacturers

Public spending for environmental protection in the UK: The environmental impact of environmental taxes, renewable energy, and nuclear energy

Public spending for environmental protection in the UK: The environmental impact of environmental taxes, renewable energy, and nuclear energy

The Long-Term Impact of In-Utero Cigarette Taxes on Adult Prenatal Smoking

The Long-Term Impact of In-Utero Cigarette Taxes on Adult Prenatal Smoking

The impact of environmental tax on R&D investment of heavily polluting companies: Incentive or inhibition?

The impact of environmental tax on R&D investment of heavily polluting companies: Incentive or inhibition?

The Impact of Tax and Accounting Information System Characteristics on Organizational Performance

The Impact of Tax and Accounting Information System Characteristics on Organizational Performance

Effects of a policy mix of uniform or unilateral environmental tax and trade liberalization on economic welfare

ABSTRACT To address global warming, the EU introduced the Carbon Border Adjustment Mechanism in 2023, raising concerns about its potential negative effects on GDP and trade volumes in the Global South, including China, India, and African countries. The Border Tax Adjustment (BTA) is perceived as a discriminatory environmental tax by firms, impacting pollution levels by changing productivity through entry and exit. Employing an R&D-based growth model with heterogeneous firms, I examine the impact of a discriminatory environmental tax and trade liberalization on welfare. Results indicate that under the BTA, tax hikes on exporters improve welfare, while the welfare effect of trade liberalization varies based on tax rates. Ideally, abolishing the BTA improves, while its maintenance necessitates cautious consideration, as liberalization can enhance welfare when excessive trade liberalization is avoided. A thorough examination of the pros and cons of the BTA policy is imperative.

Enhancing Public Financial Transparency Through the Integration of Taxation, Accounting, and Social Welfare Systems

This study explores the impact of taxation, accounting, and social welfare system integration on public financial transparency in Indonesia. The study collected data from government reports and interviews with financial policy experts, auditors, and government officials using mixed methods, including quantitative and qualitative analysis. The analysis results show that system integration significantly improves transparency through more accurate fiscal reporting and better access to public financial information. Challenges such as technology implementation costs, bureaucratic resistance, and capacity gaps still hamper the integration process. These findings align with existing literature, which underlines the importance of political support and capacity building to overcome these obstacles. This study recommends better training and international support to support system integration efforts and improve accountability and public trust in state financial management.

Exploring the Impact of Taxes, Firm Size and Bonus Mechanisms on Transfer Pricing Decisions

This research examines the impact of tax variables, company size, and bonus mechanisms on corporate decisions to engage in transfer pricing. The study focuses on manufacturing companies listed on the Indonesia Stock Exchange (BEI) during the 2014–2016 period, with 34 firms selected using the purposive sampling method. Secondary data was analyzed using multiple linear regression with a 5% significance level, processed through SPSS v.20 software. Findings reveal that tax variables, company size, and bonus mechanisms positively influence transfer pricing decisions. This suggests that companies leverage these factors to optimize tax burdens while adhering to internal and external incentives. The managerial implications underscore the importance of understanding international tax structures and regulations to implement legal transfer pricing strategies effectively. This study contributes original insights by integrating the bonus mechanism as a key determinant in transfer pricing, highlighting how internal compensation influences managerial decisions. The use of purposive sampling and robust statistical methods provides actionable recommendations for both regulators and corporate management. These findings encourage balancing tax optimization with ethical and compliance considerations, ensuring sustainable and transparent transfer pricing practices.

Impact of Environmental Protection Tax on Enterprise Capital-Labor Allocation in the Context of High-Quality Economic Development

Using a double-difference model, this paper examines the impact of the 2018 Environmental Protection Tax Law of the People’s Republic of China on the capital-labor ratio of A-share listed enterprises in China. The results indicate that the implementation of the environmental protection tax significantly increases the capital-labor ratio of firms, leading to a preference for capital-intensive production. The mediating role of total factor productivity (TFP) in this process suggests that the environmental protection tax enhances the capital-labor ratio by fostering TFP growth. Heterogeneity analysis reveals that the effect of the environmental protection tax on the capital-labor ratio is more pronounced in economically developed regions, state-owned enterprises, and enterprises with a longer operational history.

Simulation of Carbon Tax Impact on the Competitiveness of the Manufacturing Industry in Indonesia Using a System Dynamics Approach

This study investigates the impact of carbon tax on the competitiveness of Indonesia’s manufacturing sector using a System Dynamics (SD) approach. The analysis explores how different carbon tax levels—0, 30, and 200 IDR/kg CO2e—affect production inputs, outputs, and added value. The results show that manufacturing inputs remain low and stable at 0 IDR/kg CO2e due to the lack of financial pressure to reduce fossil fuel consumption. However, input costs increased slightly at 30 IDR/kg CO2e, prompting industries to adopt energy-efficient technologies to manage costs. The highest tax level, 200 IDR/kg CO2e, significantly raises input costs, compelling manufacturers to invest in low-carbon technologies to mitigate the cost burden. The study also assesses the impact of carbon taxes on output and value-added in the manufacturing sector. While carbon taxes initially reduce value added due to increased input costs, investments in green technologies can help companies recover and improve productivity over time. Higher tax rates, such as 200 IDR/kg CO2e, push industries towards significant technological shifts, potentially enhancing long-term competitiveness. The research highlights the importance of supportive policies, including subsidies for renewable energy and efficiency incentives, to facilitate the transition to greener production methods. Overall, the study concludes that well-designed carbon tax policies can drive industrial sustainability while maintaining economic growth in Indonesia.

Changes in retail cigarette price after tax increase: Findings from the 2018-2020 ITC Vietnam surveys.

No longitudinal study has investigated the impact of cigarette tax increases on retail prices in Vietnam. This study aims to describe changes in the purchase price of cigarettes following an excise tax increase from 70% to 75% in January 2019. Data were collected from people who currently smoke cigarettes in the longitudinal ITC Vietnam surveys: 1870 participants in Wave 1 (pre-increase), 1564 in Wave 2 (post-increase), and 1308 in Wave 3 (post-increase). Weighted mean self-reported prices of a cigarette pack (with standard error) were calculated for participants who were successfully followed up across three waves. These mean prices were calculated for domestic and international brands, categorized by specific cigarette brands. Percentage changes in mean prices were also measured, and significant differences in mean prices between follow-up waves (Waves 2 and 3) and the baseline (Wave 1) were assessed using paired t-tests. For brands with very small sample sizes, we used non-parametric tests, specifically the Wilcoxon signed-rank test instead of paired t-tests. The weighted mean price of a cigarette pack remained low and stable: VND 12330 (US$0.54) in 2018, VND 12700 (US$0.55) in 2019, and VND 12120 (US$0.53) in 2020 (1000 Vietnamese Dongs about US$0.04345, at 2018). International brands were substantially more expensive than domestic brands, but prices for both remained constant across all waves. Among domestic brands, Thang Long and Sai Gon showed slight price increases of around 3% and 5%, respectively (p<0.05). Among international brands, no statistically significant increase in mean prices was observed. The retail price of cigarettes remains low, indicating that the slight tax increase was insufficient to raise the current retail price significantly. Therefore, a substantial increase in cigarette prices by adding a specific tax is necessary.