Income Tax Exemption Research Articles

Nexus of Tax Law and Non-Profit Organizations: Incentives and challenges in compliance with tax laws by Public Benefit Organizations in South Africa: a scoping review

This study examines the tax incentives and challenges faced by Non-Profit Organisations (NPOs) in South Africa, with a focus on those registered as Public Benefit Organisations (PBOs). NPOs play a vital role in addressing socio-economic issues, and serving vulnerable communities. While these organizations operate for non-profit purposes, the tax incentives provided by the government are crucial for their financial sustainability. Therefore, establishing a supportive tax framework is essential to promote their growth and operational capacity. A scoping review methodology was employed, analyzing literature on tax incentives and compliance challenges faced by South African NPOs from 2010 to 2023. Key provisions include income tax exemptions under Section 10(1)(cN), capital gains tax exclusions, and Section 18A tax-deductible donations. The study also explored the legal framework governing tax-exempt status and trading activities. Findings show that while tax incentives provide significant benefits, NPOs face challenges in maintaining compliance, such as complex regulations, limited financial resources, and a lack of expertise. Many struggle with differentiating between exempt and taxable activities. Strategies to address these issues include simplifying tax processes, enhancing financial management education, and improving communication between SARS and NPOs. Introducing user-friendly tax reporting systems and tailored support could further boost compliance and ensure NPOs maximize available benefits. These insights are valuable for policymakers and tax authorities seeking to strengthen the regulatory framework and support the growth of NPOs in South Africa.

Taxes and Islamic Philanthropy: Unlocking the Potential of Waqf in Individual Tax Reductions

Waqf, which is a form of Islamic philanthropy based on the principles of social justice and wealth distribution, has great potential to influence tax structures and government policy. This study examines the potential for integration between the tax system and Islamic philanthropy, with a focus on utilizing the concept of waqf as an instrument to reduce individual tax burdens. The research method is a literature survey of more than 20 articles related to social funds sourced from waqf as a strength of Islamic philanthropy by trying to study and analyze using qualitative methods. The results of the research are that there are five strategies that can be implemented within the framework of waqf cooperation with taxes. First, waqf assets that have been developed and have added value are entitled to tax benefits. Second, the results of cash waqf investments are eligible for tax incentives. Third, waqf assets may qualify for income tax exemption. Fourth, provide tax benefits to waqf donors. Lastly, provide tax incentives to business actors who help waqf institutions or movements. So the potential of waqf as a tax reduction instrument can be optimized, providing significant benefits for Muslim communities and driving the sustainable growth of Islamic philanthropy.

Fiscal Policy to Encourage Investment in the Marine Logistics Sector

The marine logistics sector plays a crucial role in a country's economic growth, particularly for archipelagic nations like Indonesia. However, investment levels in this sector remain low, which can hinder potential economic growth. This research aims to analyze various fiscal policies that can encourage investment in the marine logistics sector. The methods used in this research are qualitative and quantitative descriptive analysis. The results indicate that fiscal policies such as tax incentives, subsidies, and government funds allocated for maritime infrastructure development can increase the attractiveness of investment in this sector. Tax incentives, such as reductions in corporate income tax rates, exemptions or reductions in import taxes for equipment, and tax allowance facilities, can be effective instruments to attract investment. Subsidies, such as capital assistance, low-interest loans, and operational cost compensation, can also help reduce investment risks and encourage investor participation. Additionally, adequate allocation of government funds for the development of maritime infrastructure, such as ports, docks, and other logistics facilities, is crucial for enhancing the sector's efficiency and competitiveness. However, fiscal policies alone are not enough. Improved regulations and better law enforcement are also necessary to create a conducive investment climate in the marine logistics sector.

Optimizing Income Tax Exemption: A Focus on the 'Subsistence Minimum' Threshold

This article delves into the establishment of a perspective on introducing non-taxable income for individuals, emphasizing the effective organization of tax relations. Employing a rigorous research methodology, the study aims to provide conclusive insights, scientific recommendations, and practical guidance. The goals encompass fostering a deeper understanding of non-taxable income implications, while the methods involve a comprehensive examination of tax reforms, benefits, and personal income taxation. The results offer valuable perspectives on optimizing taxation systems, particularly in relation to the subsistence minimum. The implications of this research extend to informing global tax policies, promoting efficiency, and ensuring equitable fiscal practices.
 Highlights:
 
 The article explores the introduction of non-taxable income, addressing key issues in tax relations.
 It provides conclusive insights, scientific proposals, and practical recommendations for optimizing taxation systems.
 The research emphasizes the importance of fostering equitable fiscal practices and informing global tax policies.
 
 Keywords: Tax Relations, Tax-Free Income of Individuals, Personal Income Tax, Property Tax, Fiscal Practices

The role of tax incentives in attracting foreign investment: international case studies

Latin America recognizes the importance of tax incentives to stimulate economic development and attract investment. Strategies such as income tax exemption, reduced rates and tax credits are applied to encourage investment, especially in remote areas. The region seeks to attract foreign direct investment (FDI) through special regimes with additional benefits. In this regard, the International Monetary Fund highlights FDI as a tool to establish long-term connections and improve economic growth. However, the implementation of tax incentives faces challenges, such as the possible decrease in tax collection and the complexity of tax systems. High tax burden, fiscal instability and evasion are also challenges that can affect the attraction of foreign investors. On this basis, the present research seeks to examine the impact of tax incentives on the region's ability to attract foreign investments.

Favoured subjects. The myth of the Middle Class and the imaginary of Cluj IT

Abstract Romanian IT professionals are marketized as young, highly skilled, and full of potential individuals. However, there is a contradiction in their image. In the discourse of international outsourcing, they are presented as cheap labour, while on the national and local level they are considered high earners. Under the privilege of income tax exemption, the IT sector is continuously growing and attracting labour, providing well-paying entry-level jobs and bringing in foreign capital. At the same time, on a symbolic level, it also developed a reputation as a facilitator of social ascension and of importer of European ideas. In this paper I aim to examine what drives people towards professional reorientation to IT. How is the idea of the middle class being used? What is the imaginary that makes people take on the risky and arduous road of re-professionalization and what are its consequences?

Preface

Preface

Research on the Impact of a New Round of Tax Reduction and Fee Reduction Policies on the High Quality Development of Small and Medium-sized Enterprises

As a powerful measure to deepen the supply-side structural reform, tax reduction and fee reduction policies play an important role in promoting the high quality development of small and medium-sized enterprises(SMEs).This paper selects 582 SMEs listed on China's A-share market from 2018 to 2021 to measure their high quality development level and explore the policy effect of the new round of tax reduction and fee reduction policies implemented since 2018.The results show that the reduction and exemption of value-added tax(VAT) and social insurance premiums are conducive to improving the high quality development level of SMEs, and the impact of income tax reduction on the high quality development level of enterprises is not significant, and the income tax burden between enterprises is quite different. Therefore, this paper puts forward some policy suggestions to further implement of the tax and fee reduction policies, consolidate the achievements of the existing tax and fee reduction policy, improve the tax structure of enterprise VAT and social insurance premiums, implement differentiated income tax reduction and exemption policy, and guide the high quality development of SMEs.

Legal Certainty of Income Tax Exemption on the Transfer of Rights to Land in the Sharing of Collective Integration Rights

The transfer of property to certain heirs for the joint ownership of the object of inheritance must be transferred by way of the distribution of joint rights, which is based on the APHB. Article 4 paragraph (3) letter b of the Income Tax Law explains that the transfer due to inheritance is exempt from collecting PPh, but in its implementation it must be accompanied by a PPh SKB issued by KPP Pratama. So that in order to get the income tax exemption on the transition, the heirs must apply for the issuance of the SKB PPh to the KPP Pratama. However, the KPP Pratama often refuses the issuance of the SKB PPh, this results in the heirs having to pay PPh on the transition. This study uses a normative juridical method with a statutory approach and a conceptual approach, and legal materials are analyzed using a deductive method. The results of this study indicate that the transfer of land rights by the distribution of joint rights of inheritance should be exempted from income tax, because the distribution of joint rights is still included in the series of inheritance processes, so the transfer of income tax collection must be exempted. So that legal reform is needed to provide legal certainty in the exemption of PPh on the transition.

Tax Incentives and Firm’s Profitability: Evidence from Manufacturing Companies

This research work centered on the establishment of the how tax incentives can improve profit statement of selected manufacturing companies in Nigeria. The major objectives of the research paper is to determine the effect of tax procedures on profitability of firm in selected manufacturing companies and to determine the effect of tax incentives on profitability of firms in selected manufacturing companies, primary source of data which was questionnaire was adopted for this research work and based the peculiarity of the research paper title and population consisted selected manufacturing companies in Nigeria. The hypotheses were tested and analysed through the aid of Statistical Tools for Social Science (SPSS version 23). The results of the analysis established that tax incentives has no positive and significant impact on the profitability of fifirms of listed manufacturing companies in Nigeria. However, the researcher was of the opinion that with the tax-exempt income and loss relief, there is a significant relationship between tax incentive and profitability of firms of listed manufacturing companies in Nigeria. The study concludes that the government of Nigeria should encourage tax incentives in some industries which increase their returns on asset. In addition, manufacturing companies that encounter losses may apply those losses to previous tax payments in order to boost their returns on assets. This is based on the condition that they do not demand existing refunds in excess of cumulative tax payments in those years. In this study, the researcher recommends that manufacturing companies in Nigeria be made more aware of the importance of tax incentives. They should also be required to take advantage of such incentives to increase the country’s manufacturing industries. Finally, policy makers should help to create a more enabling climate by providing good roads and electricity, which have become the primary causes of manufacturing firms profit losses. Keywords: Manufacturing Firms: Tax Incentives: Organizational Profitability: Nigeria

ДОСВІД РОЗБУДОВИ ТЕРИТОРІІ ХОРВАТІЇ ПІСЛЯ ЗБРОЙНОГО КОНФЛІКТУ: УМОВИ, ПРІОРИТЕТИ ТА ІНСТРУМЕНТАРІЙ

The article examines experience of the Republic of Croatia in the development of de-occupied and affected territories post the armed conflict. The authors analyzed economic and legal conditions for the construction of the Croatian territories destroyed after the armed conflict and their financial support by international donors through the creation of local economic development agencies, development and implementation of the local economic development concept in Croatia and adaptation of the legal framework to new economic goals. The priorities and four components of the strategic project of the social and economic recovery of Croatia have been determined. The first component of the project aimed at attracting investment in territorial communities, the second component devoted to the process of demining de-occupied territories, the third is the provision of consulting services to strengthen management potential, and the fourth component of the project aimed at supporting sub-projects in such areas as: social integration, economic revival and infrastructure for small communities in Croatia. The article demonstrates the economic and legal instruments of special state support for the development of the de-occupied territories of Croatia as well as the classification of territories requiring special state support. Emphasis placed on the expediency of state administration decentralization and the use of tax incentives, including real estate transfer tax, income tax received in the territory of special state supervision and corporate tax. In addition, noteworthy is the creation of three types of territories that received special state aid through income tax exemption or tax rate differentiation over time. Special state support was provided by providing housing to the population affected by the “Croatian War”. The conducted research made possible to establish the successes and shortcomings of the Croatian experience for the possible extrapolation of developments to Ukrainian realities.

Regional investment aid in Poland and Czechia

The European Commission aims to ensure the transparency of aid granted by individual member states, and the simplest and most transparent instrument of support, next to grants, are tax relief. In both Czechia and Poland, investment incentives for new investments include regional aid in the form of tax relief in income tax – this includes income tax exemptions in Poland, and income tax relief in Czechia, as well as property tax exemptions in both countries. The purpose of this article is to compare the scope and conditions for receiving regional investment aid by entrepreneurs in these countries.

A disappointing Budget -2022 so far as Health Insurance Protection is concerned especially during the critical period of covid influence

The expectations were soaring amongst the general public just before the 2022 budget with hopes in respect of reduced Income Tax rates or increased exemption limits etc. One of the biggest expectations was in respect of upward revision in Section 80 D limits which refers to health insurance premium paid and the same has not been revised for long time. Over the years, the health insurance premium has increased substantially and more so due to huge claims from Covid in last two years. But, much to shock of all Income Tax Payers, the, Section 80 D limits remains untouched. There are also other policies which comes under the broad category of Health Insurance that does not qualify for Income Tax exemption but merits serious consideration. Health Insurance policies are subject to GST of 18% which is certainly too high especially when the Government should have looked at initiating major step to boost the health insurance penetration and make feel people more secured. For an individual to manage one’s health risk properly, he/she need to have more than one type of health insurance policies for adequate amount with all applicable riders or add-on covers which matters and all dependents like spouse, children and parents being completely covered.

Kontruksi Hukum Pembebasan Pajak Penghasilan Terhadap Peralihan Hak Atas Tanah Dalam Pembagian Hak Bersama Waris

Tax as a source of state revenue play an important role in the life of the state, especially in development, so taxpayers in carrying out their obligations must be given definite legal guarantees by the state. However, this is not reflected in the regulation on the exemption of income tax on the transfer of land rights by sharing rights with inheritance, because the heirs must continue to pay income tax, so they are burdened with double taxes. This is because the regulations in the law and its implementing regulations do not provide firm legal certainty, therefore, to overcome these problems, it is important to find an ideal legal construction in setting the income tax exemption. This study uses a normative juridical method, with a legal approach and a conceptual approach. The results of the research carried out are that there is a vagueness of norms in the regulation of income tax exemption in inheritance, besides that there is also a gap in norms related to the criteria for acceptance and rejection of applications for the issuance of SKB PPh. So that the author provides an option for future arrangements related to the exemption of income tax on the transfer of land rights in inheritance, especially the distribution of joint rights, which is expected to provide benefits and a sense of justice for the heirs.

Benefits of Final Income Tax Exemption for certain UMKM

Benefits of Final Income Tax Exemption for certain UMKM

Agricultural Income Tax in India: Introducing Threshold-Based Tax Exemption

Agricultural income earned by a person in India is exempted from taxation as far as the Income Tax Act, 1961 is concerned. This article explores the case for introducing threshold-based Agricultural Income Tax (AIT) exemption in India. The article examines this proposal using the existing literature and body of work available on the subject. The study comes to the conclusion that the existing blanket exemption on agricultural income is undesirable from the perspective of fiscal policy and principle of equity. It is suggested that a reasonable monetary threshold should be defined above which agricultural income will be subject to taxation at the national level. The findings indicate that such a measure will increase revenues, check tax evasion and widen the tax-base in the country. It has also been proposed that AIT should be implemented by the Central government at the national level, and the local government authorities must also be involved for information collection and monitoring at the ground level. Finally, the study suggests some policy strategies to implement and administer threshold-based AIT in India.

Employment Structure and the Rise of the Modern Tax System

This paper studies how the transition from self-employment to employee-jobs over the long run of development explains growth in income tax capacity. I construct a new database which covers 100 household surveys across countries at different income levels and 140 years of historical data within the US (1870-2010). Using these data, I first establish four new stylized facts: 1) within country, the share of employees increases over the income distribution, and increases at all levels of income as a country develops; 2) the income tax exemption threshold moves down the income distribution as a country develops, tracking employee growth; 3) the employee share above the tax exemption threshold is maximized and remains constantly high; 4) movements in the tax exemption threshold account for the observed variation in tax collection across development. These findings are consistent with a model where a high employee share is a necessary condition for effective taxation and where the rise in income covered by information trails through increases in employee shares drives expansion of the income tax base. To provide a causal estimate of the impact of employee share on the exemption threshold, I study a state-led US development program implemented in the 1950s-60s which shifted up the level of employee share. The identification strategy exploits within-state changes in court-litigation status which generates quasi-experimental variation in the effective implementation date of the program. I find that the exogenous increase in employee share is associated with an expansion of the state income tax base and an increase in state income tax revenue.

Employment Structure and the Rise of the Modern Tax System

This paper builds a new microdatabase that covers 100 countries at all income levels and long-run time series in the United States (1870–2010) and Mexico ( 1960–2010) to document how the modern tax system arises over development. I establish a new set of stylized facts, which show that the income tax exemption threshold decreases in the income distribution as a country develops, tracking growth in the employee share of employment that occurs gradually further down the income distribution. Additional evidence supports the interpretation that the rise in third-party covered income through increases in employee share drives expansions of the income tax base over development. (JEL D31, H23, H24, H71, J22, J23, N40)

A Study on Improvement Plans for Public Interest Performance and Tax Balance: Focusing on public interest, and tax benefits

A Study on Improvement Plans for Public Interest Performance and Tax Balance: Focusing on public interest, and tax benefits

The unintended impact of housing provident fund on income inequality in urban China

We use the China Household Income Project (CHIP) data to evaluate the impact of the Housing Provident Fund (HPF) on income inequality in urban China. We find that urban residents differ significantly in their accessibility to and intensity of utilization of the HPF. Those who work in the public sector, in monopolistic industries, and possess managerial or professional occupations are more likely to benefit from the HPF, leading to further income inequality. Our research also emphasizes four mechanisms through which the HPF affects income inequality. The foregone interest due to compulsory HPF saving is the only mechanism that decreases the inequality, whereas the employer's match, personal income tax exemption on the HPF, and lower interest expense due to acquiring the HPF loan increase inequality. The evidence highlights the HPF's unintended redistributive impacts and thus the necessity of enhancing equity in the ongoing HPF reform.