Income Tax Policy Research Articles

Canadians with Disabilities: Income Security and Tax Policy

Canadians with Disabilities: Income Security and Tax Policy

Effect of Perceived Usefulness of Digitized System on Rental Income Tax Compliance Among Landlords in Makadara Constituency, Nairobi County, Kenya

Purpose: Despite the tremendous growth in real estate, the corresponding tax collection from the sector has remained low. The contribution by rental income earners has been low despite all the efforts to enforce rental income tax policies. The study examined the perceived usefulness of digitized system on rental income tax compliance among landlords in Makadara Constituency, Nairobi County, Kenya. Methodology: It was guided by a unified theory of acceptance and use of technology the study adopted an explanatory research design. The target population was 4,927 landlords in Makadara Nairobi County. The sample size of the study was 369, and the study questionnaires that were correctly filled and returned were 230. The study used primary data which was collected using structured questionnaires with close-ended questions and a pilot test was conducted to test reliability and validity. Results: The study found that Perceived usefulness of digitized system and rental income tax compliance, β=0.261 p-value =0.000<0.05. Conclusion: Based on the findings the study recommends that the KRA should launch widespread campaigns to educate landlords about the usefulness of digitized systems. Future studies could be conducted to determine the impact of tax reforms on rental income tax compliance.

The Impact of Corporate Tax on Investment

According to the experience of developed countries in the world, improving the corporate tax system is important in ensuring the stability of the economy, increasing business and investment activity. The work is devoted to one of the most topical issues of today, which discusses the impact of income tax on investment attraction. This work is aimed at ensuring the compatibility of income tax and investment, and taxes are aimed at pursuing a prudent tax policy as a regulator of the economy. Proposals and recommendations have been developed to stimulate investment activity through income tax benefits, to ensure high efficiency of income tax and investment policy.

Taxation Models and Improvement Proposals for Personal Income Tax in the Sharing Economy

As an innovative economic model, the sharing economy has seen rapid growth globally in recent years. It has not only brought a profound impact on traditional economies but also injected new vitality and momentum into the sustainable development of the social economy. However, for the sharing economy, the process of collecting personal income tax is facing several issues, such as the ambiguity of tax policies regarding personal income, challenges in identifying taxpayers, and difficulties in defining income. To achieve the fairness and efficiency of personal income tax collection in the sharing economy, this study proposes optimized regulatory mechanisms and conducts in-depth discussions on the adjustment of personal income tax policies, innovation in tax management technology, and improvement in the quality of personal income tax services.

Top income inequality and tax policy

Top income inequality and tax policy

Top income inequality and tax policy

Abstract The share of pre-tax income flowing to the top of the UK income distribution increased continually and substantially in the three decades leading up to the financial crisis, but has changed little since 2013. Using microdata sampled from UK tax records, we describe the nature of top incomes in the UK and how they are taxed. We show that wage income is the dominant source of pre-tax income, even for highest-income 0.1% of UK adults. However, ‘active’ business income—derived from self-employment or closely-held incorporated businesses—is considerably more important for the top 1% than for those with lower incomes. High-income wage earners work disproportionately in financial services. The high-income self-employed are predominately working in partnerships in professions such as accountancy and legal services. Overall, UK income taxes are progressive: average tax rates rise with income. Taxes on top incomes have been increased since 2010, with the result that the post-tax share of income flowing to the top has fallen. But average tax rates vary significantly within the top and depend on how income is received. Incomes from business ownership and investment are taxed at lower rates than employment income. We discuss options for reforming the taxation of top incomes.

Discussion of top incomes and tax policy

Abstract This commentary begins with six general observations about top incomes and taxation. Then, it provides some commentary on the article ‘Top income inequality and tax policy’ by Delestre et al. (2024), and concludes with a brief discussion on the revenue potential of top capital gains taxation.

PENSIONS, INCOME TAXES, AND HOMEOWNERSHIP: A CROSS‐COUNTRY ANALYSIS

AbstractThe article studies the role of pensions and income taxes in determining homeownership. We develop a stochastic, overlapping generations model with tenure choice and heterogenous skill types calibrated to Germany. Then, we simulate alternative income tax and pension policy structures from the United States and Australia, since these developed nations have similar incomes per capita, but highly different homeownership rates. Our results highlight that the pension system and its financing have decisive long‐term effects on homeownership. The latter is even more significant than income tax, where labor and capital income taxation affect homeownership in opposite directions.

The Inflation-Inequality Connection in the European Union: U-Turn to Equity?

In this study, we delve into the complex relationship between inflation and inequality in the European Union from 1990 to 2019. Specifically, we explore the non-linear nature of this relationship, uncover turning points, and reveal the distinctive U-shape of the relationship be- tween the two indicators. Our research also uncovers some striking findings: first, we discover that sales taxes disproportionately harm households and drive up inequality, and second, we find that income tax policies are very effective at reducing inequality in Western European countries, while they are substantially less effective in Eastern European countries with lower income tax rates.

Pay dissatisfaction and withdrawal behaviour of employees in the civil service: does personal income tax regime matter?

PurposeThe aim of the study is to explore the links between multiple personal income tax regimes, pay dissatisfaction, employee lateness and absenteeism. Accordingly, this paper examines the relationships between income tax policies, pay dissatisfaction and the work withdrawal behaviours of employees in the public service.Design/methodology/approachThe study adopted a quantitative design, and data were collected through a structured questionnaire from a sample of 252 respondents from the Bayelsa State Civil Service in Nigeria. Data were analysed by applying multivariate regression and structural equation modelling through the use of Stata software version 12 and SmartPLS version 4.FindingsThe results demonstrated that there was a positive relationship between personal income tax regimes and pay dissatisfaction; there was a positive relationship between pay dissatisfaction and work withdrawal behaviour of employee tardiness and absenteeism and pay dissatisfaction mediated the relationships between personal income tax regimes and work withdrawal behaviours of public sector employees.Originality/valueThe study appears to be the first to explore the nexus between personal income tax regimes and pay dissatisfaction and withdrawal behaviours of employee tardiness and absenteeism as well as the mediating role of pay dissatisfaction in public service organisations.

Impacts of emission trading scheme in Vietnam: A perspective of revenue redistributions

AbstractWith ambitious emission reduction targets presented in the international commitments, Vietnam has a pathway to implement an emission trading scheme (ETS) to curb its carbon emissions. However, research on the impacts of ETS in Vietnam is still unclear, especially since there is no study on ETS revenue redistribution policies. By developing a computable general equilibrium (CGE) model, this paper simulates the potential impacts of the ETS with different revenue redistribution options. The results indicate that to achieve Vietnam's target of 15.8% carbon emission reduction, the carbon price would significantly affect the economy with a GDP drop of 3.7% and a welfare loss of 2.89% of GDP. The revenue redistribution policies would lighten these negative impacts. While transferring to government activities reduces GDP loss, reducing income tax policy results in welfare improvement. At the sectoral level, the electricity sector is most negatively affected and also plays a key role in reducing carbon emissions in Vietnam. The revenue redistribution for government activities could improve outputs for the construction and some heavy industries while the revenue redistribution policy for households creates improvements for light industries and the electricity industry.

법인세 인하가 기업 투자를 촉진하는가: 조세조정 토빈q 모형을 사용한 실증분석

This paper is to investigate the effect of corporate income tax on business investment by using panel data of Korean companies between 1983 and 2022. This paper estimates tax term in the tax-adjusted q model before and after economic crisis.
 The tax term estimation between 1983 and 1997 shows that the effect of corporate income tax rate on investment was strong before Korean financial crisis. Corporate income tax cut promoted significantly business investment. The estimation between 1998 and 2010 after Korean financial crisis shows that corporate income tax cut promoted moderately business investment. But the estimation between 2011 and 2022 shows that the effect of corporate income tax rate on investment is insignificantly small. Corporate income tax cut promote barely business investment after global financial crisis in 2008.
 Empirical results in this paper provide the new perspective on the corporate income tax policy. The Effect of the corporate income tax cut policy on business investment decreases rapidly as tax rate decreases and tax rate cut reduces the effect of tax incentive policy, such as investment tax credit and depreciation savings on investment.

Contribution and Effectiveness of Remuneration Tax in Nepal

The research has been carried out with the aim to examine the contribution and effectiveness of remuneration tax in Nepal. Both primary and secondary sources of data have been used in the study. Opinion survey technique has been adopted while collecting primary data. Tax experts and employees from Kathmandu valley covering sample size 120 are taken. The remuneration tax has a significant contribution on total government revenues. Remuneration tax has 2% to 20% contribution on total income tax during ten fiscal years. Highest 22% opined unfair and weak administration is found as major problem of remuneration tax. The main factor that should be initiated to increase the contribution of remuneration tax in Nepal is making tax deduction at source (TDS) effective. The other factors should be initiated to increase the contribution of remuneration tax in Nepal are, reform in the income tax policy, rules and regulation, reduction in exemption limit and increase in tax rates.

Analysis of Individual Income Tax Compliance in China from the Perspective of Behavioral Economics

As an essential theory for studying the decision-making of “actors,” behavior economics can effectively analyze the problem of individual income tax compliance from the perspective of taxpayers’ psychology, which is of great theoretical significance for improving taxpayers’ willingness to comply. From the prospect theory, endowment effect, and mental accounting, the 2018 individual income tax reform can help enhance the level of voluntary personal income tax compliance and strengthen the tax compliance level; maintaining tax publicity helps to increase habitual individual income tax compliance level, optimizing tax service helps to increase the level of cooperative individual income tax compliance. In the future, we can further optimize the design of individual income tax policies, intensify tax publicity, and improve the quality of tax services. In the future, we can further optimize the design of individual income tax policies, increase tax publicity, and improve the quality of tax services to increase individual income tax compliance.

기업의 규모에 따라 법인세가 기업투자와 근로자 임금에 미치는 영향 분석

Given empirical evidences about the effect of corporate income tax policy is mixed, we investigate whether the corporate income tax burden would affect firm’s investment and worker’s wages differently by firm size using the KISVALUE data with panel estimation model. Fixed effect estimation results show that firm’s investment tends to fall significantly as a corporate income tax burden increases. Such a negative association turns out to be greater for small-sized firms. These results support the view that the reduction in the corporate income tax burden would lower the user cost of capital, thus firm would increase investment accordingly. The same result is found for the effect on the worker’s wage. The negative effect of the corporate income tax burden on the worker’s wage appear to be greater in the small sized firms. These findings would contribute to the literature in the corporate income tax and provide relevant tax policy implications.

Implementation of Income Tax Policy on Transfer of Rights to Land and/or Buildings in the Subsidized Housing Program in Bekasi Regency (Case Study of Pt. Tata Bangun Sarana 2020)

This study is motivated by the implementation of the Income Tax Policy on the transfer of ownership rights to Land and/or Buildings in the Subsidized housing Program. The government enforces a subsidized housing program with an income tax rate of only 1% and an exemption from value-added tax (VAT) of 0%. PT. Tata Bangun Sarana is one of the developers of subsidized housing in Bekasi Regency. The purpose of this study was to analyze the implementation carried out by PT. Tata Bangun Sarana on PP Number 34 of 2016 in the payment of the Income Tax Policy on the transfer of ownership rights to Land and/or Buildings as well as adjustment efforts due to the enactment of the regulation. This study uses two data sources, the results of interviews and documentation of PT. Tata Bangun Sarana which were analyzed using qualitative methods. PT. Tata Bangun Sarana has implemented PP No. 34 of 2016 during 2020. However, in June, July, and August, PT. Tata Bangun Sarana still imposed subsidized housing selling prices in accordance with PUPR Ministerial Decree No. 242/KPTS/M/2019 for the Bekasi regency area, which was Rp. 158,000,000 which should have used PUPR Ministerial Decree Number 535 of 2020, which was Rp. 168,000,000. Another obstacle is the limited number of subsidized housing quotas provided by the government for Low-Income Communities (MBR) each year. PT. It is recommended that the Facilities Build System improve service and management in the implementation of this policy and in the future to better anticipate interrelated regulations and policies so that there will be no tax underpayments in the future.

Global Minimum Tax Implementation: Vietnam's Policy Recommendations

Applying the global minimum tax rule creates an equal tax competition environment among countries today and limits the phenomena of tax evasion, tax avoidance, transfer pricing, and profit transfer. That is inevitable in the current integration and globalization environment. According to the plan, the application of the global minimum tax rule will start from January 1, 2024 in Vietnam. On the basis of legal analysis methods, statistical methods and practical law assessment from secondary document information, the views of experts analyzing the current situation of corporate income tax policy in Vietnam. in the south, preferential policies to attract investment, opportunities and challenges when applying the global minimum tax rule and the impact on the development and improvement of tax policies for foreign investors to ensure goals of attracting investment and sustainable development. The article discusses and analyzes the various challenges that countries are facing when imposing a global minimum tax. on the following aspects: (i) neutralization of tax incentive policies; (ii) the taxing rights of the investing country; (iii) competitiveness in attracting investment; (iv) recommend solutions for the Vietnamese government in law-making and effective enforcement in the coming time. This study using normative juridical, qualitative research methods on the basis of secondary literature information has analyzed the anticipated impact of the global minimum tax policy on Vietnam and the trend of building and perfecting legal policies, human, political, infrastructure, etc. tax and plan to gradually reform and internalize international commitments in the tax field in Vietnam.

Fringe Benefits in Tax Law: Matching Principle and Tax Justice Perspective

This study addresses a significant issue within Indonesia's income tax policy, focusing on the taxation of fringe benefits and non-monetary compensations. Fringe benefits, being non-monetary rewards granted to employees, have gained prominence in various sectors' remuneration structures. The evolving landscape of in-kind taxation, encompassing natural elements, prompts inquiries into the determinants of tax imposition choices and their equity ramifications. The study aims to explore the income tax perspective on fringe benefits and non-monetary gains, emphasizing the applicability of the matching principle and its implications for equitable taxation. Despite the rising importance of fringe benefits, scholarly discourse on the alignment of conformity principles with in-kind taxes remains sparse. Therefore, this study offers a fresh contribution in comprehending this matter. Employing both a policy analysis and taxation approach, the study draws data from literature, tax statutes, and the latest economic reports. The findings underscore the significance of integrating the conformity principle in the taxation of fringe benefits and non-monetary rewards. This integration can augment the efficiency and transparency of state financial management, curbing detrimental tax avoidance practices that undercut state revenue. In summary, this study validates that adopting the conformity principle in taxing fringe benefits and non-monetary gains holds the potential to bolster state revenue and enhance fiscal management efficiency. The research's implications can guide policy makers in refining the national tax framework and fostering equitable taxation in Indonesia.

Analysis of the Effectiveness of Income Tax Policy on Trade Transactions via Electronic Systems (E-Commerce) in Efforts to Increase Tax Revenue in 2018-2020 (Case Study at KPP Pratama Jakarta Jatinegara)

According to the Association of Indonesian Internet Service Providers (APJII) in 2019-2020 internet users in Indonesia were 196.71 million people out of a total population of 266.91 million or 73.7% of the total. Along with the soaring use of the internet in Indonesia, this has created an opportunity for many people to do business through the internet (e commerce). This study aims to analyze the effectiveness of income tax policies on trade transactions through electronic systems (e-commerce), along with the inhibiting and driving factors in increasing tax revenues. The author uses the theory of Martani and Lubis (2009:55) quoted in the journal Journal of Governance vol.1. no. 2. 2021. This study uses a qualitative approach with a descriptive method. The data collection techniques used are interview, observation, and documentation methods. From the results of this study, the increase in income tax revenue on trade through electronic systems (e-commerce) cannot be said to be effective. In the realization of e-commerce tax revenue has not been realized optimally. Because not everyone understands the tax on e-commerce transactions and there is no stipulation of a mechanism from several merchants to register, this makes the data not optimally detected. This happens because the data for online business actors is incomplete, the lack of socialization provided, lack of awareness, lack of legal clarity, and efforts that can be made are to be able to carry out socialization on an ongoing basis through online and offline, collaborate with relevant stakeholders in encouraging taxpayers make a TIN, and build awareness in the scope of taxes on e-commerce transaction.

Progressive income tax and comparative advantage in trade

This study examines how a nation’s progressive personal income tax system impacts its comparative advantage in industries characterized by a large share of high-income occupations. While prior research has explored the economic consequences of income tax policies, little is known about their specific implications for a country’s competitive edge in international trade. We employ comprehensive world trade data to investigate the relationship between income tax progressiveness and industry competitiveness. Our analysis reveals that countries with more progressive income tax systems tend to exhibit comparative disadvantages in industries prominently featuring high-income occupations, including high-tech and professional services. This phenomenon can be attributed to a key mechanism: progressive income tax policies alter occupational choices by discouraging high-income pursuits, ultimately eroding the competitiveness of industries that heavily rely on these occupations. This research underscores the importance of policymakers considering the unintended consequences of income tax progressiveness on industry competitiveness in the global market.