Indirect Taxation System Research Articles

Application of Theory of Planned Behavior on Determinants of GST Compliance Behavior of GST Taxpayers: An Empirical Study from India

The Indian government has recently transformed its indirect taxation system with the adoption of Goods and Service Tax (GST) in India. However, this taxation reform has a direct impact on the compliance behavior of the taxpayer as explicated by low GST revenue of the country. Since GST is a new taxation law in India, it become pertinent to explore the compliance behavior of GST taxpayers to proffer valuable suggestions and feedback to the concerned authorities for devising appropriate policies and strategies to comprehend and control the non-compliance behavior of the GST taxpayers. Therefore, the present study analyzed the compliance behavior of GST taxpayers by synthesizing the theory of planned behavior by collecting the data from 503 GST taxpayers using snowball random sampling with the application of exploratory and confirmatory factor analysis. The collected data was analyzed using exploratory and confirmatory factor analysis to confirm the theory of planned behavior to comprehend the compliance behavior of the GST taxpayers. The findings of the study assert that the theory of planned behavior explain the 60.1% variance of the total compliance behavior of the GST taxpayers. Moreover, the findings posit that the attitude, subjective norms and perceived behavioral control have a positive impact on the compliance behavior of the GST taxpayers. The proposed instrumental scale may be applied in future research studies to comprehend the compliance behavior of GST taxpayers at national and international level and therefore, this study may have major implications for the government, academicians and policy makers for improving the compliance behavior of the GST taxpayers.

The tax policy of Ukraine within the framework of European integration processes

During the decades of integration of the domestic tax policy within the framework of integration processes, it was possible to achieve many positive results, however, the long struggle in the field of detinization of the economy, the reform of pension and insurance, land legislation, the conflict of interests in creating a favorable investment climate and protecting the interests of domestic enterprises every time indicates new vectors of further development tax policy of the state. The purpose of the paper is the analysis of the current tax policy of Ukraine within the framework of European integration processes, taking into account the influence of the state of war on the tax policy of Ukraine. The results. The tax policy of Ukraine within the framework of European integration processes is aimed at harmonizing the tax systems of EU member countries, which requires the development of mechanism for coordinating their changes, maintaining a balance of protecting national interests and implementing European taxation practices. An important aspect in this is bringing the level of taxation closer to EU requirements, in particular the expansion of the domestic property taxation base and the transformation of the indirect taxation system of Ukraine. Revision of the system and mechanism of tax benefits requires special attention, in particular, prevention of their illegal receipt and control of the effectiveness of implementation for the purpose of the domestic economy. The influence of martial law on tax policy led to a quick response to the introduction of a number of important regulatory innovations designed to reduce the fiscal burden on business and stimulate the development of small entrepreneurship. Prospects. Given the significance of the implementation of the Association Agreement with the UE, the creation of the stable regulatory and legal field is an urgent direction for the further development of Ukraine’s tax policy within the framework of European integration processes.

Impact Of GST Law With Reference To E-Commerce Industry In India

Article 366(12A) defines the Goods and Services Tax (GST) as any tax on the supply of goods, services, or both, except taxes on the delivery of alcoholic drinks for human use. In the new Article 366(26A), the word “service” means something other than “products.” Article 366(12) states that all materials, things, and articles are considered to be products. The government considers the GST to be more of a tax reform than a change to the current Indian tax system. They are evaluating all the pros and cons of the indirect taxation system. India was one of 123 countries in the world that used the Value Added Tax (VAT) system. Finance minister P. Chidambaram created plans for VAT and presented them to the Centre and the States on January 17, 2005. VAT replaced the Central Excise Tax at the national level and the Sales Tax System at the state level, which made a significant change to the tax collection process. In 2014, it was proposed that the GST be implemented in India starting from June 2016. The GST is implemented in a “double” way, with one part handled by the Centre (CGST) and another by the State (SGST). The tax base is almost the same for both the federal government and the states. On July 1, 2017, the GST was implemented in India, with three main models: (i) Central GST, (ii) State GST, and (iii) Dual GST. The E-commerce industry in India has been contributing more and more to the Indian economy. To make the most out of a mature and profitable E-commerce industry, retail E-commerce businesses need a stable indirect tax plan to address tax assessment issues they have been facing. The implementation of GST is also expected to resolve many supply chain problems that E-commerce companies have been facing, leading to faster shipping and returns and reduced administrative work. This will also help businesses and E-commerce sites improve their supply chain methods by focusing on making better storage and organizational decisions driven by cost and service.

A Critical Assessment of the Impact of GST on MSMEs in the state of Punjab

On July 1, 2017, businesses in India had experienced a paradigm shift in the indirect taxation system, which integrated a large number of Central and State taxes into a uniform Goods and Services Tax (GST) law. GST has its Impact on every business across the industries. However, the impact on small & medium businesses has been more severe as compared to large ones. Therefore, MSME’s ability to withstand this significant tax & infrastructural reform needs to be studied in the light of their small scale & lower margins. In this regard, some pertinent queries need to be answered such as, how MSME has been impacted due to introduction of GST in terms of various costs such as cost of implementation, cost of compliances, as well as the cost of non-compliances etc likewise, challenges if any posed due to the development & alignment of new software systems with GSTN, training of human resources, and issues associated with the new accounting system.The research is significant as it strives to study multiple challenges being encountered such as the implementation cost, compliance/non-compliance costs, etc. among MSMEs in the state of Punjab as well as drafting recommendations and suggesting to the government and tax authorities in Punjab so that they could raise the voice and share the concern of Punjab’s MSME in the various GST Council meeting held from time to time. It is pertinent to mention and draw councils attention to increasing costs

Фіскальна ефективність системи непрямого оподаткування в Україні

The increased riskiness of the fiscal space in Ukraine is a consequence of the generation of military-political and socio-economic challenges at the new stage of Russia's eight-year war against Ukraine. In wartime, there is the expediency of increased attention to determining the fiscal efficiency of the country's tax system in general and the indirect taxation system in particular. The article aims to assess the fiscal efficiency of indirect taxes in the years preceding the full-scale invasion of the Russian Federation on the territory of independent Ukraine. It will allow us to identify established trends, analyze the issues and develop directions for improving the indirect taxation system during the post-war recovery period. The research methodology is based on the use of generally accepted methods, in particular analytical, complex, statistical, economic-mathematical, dialectical approach, systematic and comparative analysis. Legislative and regulatory acts regulating tax activities in Ukraine, scientific publications and official statistical data served as an information base. The results: Taxes regulated by the Tax Code of Ukraine were classified according to the economic content of the object of taxation. The role of the indirect taxation system in the formation of budgetary resources of Ukraine and the EU member states was determined. Fiscal efficiency indicators of value-added tax, excise tax and customs duties were calculated. The need for more use of the fiscal potential of the indirect taxation system in Ukraine was substantiated. The key aspects of reducing the fiscal efficiency of consumption taxes have been identified. Directions for increasing the fiscal efficiency of the indirect taxation system in Ukraine were proposed.

НОВІТНІ ТЕНДЕНЦІЇ РОЗВИТКУ СИСТЕМИ НЕПРЯМОГО ОПОДАТКУВАННЯ В УКРАЇНІ

The article examines the latest trends in the development of the indirect taxation system in Ukraine. This is due to the fact that in the last few years there have been certain structural shifts in the system of indirect taxation and changes in tax legislation as a reaction to external negative shocks (the COVID-19 pandemic and full-scale military aggression against Ukraine). In view of this, the purpose of this work is to assess the latesttrends in the development of the indirect taxation system in Ukraine, taking into account the impact on the state budget revenues and the state finance system as a whole of such factors as the COVID-19 pandemic and the full-scale military aggression of the Russian Federation in Ukraine, which allows to determine the strong and weaknesses of the domestic indirect taxation system.The conducted study testifies to the significant impact of external negative shocks on the structure of tax revenues from the payment of indirect taxes. Revenue volumes have decreased significantly, despite the fact that it is indirect taxes that act as fiscal stabilizers for the public finance system. In particular, there was a trend of increasing structural disparities both in theindirect taxation system and the tax system in general.It is shown that some tax innovations related to the full-scale military aggression against Ukraine are appropriate and allowed to stabilize the situation in the economy and society. Meanwhile the results of the analysis of most of the tax reforms during martial law indicate their excessive liberalization. Some of the considered changes did not bring the desired regulatory effect, but instead created threats to the fiscal security of the state and prerequisites for abuse by non-compliant taxpayers.It was concluded that it is necessary to further increase the efficiency of the functioning of the indirect taxation system of Ukraine by improving the electronic VAT administration system and implementing the Track&Trace system for the excise tax payment control system.

АНАЛИЗ КОСВЕННОГО НАЛОГООБЛОЖЕНИЯ В РОССИЙСКОЙ ФЕДЕРАЦИИ

Currently, indirect taxes are a significant part of the tax system of almost every state. The mechanism of their collection is unified, but individual elements have specific features, based on the peculiarities of development. The article examines the theoretical aspects related to indirect taxes and fees in the taxation system of the Russian Federation, examines the socio-economic significance of indirect taxes, analyzes the role and dynamics of indirect taxes in the formation of the consolidated budget of the Russian Federation. The authors reveal current problems and suggest ways to improve the system of indirect taxation in the Russian Federation.

A Study on Consumer Awareness and Perception about GST

Taxes play a major role in any economy to fund public spending and for redistribution of wealth. Before the introduction of Goods and Services Tax (GST), there were multiple taxes charged by the Centre and states in India making the overall tax structure more complicated. To harmonize the system of indirect taxes in India, GST was implemented on 1st July 2017, replacing various indirect taxes such as VAT, custom duty, excise duty, etc. It is a comprehensive tax in which large number of central and states taxes were merged into a single tax. The main aim of GST was to reduce the double or cascading tax burden on taxpayers, making the indirect taxation system easy and transparent. The common people are affected by the GST and they have different opinion regarding its fairness. It may be possible due to different level of awareness and understanding. The purpose of this paper is to find out the degree of consumers’ awareness and perception about GST. This study uses primary data which is collected through the well structured questionnaire from the consumers belonging from different age groups. Furthermore, the study looks to examine the relationship between customer’s awareness and perception about GST.

Formation of a Sustainable Mechanism of Preferential VAT Taxation of Exports as Evidenced by the Russian Federation Practice

In this article we review the issues of applying a preferential value added tax (VAT) taxation regime on export transactions involving unlawful tax benefit claims and tax evasion. The main objective of this study is to supplement the theoretical and methodological foundations of transforming the system of indirect taxation of exports in the Russian Federation based on the analysis of legal precedents. We analyzed the foreign trade statistics for the Russian Federation and the volumes of export VAT; we also studied the court rulings in VAT-related tax disputes. Based on our analysis of the court cases, we discovered the main schemes of unlawful application of VAT preferences, such as “false exports”, introduction of additional layers of intermediaries, and use of agency services by exporting sellers. In addition, we formulated two problematic scenarios where bona fide transactions fall under the definition of such schemes. Specifically, these two scenarios include services contracts by foreign service providers that are reclassified by the tax authorities with an aim to challenge the offsetting of incoming VAT amounts and the specifics of applying VAT to transactions involving compensation-free transfer of goods to foreign legal entities. To minimize the number of tax disputes, we suggest that certain provisions of the Russian legislation are amended with more detail. The proposed innovations can positively affect international trade as they bring more easily understandable and stable conditions for the development of businesses engaged in cross-border service provisioning. At the same time, a reduction in the number of disputes based on the tax authorities’ subjective opinion of taxpayers’ activities would allow the tax authorities to concentrate on clearer and more objective criteria of tax compliance by Russian companies, thus simplifying tax administration in one of the domains of tax law.

Trends in affordability of tobacco products before and after the transition to GST in India

ObjectiveTo estimate the trends in affordability of bidis, cigarettes and smokeless tobacco (SLT) in India and examine the impact of transition from the earlier indirect taxation system to the new...

Фіскальна ефективність акцизного податку як складова оптимізації системи непрямого оподаткування

The excise taxes contain a hidden reserve for raising funds for the state budget. Therefore, in the case of ensuring their high fiscal efficiency, they can serve as a significant resource for filling the revenue side of the country's budget. The purpose of the article is to analyze the dynamics and structure of excise tax receipts to the State Budget of Ukraine, to determine the main indicators that can be used to assess the fiscal efficiency of the excise tax. The information base for the study was the official data of the State Statistics Service of Ukraine, reports of the State Treasury Service on the implementation of the State budget, data from the Ministry of Energy and Coal Industry of Ukraine. The analysis of the structure and dynamics of the excise tax transferred to the state budget for the period 2014-2019 was carried out. Indicators that characterize the fiscal significance of the excise tax as part of the state budget revenues were determined. The tendencies revealed by the author of a decrease in the fiscal significance of the excise tax are, first of all, a consequence of the insufficient efficiency of administration of this tax, which follows from the imperfection of the current legislation and the ignorance of some potential sources of excise taxation. Based on the data of the State Fiscal Service and the Ministry of Energy and Coal Industry of Ukraine on the production of thermal coal in the period 2017-2019, an assessment of the potentially lost revenues of the state budget was made. These revenues would become possible with the introduction of an excise tax on thermal coal. In the context of optimizing the system of indirect taxation, it was determined that an increase in the current rates of excise tax on excisable goods will not give a tangible effect in the medium term, but will lead to an increase in the level of “shadow” (illegal) production, sale and movement of excisable goods across the customs border of Ukraine. Therefore, the legislature should pay attention to those groups of goods that are in a state monopoly, and their taxation can give significant additional funds to the state budget.

Impact of goods and services tax on Indian economy

Goods and services tax is nothing new, but a well desired value added tax that covers both goods and services. Goods services tax is a tax that is levied on the valve added to a purchased supply before it is sold again. Goods and services tax is defined as the giant indirect tax structure designed to support and enhance the economic growth o f the country. Goods and services was based on the nation ‘one nation, one market, one tax’. Goods and services tax would change the current tax regime of production based taxation to a consumption based system. Goods and services Tax (GST) is essentially a tax only on valve of addition at each stage. GST will be on the transaction value, i.e. taxes will be levied on the price actually paid or payable. Hence, resulting in the contribution of making the Indian economy stronger and powerful. GST is proposed system of indirect taxation in India merging most of the existing taxes into single system of taxation. The main purpose of this paper is to study Impact of Goods and Services Tax on Indian economy. This research paper highlights the positive and negative impact of the GST in the Indian tax system. This study was done based on secondary data collected from multiple sources of evidence, in addition to books journals websites and newspapers.

Improvement of fiscal efficiency of indirect taxes in Ukraine

The object of research is the system of indirect taxation, in particular, the mechanisms of administration of indirect taxes. One of the most problematic places is the lack of efficiency of such taxes, affecting the volume of revenues to the Consolidated Budget of Ukraine.Statistical and economic methods are used to assess the fiscal value of indirect consumption taxes in the structure of budget revenues. The analytical method is used when considering the status of indirect taxes for the reporting period (2014–2018), which gave a complete picture of the amount of budget revenues. The main shortcomings of the system of taxation of indirect taxes are identified and substantiated, the most important of which are: reduction of the fiscal sufficiency of the value added tax (VAT) and the imperfection of the system of administration of indirect taxes. Based on the method of comparing the experience of various countries, the main ways of improving tax administration in Ukraine have been formed.As a research result, it is found that VAT is the main one in terms of budget formation. Its share reached the highest level in 2018 (75.1 %). This is due to the fact that since 2016, a 7 % rate on medicines has been introduced. The second in fiscal efficiency is the excise tax, which tended to increase from 22.9 % in 2014 to 24.3 % in 2017. The third indirect tax is the duty: its share in 2014 was 6.4 %, decreasing to 4.7 % in 2018Thanks to the research, it is established that the level of fulfillment of indirect taxes in Ukraine did not meet the planned indicators. This demonstrates the need to improve the functioning of the tax system. This result can be achieved by reducing the list of preferential VAT transactions and improving the customs legislation of Ukraine in accordance with international standards. The use of foreign experience in the regulation of Ukrainian indirect taxation will contribute to the stabilization of economic growth and the gradual integration of the state into the European community.

Proposed Goods and Services Tax in India: A Rosy Beginning or Are There Thorns Too?

Goods and Service Tax (GST), hailed as the most revolutionary indirect tax reform in India, aims to bring about the unification of market economy while grappling with the issues of fiscal federalism and multiple levy of taxes. The present article specifically underscores the most vexatious issues of the proposed GST framework and scrutinises the same in the backdrop of the prevailing indirect taxation system. The authors are of the view that though GST is a courageous effort on part of the Government, it faces certain legal impediments highlighted in the article.

GST: A Perceptual Study Among the Tax Professionals

In the present study an attempt was made to explore the level of GST literacy among the tax professionals to gauge the preparedness of the tax professionals, to identify the reasons of non-implementation of GST in India in the opinion of the tax professionals in India and to evaluate the implications of the GST on Indian Economy. The study revealed that there is adequate GST literacy amongst the tax professionals. The result of the study showed that GST is a better indirect taxation system and most of the business houses want GST to be implemented as soon as possible. The respondents have opined strongly that GST implementation will have multiple benefits to our economy by positively affecting the economic growth, share market. But in most of the occasions the respondents felt that implementation of GST is difficult in India due to the political unwillingness, bureaucratic delay and the failure of the past and present Government to take the opposition in to confidence.

The Progressivee Goods and Services Tax (GST) (Fiscal Policy) as a Tool of Inflation Targeting?

This paper is divided into two parts: - Parts I and II. Part I of this paper addresses whether a valid analogy can be drawn between ‘Business Activity Statements’ as evident in the Australian Goods and Services Tax system (GST) and ‘VAT/GST tax returns’ (as a developing concept) effectively making the value added tax (VAT) systems across the approximately 145 countries throughout the World that have a VAT including that of Australia a progressive rather than a regressive taxation system with significant ‘tax and macroeconomic’ benefits to the countries that adopt such a system. This would effectively be achieved by extending the concept of a GST tax invoice as an analogy to a VAT/GST tax return for individuals and/or families. By developing such an analogy it is hypothesised that by multiplying the GST tax invoice - with a GST rate of 10% (as evident here in Australia) - by 0%, 10%, 20%, 30%, 40%, 50% and even maybe 60% or on the basis of any other numerical figure, logic and the Suits Index that the once thought of regressive VAT/GST throughout the 145 countries would thus become progressive in nature. The VAT/GST tax return would allow for the individual and/or the family situation and thus apply progressive rates in terms of ability to pay (premised upon assessable income or taxable income) to that tax base (expenditure) thus achieving progressivity in the indirect taxation system. The paper will also look at (generally) the following tax policy issues in assessing the progressive VAT: 1. Fairness or Equity 2. Simplicity 3. Efficiency/Neutrality 4. Suitability for Achieving Macro-Level Objectives A viable solution to the regressive-progressive VAT/GST debate both here in Australia and abroad? Part II of the paper however will also propose a cost of living allowance tax credit or rebate (both expenditure and savings based) funded through the progressive VAT/GST potentially allowing for the overcoming of the costs, consequences and effects of inflation. This part of the paper will also extend the purchasing power of the dollar price index (salaries and wages) and will thus prove through a simple mathematical representation as to how the expenditure based cost of living allowance tax credit can allow for the maintenance of the purchasing power of income (ie, salaries and wages) as an initial illustrative example of the macroeconomic benefits that may potentially be achieved through the cost of living allowance expenditure based tax credit or rebate. This part of the paper will also attempt a resolution to the Fisher equation. The Fisher equation relates interest rates to inflation. The paper will by proposing a cost of living allowance tax credit (savings based) also funded through the progressive VAT/GST may allow for a solution to the Fisher equation. Thus through a simple mathematical representation I will attempt to prove the above. A viable solution to the costs, consequences and effects of inflation?

Characteristics of Value Added Tax in Bosnia and Herzegovina

In every national economy primary role of the fiscal system is to provide public revenue to finance public needs. In addition, fiscal system has also the task to achieve appropriate economic goals such as export promotion, investment growth, and development of SME. Taxes represent one of the most important instruments for achievement of these goals. Introduction of Value Added Tax in Bosnia and Herzegovina has caused slight inflation on the one hand, while on the other hand has helped increase export, increase collection of tax revenues, regulate economic area creating more favorable legal and economic environment, which improved the basis for further economic development. Indirect Taxation System of Bosnia and Herzegovina has conducted successful introduction of new tax system, which replaced sales tax applicable at that time. This step was rated as one of the key steps for the establishment of single economic area, reduction of the grey economy, and promotion of foreign investments and reduction of the foreign trade deficit. First part of this paper analyzes the concept of value added tax, followed by short history of origin of this form of tax. Further we elaborate basic characteristics of Value Added Tax in Bosnia and Herzegovina, explaining in more details the essence of the term VAT, types of VAT rates, as well as the influence of this measure of fiscal policy to the economic growth and development of Bosnia and Herzegovina. We will overview all the advantages and disadvantages of single VAT rate being applied in our Country. DOI: 10.5901/mjss.2015.v6n2s2p79

Colombia's indirect taxation system: slowly moving in the right direction

Colombia's indirect taxation system: slowly moving in the right direction

GST in India: A Big Leap in the Indirect Taxation System

The replacement of the Central excise duty of the government of India by Central Value Added Tax (CENVAT) and sales tax system of the State governments by the VAT marked a major mile stone in the reform process of indirect taxes in India. It addressed the cascading effect under the erstwhile system by giving set-off for tax paid on inputs as well as tax paid on previous purchases and resulted in a major simplification of the rate structure and broadening of the tax base. But both the CENVAT and the State VAT have certain incompleteness. Though a number of initiatives by the various machineries at the Centre, the present taxation regime is marked as cumbersome, complicated and unfriendly. It is in this perspective, the Central government has entrusted Dr.Vijay Kelkar, Chairman of 13th Finance Commission to suggest a rational, scientific and modern but unified system of taxation in tune with developed nations form the base behind the introduction of Goods and Service Tax (GST) in India. Although there are many hurdles to be crossed before the implementation of GST the Central government reiterated its commitment towards the adoption of a 'flawless' GST for the survival of the India's economy in the face of increasing international competition consequent to globalization and liberalisation. Despite the various impediments to the proposed transition, until the time GST is implemented, it would be worthwhile to assess its positive impacts on the various development areas viz. agriculture, manufacturing industry, MSME, housing, poverty reduction, employment, price level, EXIM trade, GDP, government revenue, etc. and this aspect is the subject matter of this paper.

GST A New Tax Reforms in India- Implementing Towards Sustainable Development of the Economy

A developing economy like India necessities sufficient resources to finance the developmental activities that are comprehensively and achieves all levels of the society. Presently, the tax structure of Our country is very complex. To overcome these complexities of our taxation system, the government constantly changing the taxation system to rationalize tax administration and generate more revenues for social protection, infrastructure, and several other activities. That's the main reason, the government to implement or move towards the GST is an indicator of our evolved taxation system. After passing of the 101st Constitutional Amendment (GST) Act, the highly-anticipated tax products GST appears to be an actuality in 2017. To ensure a smooth transition, government and all related nodal agencies like Goods and Services Tax Council, GSTN etc., have been regularly making a decision to resolve the problems encountered being at different levels. To simplify the difficulties faced by indirect taxation system and create a common taxation system throughout the nation and decreasing the barriers between states, the dual structure Goods and Service Tax (GST) was passed by parliament. In 6th May 2015 at Lok Sabha and 12th May 2015 at Rajya Sabha passes constitutional amendment bill for GST and in 3rd August 2016 Rajya Sabha passes the constitutional GST bill by a two-thirds majority after more than a year. Now the government of India is committed to replacing the existing indirect taxation system levied on goods and service by both state and center and implemented by GST. It was formally launched by the President of India and Prime Minister of India at a formal function in the Central Hall of Parliament on 1st July 2017. GST will cover all the aspects of the existing indirect tax system like excise duties, customs duties, Local Body Tax (Entry Tax/Octroi), services tax, Sales tax/VAT etc. to reduce their tax burden and help the government in the uniformity, efficiency, and transparency of the taxation system in India and removal of cascading effect of taxation. This system has a uniform rate of tax for all the states. This paper is designed specifically to provide an in-depth knowledge of GST and what challenges the economy faces in implementing the GST at this time in a very practical and streamlined manner. The current study is an exploratory and descriptive research based on secondary data from different sources like GST Act, books, article, magazines etc.