Indirect Taxes Research Articles

Carbon taxation in Europe

The subject of the study is the carbon tax legislations of European countries.The purpose of the article is to identify the general consistent patterns of carbon taxation in a number of European countries: the United Kingdom, the Netherlands, Norway, France, Sweden and Switzerland.The methodology of the research includes the analysis of the provisions of the carbon taxing legislation of these countries.The main results, scope of application. The analysis shows that the structure of the carbon tax in European countries has differences, but the predominant form of taxation is an excise tax on fuel. In Sweden and Switzerland the excise rate is in direct proportion to the carbon content of the fuel, however in the UK, Norway and France excise rates are set more voluntary. Each country countries grant exemptions for specific fuel uses and industries that they deem essential to protect from the exceeding tax burden. In the Netherlands, Norway and France, carbon/energy taxation is applied in addition to the emissions trading system. In all these countries, this is motivated by the evaluation of the latter as insufficient to attain the objectives of diminishing CO2 emissions. Based on the experience of these countries, there is no prevalent model for the arrangement of carbon / energy taxation. For instance, France imposes an energy tax as an excise tax, that is, a consumption tax. The UK levies excise taxes on the consumption of natural gas, LNG, coal and electricity, correlated to the amount of energy contained in these fuel products. Norway applies both an excise and an indirect output tax in the oil sector. In the Netherlands, a carbon tax is levied on actual CO2 emissions (as far as they are accounted for under the EU ETS), but this tax only applies to ETS participants and only if the ETS prices are below the established level. Despite the high tax rates (up to 120 euros per ton of CO2 in Sweden and Switzerland), the significance of the carbon tax for the economies of the considered countries is low due to both low energy consumption and the high proportion of carbon-neutral energy sources such as hydroelectric, nuclear and biofuel.Conclusions. An analysis of the provisions of the carbon taxing legislations of various European countries revealed that these countries adopt such carbon tax schemes that optimize their administrative feasibility, public acceptability, and economic impact mitigation for vital sectors. At the same time, in the majority of countries, the carbon tax is implemented as an excise tax on fuel.

A Study on Goods and Services Tax (GST)

The Goods and Services Tax (GST) is a type of indirect tax that has replaced various other indirect taxes in many countries, including India. It is designed to simplify the tax structure and make it more transparent. Instead of multiple taxes at different stages of production and distribution, GST consolidates them into a single tax at the point of consumption Goods and Services Tax is an indirect tax to support and enhance the economic growth of the country. Most of the Developed countries have implemented Goods and Services Tax Bill (GST). However, in India, GST was established in 1999. A committee was set up to design the model of GST. But GST was re-launched on 1 July 2017 by the Indian government. There was a big hue and cry for its implementation. The GST replaced all the multiple taxes which were taken by state and central government. That is why it is said One Nation One Tax which means there is no need to pay any other tax in all over the country. The study systematically reviews the impact of GST in India. The study provides the bibliometric visualization and sentiment analysis of Goods and Services Tax (GST). It was found that the government’s motive of GST was to bring all the citizens of the nation under the tax and to prevent the flow of black money. But it was observed that lots of Indian citizens’ sentiments were in a dilemma. So it is recommended to revisit the structure and keep a scope of continuous improvement Key Words: GST, Goods and Services Tax (GST), Tax, Goods and Services Tax Bill, Sentiment Analysis

Review Paper- “FINANCIAL ASPECT’S RELATED TO GST & TAX PROCEDURE IN SANTOSH BAKSHETTI’S CONSULTING FIRM”

While direct taxes are levied on taxable income earned by individuals and corporate entities, the burden to deposit taxes is on the assesses themselves. On the other hand, indirect taxes are levied on the sale and provision of goods and services respectively and the burden to collect and deposit taxes is on the sellers instead of the assesses directly. The GST Act came into existence, leading to the realization of “One country, one tax”. It is a centralized tax- paying network which simplifies payment of tax by the citizens as well as revenue collection by the government. It widens the tax base. Introduction of GST aims to alleviate, though not all, many of the problems leading to efficiency in operations for individuals leading to economic growth of the country. A direct tax is a tax that a person or organization pays directly to the entity that imposed it. An individual taxpayer, for example, pays direct taxes to the government for various purposes, including income tax, real property tax, personal property tax, or taxes on assets. An Income Tax Return (ITR) is a document you file with the Internal Revenue Service or the state tax board reporting your income, profits and losses of your business and other deductions as well as details about your tax refund or tax liability. Taxable income is the portion of a person's or company's gross income that the government deems subject to taxes. The computation of taxable income is done adding all the incomes that an individual can get (Income from salary, house property, capital gains, business/profession and other sources) and subtracting the deductions from it will give us the net taxable income. Keywords – TAXATION, GST, DIRECT TAXES, INDIRECT TAX, TAX COMPLIANCE, CAPITAL GAINS

An Exploration of the Driving Factors Behind Trade Protectionism

Given the thought experiment of David Friedman questioning the legitimacy of protectionism of international trade, this paper provides several determining factors contributing to protectionism in different dimensions: the profusion of infant industries lack the capability of achieving economics of scale, failing to compete directly with foreign mature sectors; indirect tax revenue like tariff could provide an extra fund for local government, and salvage of declining industries guarantees employment rate; and imposing protection policies could also be deems as unavoidable strategy when there is a politic competition. Overall, this paper outlines different logic reasonings behind the imposition of international trade protectionism policy. It is concluded that even though imposing international trade protectionist policy has detrimental impacts on both sides, there are still a bunch of ones exist served for political purposes other than economic considerations in the forms of trade war, high tariffs and certain quota , science and technology sanctions, etc.

The impact of petrol and diesel oil taxes in EU member states on CO2 emissions from passenger cars

The article aims to explain road CO2 emissions, including passenger car emissions in the EU member states, with the rates of indirect taxes (except VAT) for petrol and diesel oil. Apart from tax rates, the analysis includes some selected variables concerning economies and transport infrastructure, which impact CO2 car emissions. Compared to the existing literature, we focus on emissions from passenger cars and analyse more countries over a more extended period using more updated data. Our findings confirm that fuel taxes have a generally negative but limited impact on emissions from passenger cars. This impact is independent of whether we relate emissions to the number of inhabitants or GDP and is generally stronger in EU member states with higher taxes. In many countries, the economic affordability of fuels has significantly increased over the last few years. This phenomenon is another argument for a more active tax policy, i.e., general adjustment of the tax rates in line with inflation. There is also great importance for those adjustments in times of high fuel prices when governments are under tremendous pressure not only to stop tax increases but to reduce them, which was the case in 2022 after the Russian aggression on Ukraine.

Do companies financially withstand sweeping tax reform?

Tax reform aims to transform how a nation collects or manages taxes. It is frequently conducted to enhance tax administration or to bring economic advantages. Goods and Service Tax (GST) is an indirect tax that replaced many indirect taxes in several nations in the world. Likewise, GST implementation in India was considered positive for the government and the economy. However, its impact on the corporate sector needs to be investigated more. In this study, we investigated the impact of GST on the financials of Indian companies, especially profitability, liquidity, and their relationship. Financial data from 123 companies for ten years (2013 to 2017 — pre-GST; 2018 to 2022 — post-GST) were analyzed using panel regression methods. The parameters examined are operating profit, return on assets, and working capital. The analysis shows that the companies’ operating profit increased after GST implementation, whereas the return on assets decreased. Further, working capital requirements increased after the GST implementation. The impact of GST on operating profits did not significantly differ across sectors. Nevertheless, sectors like metals and mining, information technology (IT), oil and gas, and reality significantly improved return on assets and decreased working capital after GST implementation. The results are helpful to researchers and policymakers considering the differential impact of GST across sectors and thereby ascertain the ability of corporations to financially withstand tax reforms.

ОСОБЛИВОСТІ ВПЛИВУ НЕПРЯМОГО ОПОДАТКУВАННЯ НА ФІНАНСОВО-ГОСПОДАРСЬКУ ДІЯЛЬНІСТЬ ПІДПРИЄМСТВА ФАРМАЦЕВТИЧНОЇ ГАЛУЗІ

Indirect taxes are one of the sources of state budget revenues. Value added tax is the basis of modern taxation systems around the world, including the EU and the UK. Since VAT is probably the most cost-effective way for countries to generate significant tax revenues, the issues of its calculation, collection, refund, and administration remain up-to-date and relevant. The pharmaceutical industry is one of the most difficult to forecast demand for goods, as new medicines are constantly being registered and launched, methods and approaches to treating diseases are changing, and the size and structure of the population is changing. Procurement of pharmacy goods always involves significant costs. Most pharmacy products are not in daily demand, but must be available to meet the needs of patients at any time. Ensuring access to medicines for citizens is an important function of a modern rule-of-law democratic state and a key element of social policy. One of the methods to facilitate access to medicines is to reduce their price, provide benefits, and partially or fully fund them by the state, especially for life-saving medicines. In most countries, there is a practice of mixed pricing for medicines. This paper focuses on optimizing the procurement schedule, analyzing trends in drug sales and indirect taxation by pharmaceutical companies. The article highlights the importance of indirect taxation for both state budget revenues and tax planning of business entities in Ukraine and European countries. To operate effectively, enterprises need to analyze the tax burden. Tax planning is a complex process based on a systematic approach to tax management using various economic and financial methods. The tax management system should be based on three subsystems: tax planning, tax regulation and tax control. In order to optimize the financial position of an enterprise, an important factor is the optimization of procurement, organization of the outflow of goods and forecasting of VAT payment. The article proposes to improve approaches to the use of VAT peculiarities of pharmacy goods on the example of a pharmaceutical distributor with a view to optimizing the procurement schedule, sales trends and payment of indirect taxes.

GST and Indirect Taxes

GST and Indirect Taxes

Benchmarking India's GST for Reforming Ethiopia's Indirect Tax System: A Literature Review

This study examines the feasibility of adopting the One Tax One nation model of Indian Goods and Services Tax (GST) framework as a reform tool for Ethiopia's indirect tax system. The study used a Literature Review technique, through identifying and retrieving relevant research papers from the Scopus database and google scholar search engine. "Indian GST" (Goods and Service Tax), "Tax system in Ethiopia," and "Tax revenue growth" were the search terms used in the database during the investigation. Results indicate that India's GST is a workable benchmark for Ethiopia's indirect tax reform if applied appropriately to the Ethiopian context. This study is an essential resource for policymakers, tax authorities, and academics, providing strategic insights for navigating the dynamics of GST in today's digital age.

Studying Social Justice of Taxes in Legal system of Afghanistan

Tax justice is very important to the legitimacy of the tax system in Afghanistan. On the one hand, any taxes cannot be derived from the people without a legal basis, and on the other hand, the taxes should be fair and reasonable. Regarding taxes in Afghanistan, it seems that in some cases, the taxes consisting of direct and indirect taxes are not justifiable. The very major examples are the VAT (Value Added Tax), the tax on credit cards, and some tax on income in the legal system of Afghanistan. During determining tax, the tax authorities should evaluate the life and characteristics of taxpayers to determine whether they have the ability to pay tax or not. These are the concerns regarding the social justice of taxes. So, we are trying to find the response to this question: Is social justice respected and observed in the tax legal system of Afghanistan? No doubt, in some cases, the taxes in Afghanistan are not rightful. The economic conditions of people are not equal. Most people in Afghanistan are very poor. As a result, tax authorities should assess people's living conditions. In addition, the government should codify fair taxes for the people. The method of the research will be descriptive and analytical. The method of collecting data is librarianship. We reviewed books, articles, magazines, and the national laws of Afghanistan

Tale of a Missed Opportunity: Japan’s Delay in Implementing a Value-Added Tax

AbstractWhile a value-added tax (VAT), which supports a welfare state, was officially introduced in Japan in 1989, earlier attempts to implement this tax system failed. This study looks in-depth at why Japan was slower than other countries to implement a VAT. The tax authorities’ debates during the 1960s and 1970s are reviewed to understand why other attempts to introduce a VAT failed. Implementing the VAT would require a shift from the ideology centering on a direct tax to acceptance of indirect taxes and justification for a general consumption tax’s superiority over specific consumption taxes. Four influential factors are identified. First, in 1960, the ideology centering on a direct tax made a VAT inherently inferior. Second, in the 1968, “Break Fiscal Rigidification Campaign” created a revenue-neutral path for indirect tax increases but favored specific consumption taxes. Third, the Fundamental Issues Subcommittee conceptualized “high benefit/high cost” in the early 1970s and established the VAT’s superiority over specific consumption taxes based on a study of overseas travel to European Commission countries. However, the VAT was abandoned due to external shocks. Fourth, the attempts to link the VAT with fiscal reconstruction in the late 1970s faced strong opposition from consumers, small businesses, and the ruling party. Failure to introduce the VAT in the 1970s eliminated the possibility of using it to raise taxes in the early 1980s. The findings reveal that Japan’s failure to introduce the VAT closed a door to a “high benefit/high cost” type of Western-style welfare state.

Government responses to oilfield discoveries: Impact of resource wealth on non-resource tax revenues

It has often been argued that countries that produce natural resources mobilize less non-resource tax revenues than other countries. In this paper, we exploit the exogenous variation in the timing of giant oilfield discoveries to estimate the causal impact of natural resources on taxation. The timing of giant oilfield discoveries is arguably exogenous and thus renders them appealing to empirically examine this argument. This allows us to examine the performance of non-resource tax revenue effort before and immediately after discovery as well as the period corresponding to the inflow of revenues from the production. We find that non-resource tax revenues tend to increase in the period following the discovery before the onset of production and after production commences. This effect is due to an increase in non-resource indirect tax revenues. Further analysis shows that both the total and indirect non-resource tax revenues, experience an increase in only low- -middle income countries, and largely driven by an increase in the consumption of goods and services.

AWARENESS AND SATISFACTION LEVEL OF GST AMONG RETAILERS

The Goods and Service Tax (GST), the biggest reform in India’s indirect tax structure since the economy began to be opened up 25 years ago at last looks set to become a reality. The Constitution Amendment Bill finally got the nod of Rajya Sabha. The government successfully stitched together a political consensus on the GST Bill to pave the way for the much-awaited rollout of the landmark tax reform that will create a common market of 1.25 billion people. GST will be a game-changing reform for the Indian economy by developing a common Indian market and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax structure, Tax incidence, and Tax computation. Tax payment, Compliance, Credit utilization, and reporting led to a complete overhaul of the current indirect tax system. Law provides for a period that may extend to five years, based on the recommendations of the GST Council. Here, every taxpayer will be issued a 15-digit common Identification Number which will be called a “Goods and Service Identification Number” (GSTIN) a pan-based number. GST is a consumption-based tax levied on the sale, manufacturing, and consumption of goods and services at the national level. Many taxes have been subsumed under the GST Act.

Direct and Indirect Taxes in Pollution Dynamics

Direct and Indirect Taxes in Pollution Dynamics

IMPACT OF TAX ON INVESTMENTS IN CAPITAL MARKETS IN INDIA

With an emphasis on tax laws, investor behaviour, market dynamics, and economic consequences, this research looks at how taxes affect capital market investments in India. It looks into how taxes affect investment choices and market efficiency by examining the tax system, which includes direct and indirect taxes, as well as the taxation of different financial instruments like debt, equities, mutual funds, and derivatives. We examine the impact of major tax reforms on investor behaviour and economic growth, including the adoption of the Goods and Services Tax (GST), income tax rationalisation, and capital gains tax modifications. Historical viewpoints provide information about the development of tax policy. The report emphasises how important tax changes are for stimulating economic growth, solving issues like tax evasion, and boosting investor trust in India's financial markets

Застосування теорії змін в екологізації бізнесу

The article summarizes scientific approaches to the development of the theory of changes in the greening of business. The scientific and methodological approaches to understanding the basics of the theory of change have been developed. The features of the application of the theory of change in the greening of business are presented. The specifics of the development of the theory of changes in the greening of business on the example of Ukraine are revealed. It is determined that for the Ukrainian realities, the greening of business is implemented mainly in the formal plane in the context of compliance with the norms and standards of environmental development, ensuring environmental taxation, control of environmental pollution standards, which slows down the development of the component of the Ukrainian environmental business and hinders the innovative introduction of elements of the ecological paradigm in our country. The theory of change is a rigorous but necessary process by which groups and stakeholders in planning activities formulate their long-term goals and define the conditions that they believe should precede the achievement of these goals. These conditions are modeled as desired outcomes, organized graphically in a causal structure. Change theory describes the types of interventions (a single program or a coordinated initiative) that lead to the outcomes depicted in the outcome map. Each intervention is linked to an outcome in a causal system, revealing the often complex web of actions required to bring about change. Several factors have been found to make it difficult for multinational companies to take action against climate change, such as a lack of certainty about climate policy, a lack of green technologies, and a lack of return on investment. The use of green practices also remains limited in the International Health Standards (IHR) in both developed and developing countries, due to limited access to finance and skills, lack of information and knowledge about innovation, and, in some cases, poor enforcement of rules. It is determined that for a better and more effective application of the norms and provisions of the theory of changes in the greening of business, it is relevant to introduce professional courses for managers and environmental managers of companies, which will direct the professional training of management staff to the implementation of effective environmental changes in business. It is also relevant to introduce the State-based programs to stimulate the development of greening business in terms of indirect (tax incentives for businesses that implement environmental innovations) and direct incentives for the implementation of environmental changes (preferential lending for greening business).

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.

Modern Tax Trends and Economic Growth in a Turbulent World: Insights from Developed and Developing Economies

The article examines recent trends in tax level and structure changes within developed and developing economies in relation to economic growth. The study’s significance stems from increasing geo-economic turbulence and emerging risks in the global economy, necessitating fiscal regulation. The analysis spans the period from 2009, post the Great Recession, to the present day. We tested the hypothesis that discernible patterns could be identified through statistical analysis regarding the relationship between tax indicators (level and structure) and economic growth indicators. However, no such clear patterns were found. In essence, it cannot be definitively concluded that reduced tax levels and/or increased indirect tax shares do explicitly foster national economic growth. Tax impact on economic growth varies significantly across developed and developing economies, presenting a complex and nuanced picture. The nature and strength of this influence are largely shaped by the specific circumstances of each location and period. In order to identify their unique impact, counterfactual analysis is required. In the course of further research, it is important to consider, firstly, the increased fiscal activism of the post-pandemic period: in this case, the research outcomes may be different from those obtained for the period already examined. Secondly, considering the ongoing processes of geo-economic fragmentation, it is recommended to re-examine the influence of taxes on economic processes. This investigation should adhere to the evolving framework of new macro-regions worldwide, rather than the conventional dichotomy of developed and developing economies. Participants within these macro-regions, interconnected through supply and value chains, will need to work together to align their tax rules and policies for mutual benefits.

Tax Reforms in Bangladesh: An Overview

In both industrialized and emerging nations, tax reform is a subject that requires ongoing attention. This topic is discussed in terms of creating a suitable tax base, bolstering tax administrations, and guaranteeing equity, efficiency, and progressive taxation. Throughout the past forty years, Bangladesh has implemented numerous reform measures. Since there isn't much research on business matters related to these initiatives in the context of Bangladesh, this study aims to review those initiatives by emphasizing them. This study uses strategies for conducting interviews as well as content and document analysis. According to the study, the results of those reforms are not all that positive. While there are still notable shortcomings in enforcement, audit, and compliance, there are also some notable successes, such as the creation of the Large Taxpayers Unit (LTU) and Central Intelligence Cell (CIC) and the digitization of the tax process. The revenue implications of tax reforms indicate a somewhat improving trend in both direct and indirect tax collection, with extremely gradual progress being seen in the overall tax-to-GDP ratio. It would be wise to investigate incentive programs to recognize prompt compliance and commend tax officers for their achievements. Since there hasn't been a thorough reform attempt in the corporation taxes space in almost ten years, we urge the launch of a new, comprehensive reform initiative that addresses all of the impending issues. Designing of tax policy that promises professional administration and induces adequate compliance remains a major challenge for public finance in developing countries.

Impact of GST on MSMEs: A Critical Assessment of Rajasthan State

Goods and Services Tax (GST) 2017 implement in India with the vision of simple indirect tax structure and enhance economic growth. However, its impact on micro, small and medium enterprises (MSMEs) has been a topic of concern. This critical assessment study focuses on the impact of GST on MSMEs in Rajasthan State (Pareek & Sharma, 2019). The study adopts a mixed-method approach, including a survey of 200 MSMEs and in-depth interviews with 20 industry experts and government officials. The study found that the implementation of GST has resulted in several benefits for MSMEs, such as simplification of tax procedures, increased efficiency in logistics and reduced corruption. However, MSMEs have also faced several challenges such as increased compliance costs, a lack of awareness about GST and issues related to the availability of input tax credit. Indian government must take proactive measures to educate MSMEs about the GST and simplify compliance procedures (Antonyraj & Kumar, 2023). It also recommends that policymakers should revisit the GST structure to make it more MSME-friendly. Overall, this study provides insights into the impact of GST on MSMEs and highlights the need for ongoing assessment and policy reform to ensure the long-term sustainability of these enterprises (Choudhary, 2019).