Tax Measures Research Articles

Reducing Sugar Intake in South Africa: Learnings from a Multilevel Policy Analysis on Diet and Noncommunicable Disease Prevention.

High sugar intake contributes to diet-related excess weight and obesity and is a key determinant for noncommunicable diseases (NCDs) in low- and middle-income countries (LMICs). The World Health Organization (WHO) gives specific advice on limiting sugar intake in adults and children. Yet, to what extent have policy ideas on sugar intake reduction originating at the global level found expression at lower levels of policymaking? A systematic policy document analysis identified policies issued at the African regional, South African national and Western Cape provincial levels between 2000 and 2020 using search terms related to sugar, sugar-sweetened beverages (SSBs), and NCDs. Forty-eight policy documents were included in the review, most were global and national policies and thus the focus of analysis. A policy transfer conceptual framework was applied. Global recommendations for effectively tackling unhealthy diets and NCDs advise implementing a mix of cost-effective policy options that employ a multisectoral approach. South African country-level policy action has followed the explicit global guidance, and ideas on reducing sugar intake have found expression in sectors outside of health, to a limited extent. As proposed in this paper, with the adoption of the SSB health tax and other policy measures, South Africa’s experience offers several learnings for other LMICs.

Country Note: Retroactive Taxation, Investor-State Dispute Settlement, and India: Life Comes a Full Circle

After amending the Income Tax Act (IT Act) in 2012 to impose taxes retroactively on indirect transfers involving non-residents, India recently nullified this law. Towards the end of 2020, two investor-state dispute settlement (ISDS) tribunals under the India-Netherlands and India- United Kingdom bilateral investment treaties (BITs) found India’s retroactive tax in breach of India’s BIT obligations. These arbitral defeats incited India to eliminate the infamous 2012 retroactive amendment to the tax laws. This article documents and analyses the sordid saga of nine long years by explaining the origin, evolution, and culmination of India’s retroactive tax misadventure. Considering the increasing number of instances for which foreign investors use the ISDS mechanism to challenge the host state’s sovereign taxation measures as BIT breaches, the ISDS rulings against India, especially by the tribunal in Cairn Energy v. India, assumes significance. A more comprehensive reading of the tribunal’s reasoning in Cairn Energy v. India elucidates that, while taxation measures are indeed an integral part of the state’s sovereign right to regulate, it has to be exercised reasonably and proportionately when furthering a public purpose. The exploitation of the power to tax disproportionately may prove to be detrimental to the state. India, retroactive tax, ISDS, BIT, Vodafone, Cairn

Article: Abuse of Law by a Member State When Designing a Tax Measure

When Member States design tax measures, they have to comply with EU law. In this article the question is discussed whether a Member State has the liberty to intentionally design a domestic rule so that it falls outside the scope of the freedom of capital and prevent scrutiny in respect of third states by the Court of Justice of the European Union (CJEU). This question is investigated by using two Dutch rules as a case study. The author argues that the legislature walks a thin line. On the one hand there is a risk that the legislature is circumventing the application of the fundamental freedoms in an abusive way while on the other hand using an arbitrary criterion in a rule to distinguish between comparable cases could lead to the conclusion that a Member State has implemented a selective tax measure and thus granted state aid. The author concludes that the Dutch liquidation loss rule infringes EU law. Abuse of law, Liquidation loss, Withholding tax, State aid, Sincere cooperation, Freedom of capital

Pillar Two – What Actions Should Banks Be Taking Now?

The concept underlying Pillar Two is relatively straightforward; a globally consistent 15% minimum tax regime. The reality is one of the most complex international tax measures ever implemented. Some of this complexity is driven by design and policy and it is important that banks are assessing the potential impact of the regime: this includes consideration of whether there is a risk of top-up tax as well as focussing on meeting reporting and compliance requirements.

Potential of Agricultural Lands for Conservation of Green Area in Chiang Mai City

Chiang Mai, an important City in the northern part of Thailand, has been changed rapidly because ofurban development. This causes the increase of population and changes in land use, especially the rapiddecrease of agricultural lands which, as a result, affects on the environment and quality of life of people in thecity. The objectives of this research study were to investigate the potential of agricultural lands, the attitude ofthe agriculturist in the area on agricultural lands, and to give suggestions on how to conserve the agriculturallands sustainably by means of field survey, collected secondary data and interview 1,000 agriculturist withการศึกษาศักยภาพแหล่งเกษตรกรรม เพื่อการอนุรักษ์ให้เป็นพื้นที่สีเขียวของเมืองเชียงใหม่The Potential of Agricultural Lands for Conservation of Green Areain Chiang Mai Cityปรัชมาศ ลัญชานนท์Pradchamas Lanchanonคณะสถาปัตยกรรมศาสตร์และการออกแบบสิ่งแวดล้อม มหาวิทยาลัยแม่โจ้ เชียงใหม่ 50290Faculty of Architecture and Environmental Design, Maejo University, Chiang Mai 50290, ThailandE-mail: lanchanon@gmail.com116 JARS 10(2). 2013questionnaires. The potential of agricultural lands was then analyzed by Potential Surface Analysis (PSA) andquantitative data was analyzed in terms of percentage and mean. It was found that the northern and easternplains were appropriate for farming, and the southern plain for horticulture. As for economics and social aspects,it revealed that there were sufficient supporting market for farm products, but the problems was high productioncost and low production price. However, the agriculturists want to conserve their agricultural lands, but they didnot have younger generations to do farming. To conserve the farm lands sustainably, it consisted of the landuse control for conservation of agricultural lands, tax measures, investment funds or cooperative, producttransformed promotion, the development of central markets for agricultural products, the implantation ofland-use awareness to the people and younger generations, the knowledge and information dissimilation tothe agriculturists and agricultural grouping.

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

We estimate the elasticities of the most important tax categories using a new quarterly database of discretionary tax measures for the USA, Germany, and the United Kingdom over the period 1980Q1 to 2018Q2. Employing Romer and Romer’s (2009) narrative approach, we construct a policy-neutral dataset based on revenue figures from governmental records. Using this quantitative information, we are able to subtract policy-induced changes, which often are not considered in the literature. Furthermore, we estimate state-dependent elasticities. Our conclusions are as follows. (i) In Germany and the UK, long-term tax-to-base elasticities are generally higher than short-term elasticities, whereas results for the USA are mixed. (ii) Short-term base-to-output elasticities tend to be smaller than unity, whereas long-term elasticities are close to unity. (iii) German and UK tax-to-output elasticities in the short term are lower than long-term elasticities, with mixed results for the USA. (iv) For tax-to-base elasticities, we find business-cycle asymmetries across countries but not within countries. (v) For base-to-output elasticities, our results suggest few asymmetries across countries and more asymmetries across tax types. (vi) Typically, the above conclusions do not hold for corporate income tax.

Investor-state dispute settlement and tax matters: limitations on state’s sovereign right to tax

ABSTRACT More and more countries are coordinating at the international level to implement taxation measures to counter the problem of tax avoidance by multinational corporations (MNCs). This has led to increasing internalization of taxation measures, which, in turn, will lead to greater normative dialogue between international taxation and other branches of public international law such as international investment law (IIL). This paper argues that MNCs and foreign investors have not shied from using the IIL framework to challenge sovereign taxation measures of States before investor-State dispute settlement (ISDS) tribunals. These challenges, part of the increasing judicialization of international tax measures, have generated a rich body of case law. While ISDS tribunals are generally deferential towards State’s sovereign right to tax, they clearly recognize certain limits on this sovereign power. ISDS tribunals have not hesitated from laying down principles where abuse of taxation powers or imposition of taxes that are not reasonable or proportionate have been held to be inconsistent with the country’s investment treaty obligations. Even carving-out taxation measures from the ambit of the investment treaty are no surety that an ISDS tribunal will not exercise jurisdiction over such tax measures especially when they are not exercised in a bona fide manner. As countries find ways to tax MNCs to counter the problem of tax avoidance, they should keep these important jurisprudential principles in mind.

The Income Tax Landscape in Latin America: A New Crypto Hub?

This article compares income tax measures introduced in Latin America and explores the challenges and opportunities that could arise for the region from the proliferation of cryptocurrencies and other crypto assets.

The Process of Approaching the Taxation of the Exploitation of Personal Data

As pointed out, Harakat M. (2015), in seeking to elucidate the fiscal impact of such or such a measure on economic and social growth, through the evaluation of positive or negative distortions of the tax, it is necessary to take into account the social cost, the tax architecture of security and transparency, in order to satisfy the four maxims put forward by Smith A. (1776): Proportionality, Stability, Equity, Efficiency. For this, the State has, at the time of the introduction or the re-examination of an instrument of state action, the possibility of examining its appropriateness to know if it has the expected effect, if it is the most effective and the least expensive to achieve the objective fixed by the law or if, on the contrary, other instruments better marketed, would be more appropriate, in reference to the famous duality Equity-Efficiency.This article follows up on our previous work of immersing ourselves in the literature dealing with instruments for taxing the negative externalities of the exploitation of Big Data by Data-Driven-Business-Models, and proposes an overview of the theory of externalities by attempting to draw some lessons from environmental taxation, and then by presenting the various proposals for tax measures on Big Data, in order to prepare ourselves for a better approach to the framework for adopting a tax measure taxing the negative externalities of Big Data in Morocco, which is the subject of our doctoral thesis.

Tax Convergence and the Next Generation European Union

In this article, the author describes the spontaneous convergence of COVID-related tax measures that occurred in 2020, which was closely followed, at the EU level, by a new recovery instrument, with far-reaching goals, denominated Next Generation EU. The author explains how the process of tax convergence was connected to a broader institutional process that has “fiscal underpinnings” in the broadest sense, and draws conclusions on the innovative formula that emerged in this specific area of EU fiscal architecture.

The Fiscal Impacts of Trade and Investment Treaties

This article examines the extent to which the latest wave of trade and investment treaties has impacted the fiscal stability of the world’s nations. We construct two new measures of trade liberalization based on the importance of a country in the global network of trade and investment treaties, namely the number of trade treaty links and the hub connectedness of a country. This analysis is important since many analyses of the welfare impacts of trade liberalization typically do not consider the impact on the fiscal balances of governments or assume that any loss of tariff revenue would be made up by the imposition of indirect taxes, like a Value Added Tax. Using a cross-country regression analysis, we confirm that trade liberalization has, on average, reduced the amount of tariff revenue collected. Furthermore, trade liberalization is not correlated with an automatic compensation for lost tariff revenue through other taxation measures. We find, in some cases, that trade and investment treaties are correlated with a reduction in total fiscal revenues and an increase in government debt. These results suggest that policymakers need to take the fiscal impacts of trade and investment liberalization into account when making decisions about trade and investment policy.

Whether the Directed Technical Change Promotes the Improvement of the Energy Structure in China

Optimizing energy structure is necessary to achieve full decarbonization. In this study, we introduced thermal power, clean energy, and traditional fossil energy as three different input factors into the translog production function. We considered three improvement paths of the energy structure, including replacing fossil energy with electricity and using thermal power to substitute for clean energy and then analyzed whether the directed technological change promotes the optimization of the energy structure in China. The results show that there is a substitution relationship between thermal power and clean energy during the internal transition process, and the biased technical change is thermal power-using, which suggests that technological change is not conducive to the improvement of electricity structure from thermal power to clean energy. In external transition, the biased technical change is fossil energy-using instead of thermal power-using or clean power-using, and there is a substitution relationship among three factors, which shows that technical change goes against the improvement of energy structure from fossil energy to electricity. We propose that the Chinese governments adopt energy price or carbon tax measures to adjust the directed technical change and thus optimize the energy structure. In addition, according to the results from China, different countries can improve the energy structure based on their characteristic production mode.

Taxing Africa for inclusive human development: the mediating role of governance quality

PurposeGiven that the literature on the links between taxation and inclusive human development is ambiguous, it is important to investigate whether the mediating influence of governance in taxation for inclusive development exists. Thus, this study aims to explore the linkages between the governance quality, taxation and inclusive human development (i.e. inequality-adjusted human development index).Design/methodology/approachThis study employs the generalized method of moments (GMM) technique to establish the empirical findings on 52 African countries for the period 2010–2018. Among the existing GMM approaches, this study follows the Roodman approach, an enhancement of the Arellano and Bover techniques, which limits the proliferation of instruments. This study uses the two-step approach, which deals with issues of the heteroscedasticity as against instead the one-step procedure, which solely addresses the homoscedasticity concerns.FindingsThe following findings are established. First, there is an unconditional positive effect of taxation on inclusive human development. Second, the net effects of taxation on inclusive human development, associated with the interaction of the government revenue with governance quality variables, are positive for the most part. It is then evident that when taxation policies are combined with good governance initiatives, the ultimate impact of inclusive human development is likely to be enhanced.Originality/valueThis study establishes that, whereas taxation dynamics largely have a favorable incidence in promoting inclusive human development, when such taxation measures are complemented with good governance initiatives, the overall impact of inclusive human development is also likely to be positive. It follows that policies designed to promote political, economic and institutional governance should be implemented in tandem, which policies designed to boost tax performance in the sampled countries. The findings can also be understood from the perspectives that inclusive human development is likely to be boosted when taxation measures are complemented with, (1) the free and fair election and replacement of political leaders (i.e. political governance), (2) the formulation and implementation of inclusive policies for the delivery of public goods (i.e. economic governance) and (3) the respect by citizens and the state of institutions that govern interactions between them (i.e. institutional governance).

Measures of state support for the hotel industry in the context of a pandemic and Anti-Russian sanctions

The presented work systematically analyzed the currently implemented measures of state support for organizations of the hotel industry, aimed at neutralizing the negative consequences of the pandemic and the introduction of anti-russian sanctions by a number of foreign states. Special attention is paid to the peculiarities and problems of the implementation of measures of tax, financial, credit, budget and industry support of the hotel industry, assessment of their effectiveness and significance for economic entities. Conclusions are being drawn about improving the set of measures of state support for the industry in order to increase their targeting, effectiveness and focus on pre-overcoming the negative consequences of the pandemic and sanctions pressure.

Tax Incentives for Sports

The paper aims to analyze how tax law encourages citizens to play sports. The right of citizens to receive a tax deduction for sports expenses that entered into force on 1 January 2022, in the author’s opinion, needs to be significantly improved, since the expenses under consideration do not always mean sports activities. Digital fixation is offered in a special application for sports activities. In addition, independent sports activities remain outside the framework of this system, which violates the principle of equality of taxpayers. The paper suggests the idea of encouraging independent sports activities and passing RLD standards through tax measures: for citizens who play sports on their own, it is necessary to provide for the right to a deduction for personal income tax, but not in connection with expenses, but when passing certain standards. The author believes that strengthening the health of the population due to sports and a healthy lifestyle will repeatedly pay off the tax expenses of the state associated with the use of innovative tax measures to facilitate healthy lifestyle.

Tax systems of Ukraine and EU countries during the COVID-19 pandemic: current status and prospects

At the start of 2020, the world faced major challenges due to the COVID-19 pandemic. International institutions, governments and various organizations are forced to apply unprecedented restrictive measures in many areas of activity. The answer to these challenges by the governments of almost all countries of the world is actively manifested in tax measures aimed at supporting citizens and businesses. The article was devoted to the study of the level of taxation for certain taxes in Ukraine and EU countries in a crisis. The study proves the relevance of determining the optimal level of taxes to fill the budget. This study uses the method of comparative analysis, which compares the levels of tax rates in Ukraine and some EU countries. The optimal level of tax revenues to the state budget has been determined. The level of tax revenues to the Consolidated Budget of Ukraine has been analyzed and the main directions for improving the tax system of Ukraine have been identified. The necessity of focusing on the experience of highly developed EU countries in the field of taxation with the obligatory consideration of national characteristics is proved.

The Effectiveness of Fiscal-Budgetary Measures to Counteract the COVID-19 Crisis. Evidence from EU Countries

Abstract The aim of this study is to analyse the fiscal-budgetary measures, which have been taken by almost all governments around the world, including EU countries, in an attempt to limit the negative impact of the pandemic blockade. In most cases, these measures concerned the granting of technical unemployment, the postponement of tax payments, and the suspension or postponement of loan instalments or their maturity. The present study focuses especially on tax and expenditure measures that EU countries have introduced in response to the COVID-19 crisis. With this purpose, a paired sample t-test and multiple linear regression are used based on balanced panel data for the 27 EU countries for the period 2000Q1–2020Q3. The obtained results show that COVID-19 crisis had a significant negative impact on GDP growth. At the same time, a significant increase in public debt and government deficit occurred due to COVID-19 crisis. However, resuming the findings, the intensity, and implicitly, the effect of these measures depends on the specifics of each economy.

Tax tools for smoothing the negative consequences of the COVID-19 pandemic: foreign experience

The COVID-19 pandemic has become a serious challenge for the entire world community. National governments were forced to introduce restrictive measures to prevent the spread of a new coronavirus infection. However, the self-isolation regime announced in many countries is one of the main factors of the recession into which the world economy has plunged. As a confirmation, the article presents the results of a study conducted by the International Monetary Fund. In connection with these events, anti-crisis programs were developed in many countries of the world, which provided for several packages of financial support measures for the population and businesses. One of the basic tools for implementing the approved economic recovery programs were tax measures, which are the subject of this study. A review of the world practice of using tax instruments allowed us to distinguish two groups. The first group includes tax measures adapted to the new socio-economic realities, which, despite the reduction of the tax burden, are not tax expenditures. The second group includes tax expenses. The scientific novelty of the study lies in the fact that, based on the results of studying international experience, a classification of tax expenditures used to offset the negative consequences of the COVID-19 pandemic was developed. The purpose of the provision is selected as a classification feature. The conducted research allowed us to conclude that the most popular tax expenditures were such tax expenditures as the reduction (exemption) of indirect taxes on medical products and products of firms affected by the introduction of restrictive measures. In addition, tax expenditures in the form of tax deductions and credits for taxes on individual and corporate income have become widespread, encouraging taxpayers to direct savings to finance investments and activities of small and medium-sized businesses, special funds to combat COVID-19.

The Environmental Impact of Plastic Grocery Bags and Their Alternatives

Plastic grocery bags can casue a variety of environmental problems. Plastic bags pollute the air through their life cycle, from raw material extraction and manufacturing process to the disposal. The raw materials to produce plastic bags are mainly crude oil and natural gas, and the extraction process of those raw materials can cause the emission of a considerable amount of air pollutants to the atmosphere. In addition, plastic bags can also cause water pollution and soil pollution. Countries around the world have issued bans and tax measures to reduce the use of plastic grocery bags. At the same time, a variety of alternative options have been created and promoted to replace the use of plastic bags, including paper bags, jute bags, and other biodegradable bags. Each alternative has its advantages and disadvantages. After analysis of the environmental impacts and the practicability of plastic bags and their alternatives, we evaluated the feasibility of the utilization of alternative grocery bags under difference occasions as well as corresponding policy measures. Finally, we proposed several suggestions to mitigate the problem of plastic bag pollution, including developing new degradable bag technologies and reusing grocery bags.

ANALYSIS OF TAX POLICY IMPACT ON THE SHADOW ECONOMY OF RUSSIA AND THE USA

The article examines the impact of the shadow sector on the country's economy. It is determined that the generating factors of shadow activity are imperfect tax legislation and established political and economic institutions. The negative impact of shadow economy is expressed in a low quality of economic growth, which causes the need to search for tools to influence shadow activities. The tax policy is examined as one of such tools. Tax policy creates different incentives for economic entities. By so doing, the tax policy should contribute to the accumulation of sufficient funds in the budget, to the growth of business activity in the country. However, for Russia, the relationship between the tax burden and the shadow economy turned out to be insignificant; for the United States, an inverse linear relationship between the indicators was revealed. In consequence of this, it is concluded that only tax measures are insufficient to combat the shadow economy in Russia. Moreover, a general pattern for the two countries was noted, it consists in lowering the tax burden and increasing the shadow activity during periods of economic downturn. The analysis of the tax policies used in the two countries shows that Russia has high taxes and labor contributions compared to the United States. More favorable conditions in Russia compared to the United States in the form of time spent for preparing and paying taxes and the number of tax payments do not affect the reduction of the shadow economy scale. The time required to start a business in Russia exceeds that of the United States. To reduce the scale of shadow activity, it is necessary to revise the mechanism of insurance premiums payment, improve the institutional conditions for business functioning.