Multiple Tax Research Articles

Deepening Tax Compliance Culture in the Educational Institutions of a Private Character in Anambra State, Nigeria

Gap created by none definition of ‘educational institutions of public character’ in any of the Nigerian tax laws for the purpose of ascertaining income tax and capital gains tax has generated serious arguments and legal debates between the operators of educational institutions of a private character and the relevant tax authorities in Nigeria. Among the profits exempted from the tax payment as provided in section 23(1) (c) of the Companies Income Tax Act, 2007 (as amended) are the profits of any company engaged in educational activities of a public character in so far as such profits are not derived from a trade or business carried on by such company, and this is also contained in paragraph 13 of the third Schedule of Personal Income Tax Act, 2011 (as amended) and section 26(1) (a) of Capital Gains Tax Act, 2004 (as amended). These sections of the tax laws have been misconstrued by many operators of private schools in Nigeria to mean ‘all-inclusive’; thus, leading to low compliance in paying taxes by this circle. Consequently, it has led some persons and group of persons to demand for further insights and enlightenment on the relevant provisions of federally administered tax laws and tax administration as it concerns private schools in Nigeria. Against this backdrop, this paper attempts to deepen tax compliance culture in the privately owned educational institutions in Anambra State, Nigeria. It does this by examining certain tax concepts and laws, explaining the responsibilities of operators of private schools on tax matters and providing them with information on the requirements of the tax laws as they affect this group and for education of the public at large. This paper is organized to eradicate tax evasion, while minimizing tax avoidance and eliminate any form of multiple taxation occurring within this circle. It concludes that improvement in tax education of this stakeholder would likely optimize tax revenue collection and voluntary compliance culture. Among others, this paper recommends that FIRS should have more effective and efficient structure of taxpayers’ service department that would support in addressing the taxpayers’ grievance and regularly educate all the stakeholders in improving tax compliance culture.

Are sales and taxes ‘sticky’? Empirical evidence of the impact of tax enforcement on tax revenue growth in China

ABSTRACT Despite the global economic downturn, China’s taxation continues to grow rapidly. Although many scholars attribute this phenomenon to macro factors, in this study, we investigate this issue from the perspective of combining enterprises and tax enforcement. Through a regression analysis of data from Chinese listed firms over the 2008–2018 period, we find that tax enforcement can lead to the stickiness of corporate tax expenses, that is, the percentage decrease in tax expenses for a decrease in sales revenue is less than the percentage increase in tax expenses for an equivalent increase in sales revenue. Further analysis shows that tax stickiness exists in multiple taxes, with business tax stickiness being the highest. Tax stickiness provides a new explanation for China’s taxation to maintain rapid growth during economic downturns.

Fiscal capacity in “post”-conflict states: Evidence from trade on Congo river

In many post-conflict states with a weak fiscal capacity, illicit domestic levies on trade remain a serious obstacle to economic development. In this paper, we explore the interplay between traders and authorities on Congo River - a key transport corridor in one of the world’s poorest and most conflict-ridden countries; DR Congo. We outline a general theoretical framework featuring transport operators who need to pass multiple taxing stations and negotiate over taxes with several authorities on their way to a central market place. We then examine empirically the organization, extent, and factors explaining the level of taxes charged by various authorities across stations, by collecting primary data from boat operators. Most of the de facto taxes charged on Congo River have no explicit support in laws or government regulations and have been characterized as a “fend for yourself”-system of funding. Our study shows that traders have to pass more than 10 stations downstream where about 20 different authorities charge taxes. In line with hold-up theory, we find that the average level of taxation tends to increase downstream closer to Kinshasa, but authorities that were explicitly prohibited from taxing in a recent decree instead extract more payments upstream. Our results illustrate a highly dysfunctional taxing regime that nonetheless is strikingly similar to anecdotal evidence of the situation on the Rhine before 1800. In the long run, a removal of domestic river taxation on Congo River should have the potential to raise trade substantially.

Understanding the Fundamental Issues of Multiple Taxation in Nigeria: The Theoretical and Historical Approach

Taxation has not been fully harnessed in Nigeria years due to oil boom which has been the major source of government revenue. With decline in the revenue from oil, the allocation from the federal account dwindles and has become inadequate for the state and local governments. This, accordingly, re-awakens clarion attention to non-oil revenue source (taxation) in other to boost the revenue account. Consequently, the governments have enacted various forms of tax laws in other to boost her revenue. As a result, there are multiplicities of taxes payable to the Federal, States; and Local Governments. This became apparent as the various tiers of government enacts tax laws that is not within the ambits of their taxing powers; while others in exercising their legitimate taxing power, act in excessive manner that leads to tax proliferation, leaving the taxpayer with burden of paying too many taxes. Some of the taxes are illegal, not in accordance with the law, others are legal, in accordance with the law, but have caused proliferation of taxes in the system. These factors have given rise to multiple taxation with the attendant consequence: scaring investors away and dwindling the rate of tax compliance. There is need to develop an efficient tax system in Nigeria that would be devoid of multiple taxation syndrome. It is against this backdrop that this paper is initiated to examine the possible way out of the problem. The paper adopted doctrinal research methodology. Accordingly, reliance was placed on the study of both primary and secondary sources of law like the constitution, federal and state enactments, text books, journals and newspapers. The paper founds the intricate causes of multiple taxation to include Nigerian Fiscal Federalism, Administration of Road Tax and Illegal Tax Collectors. Keywords: Multiple taxation, road tax, tax collectors DOI: 10.7176/JAAS/64-04 Publication date: May 31 st 2020

Small and Medium Enterprises Investment Vehicles in Nigeria: The Challenges and Prospect

This study stands to find out the various investment vehicles in the Small and Medium enterprises (SME) sector in Nigeria. The research also ascertained the challenges confronting investors to invest in the identified investment vehicles in the SME subdivision. The research utilized both interpersonal interview and desk research approach and reviewed related epistles on the phenomenon to provide conceptual evidence. The paper observed that there are numerous investment vehicles in the SME sector that potential and existing investors can benefit from. The viability of the SME subdivision has a great influence on the growth of the overall economy of a nation. The research recommended in line with the evidence from the reviewed papers and the drawn conclusion that, government should provide enabling economic, political and socio-cultural environment to influence investors to invest in the SME sector in Nigeria. Government should reduce the multiple tax options and implement policy that will regulate those imposing unnecessary dues on the SME sector in Nigeria. Government should provide the basic infrastructural needs to enable SME sector to operate effectively in Nigeria. Government should do more to provide security gadgets everywhere in Nigeria to detect the bad gangs, armed robbers, etc. so as to reduce insecurity.

Stick or Carrot? Asymmetric Responses to Vehicle Registration Taxes in Norway

Vehicle registrations have been shown to strongly react to tax reforms aimed at reducing CO2 emissions from passengers’ cars, but are the effects equally strong for positive and negative tax changes? The literature on asymmetric reactions to price and tax changes has documented similar results for everyday goods, but has not yet considered durables. We leverage multiple vehicle registration tax (VRT) reforms in Norway to show that, within car model, new car registrations react to tax cuts and fee-bates significantly more than to tax increases. The estimated elasticity is -1.99 for VRT decreases and 0.77 for increases.

Hospitality and tourism entrepreneurship: Administrative barriers in Imo state, Nigeria

Impeding factors to the operational efficiency of hospitality and tourism enterprises in Imo State, Southeast Nigeria, were examined in this study. The conceptual model considered if access to funds, government policies and infrastructure determine the efficiency of hospitality and tourism enterprises through the impact on sales volume, cost of operation and productivity. A 21-point questionnaire was administered to 384 respondents of 63 hospitality and tourism enterprises across the state, in which 311 valid instruments were used for analysis. Means and standard deviation were measured in relation to the consequent variables. Hypotheses were tested in Pearson Chi-square to determine significant relationships between the variables and to justify the research model. The result revealed that poor access to funds, inconsistent government policies (like multiple taxation) and poor infrastructure affect sales volume, operating cost and productivity of hospitality and tourism enterprises. The study equally exposed policy weaknesses of the government in providing enabling environment for sustainable hospitality and tourism entrepreneurship, thus leading to poor sectoral development and job loss. Recommendations include the expansion of road networks in the state and prioritization of waste management processes in order to enhance access to hospitality and tourism locations, as well as lessen the overwhelming burden of waste disposal which increases the operating cost of hospitality enterprises.

Review on Production and Marketing of Wheat in Ethiopia

Among the most important crops grown in Ethiopia wheat is one, both as a source of food and income generating venture for farmers in the country. Wheat and wheat products represent 14% of the total caloric intake in Ethiopia. Wheat is a cereal crop, which is produced in most parts of Ethiopia. Ethiopia is the second next to Egypt in Africa in wheat production which is 4.54 million tons. This study was aimed at reviewing wheat production and marketing in Ethiopia, with specific objectives of reviewing the wheat Production, supply and its Constraints in Ethiopia, major Marketing actors and function of wheat in Ethiopia, marketing structure, conduct and performance of wheat in Ethiopia as well as constraints and opportunities of wheat marketing in Ethiopia. The data were collected from secondary sources mainly from FAOSTAT, CSA and different published materials on wheat market chain in Ethiopia. The general idea of the review shows that Ethiopia has potential for wheat production but the two sides of agricultural constraints are production and marketing from the producer side faced with Rain failure, higher fertilizer price and delayed delivery, Soil erosion, Labor shortage, Lack of credit access, Lack of Draft power and Prevalence of crop diseases. On marketing side, lack of market information providing institutions, higher input price, multiple taxes, chemical herbicides adulteration, absence of road service, poor product quality and high cost of input, weak market linkages among market. In wheat marketing, the major actors identified during the review were; producers, farmer traders, urban assemblers, wholesalers, retailers, processors (millers, flour mill), consumers and commission agent. The market actors involved in different activities (wholesaling, retailing, assembly). Therefore, the government and other concerned bodies should focus on increasing production and productivity of wheat which in turn focused for establishing well wheat market development for mutual benefits of all actors.

Effects of multiple taxation on the survival of businesses in grand cape mount county, Republic of Liberia

Effects of multiple taxation on the survival of businesses in grand cape mount county, Republic of Liberia

Has tax reforms in India been effective in tobacco control: Evidences on affordability of cigarette after introduction of Goods and Service Tax.

Background:Taxes are the most cost-effective mechanism to deter tobacco consumption. However, the tobacco tax system has not been favorable in India. India introduced Goods and Service Tax (GST) in 2017 to make the tax system uniform. This paper seeks to examine the role of the newly rolled out tax system on cigarette prices and affordability and hence consumption.Methods:We used secondary data from different government publications and conducted simple statistical analysis – to present price changes, affordability of cigarette in pre and post GST regime. Affordability was estimated comparing per capita income with price index of cigarette.Results:The findings suggest that the tax structure has not been simplified with multiple taxes imposed based upon the length of cigarettes. The relative WPI of cigarettes is increasing suggesting higher increase in cigarette prices than general price. Affordability though declined in the initial two years as compared to WPI and per capita income, it remained neutral in the post GST regime.Conclusions:The findings suggest that tax reform should aim at influencing affordability adequately so that it deters consumption of cigarette.

Simultaneous optimization of multiple taxes on car use and tolls considering the marginal cost of public funds in Japan

We simultaneously optimize multiple tax instruments (fuel tax, car-ownership tax, and tolls) when these instruments are used as public funds with distortionary labor tax, accounting for pollution, congestion, accident externalities, and fiscal constraints of the tax-related agency and the toll-collecting agency. We quantitatively optimize taxes and tolls using parameters for Japan under three scenarios: (1) imposition of peak and off-peak tolls at different rates and simultaneous optimization of all tax instruments; (2) optimization of only car-related taxes without consolidation of the toll-collecting agency’s fiscal constraints; (3) optimization of only fuel tax. We find that peak toll and fuel tax should be higher, and off-peak toll and car-ownership tax should be lower than the current rate under Scenario 1. Scenarios 1 can improve welfare by 1000 to 2400 dollars/car, and Scenarios 2 and 3 can achieve more than 90% and 20–60% of the welfare gain in Scenario 1, respectively.

Tax Evasion and its Effects on the Economy

Tax evasion happens when individuals, organization or agency purposely do not adhere to their tax obligation. The loss of tax revenue caused by tax evasion seriously hampers the proper functioning of the public sector by creating problems in its ability to finance its expenses. The study investigates the opinion of the tax professionals regarding the tax evasion in Nepal with the focus on the factors responsible for the tax evasion and possible remedies to decrease the problem of tax evasion. The main objective of the study is to identify the causes of income tax evasion and assess the impact of tax evasion in Nepal. To collect the information regarding tax evasion in Nepal a well-designed questionnaire with five-point Likert scale has been used. Their opinion reveals that high tax rates, corruption in public sector units, multiple tax rates and inefficient tax authorities are the main causes of tax evasion in Nepal.

Tax policies and entrepreneurship sustainability in Ondo State, Nigeria

The study examines the effect of tax policies on the survival of entrepreneurship in Ondo State, Nigeria. The study employed survey research design with the population of 18 local government areas. The study adopted multi-stage sampling techniques to select the sample size of nine local government areas that have duly registered small and medium enterprises (SMEs) under Small and Medium-Scale Enterprise Development Agency of Nigeria (SMEDAN) in Ondo State. Structured questionnaire was administered and returned by the respondents. Data collected was estimated using ordered logistic regression to test the hypotheses formulated. The study revealed that the three explanatory variables (multiple taxation, tax rates, and tax incentives) accounted for 43% of the variability of SMEs sustainability in Ondo State with a p value < 0.05, α = 0.0029. It also revealed that there was a negative significant effect between multiple taxation and sustainability of entrepreneurship; while tax rates and tax incentives have a positive relationship on entrepreneurship sustainability. Based on these findings, the study therefore recommends that for government to truncate unemployment rates that resulted to chronic poverty, banditry, kidnapping, and other social vices in the state, it is imperative that a favorable tax regime shall be provided which will encourage entrepreneurship sustainability and reduces social vises. This will not only enliven existing ones but also inspire the emergence of new ones. Friendly tax regime would engender voluntary compliance amongst the entrepreneurs in the long run with resultant tax yield.

GST: A TAX REFORM FOR SUSTAINABILITY OF INDIAN HANDICRAFTS

Purpose of the study: Taxation is one of a tool, which helps the Government for the achievement of the goal of sustainable development for every sector including handicraft. The objectives of this study are to know about Goods and Services Tax &amp; its inferences on sustainable development of Indian handicrafts and to identify the role of GST as tax reform in the sustainable development of handicrafts sector in India.&#x0D; Methodology: The Descriptive method of research has been used to gather information about the existing conditions of GST and Handicraft sector of India. This study is based on secondary data. The data has been taken from different journals, books, magazines, websites, and published data from government institutions. This study is explanatory in nature. The collected data from different sources has been reviewed and data relevant to the handicraft sector further analyzed.&#x0D; Main Findings: GST brought transparency in the tax system and it also eliminated the multiple taxes, which ultimately increases the final prices. This study revealed that GST would make Indian handicrafts more competitive in the domestic and foreign markets. &#x0D; The implication of the study: GST implemented on July 01, 2017 with the aim of simplification of the tax system, fiscal structure, United Indian Market, and sustainable development in India. It is a comprehensive value-added tax which merged different taxes including VAT, service tax, surcharges, CST, etc. &#x0D; Novelty/Originality of this study: GST is new tax reform in India, only a few studies have been done on it. As per the researcher ’ s best knowledge few studies have been carried out on GST and handicraft sector, but none of the study is carried out on this topic.

Tax Competition with Mobile Labor, Residents, and Capital

We construct a unifying model of optimal decentralized policymaking that includes multiple tax and spending policies with mobile workers, mobile residents, and mobile capital. Local governments are atomistic with respect to the world capital market, but are linked by commuting patterns, the cost of which is endogenously determined by congestion. Commuting gives rise to “tax exporting,” with a higher capital tax in the (central) city partially borne by non-resident commuters from the suburbs, allowing the capital tax to remain optimal even when head taxes are available. More generally, employment-based taxes are valuable instruments only when jurisdictions are net recipients of commuters, while jurisdictions that are net providers of commuters will choose to rely on the use of residential-based taxes. Jurisdictions can combine labor and resident taxes to effectively tax commuters. Even though jurisdictions are price-takers in the world capital market, they strategically react to the policies of other small jurisdictions due to commuting linkages.

Corporate Tax Planning and Financial Performance in Nigerian Non‐Financial Quoted Companies

AbstractThis study investigates the relationship between corporate tax planning and financial performance of quoted non‐financial companies. The secondary yearly data used were gathered from 47 sampled non‐financial companies from 2007 to 2016. A panel vector autoregressive approach with structural analysis such as variance decomposition and impulse response function was adopted. The results of the study revealed that tax saving had a direct relationship with financial performance, while tax avoidance had an inverse relationship with financial performance. The financial variables under consideration mainly contributed to their own shocks or forecast errors. The responses of the financial performance to shocks in tax avoidance had an expansionary effect which could hinder the performance of the companies, while financial performance response to shocks in tax savings had a contractionary effect and as such, could lead to better performance of the companies. Thus, corporate tax planning that enhances tax savings greatly contributes to the performance of non‐financial companies. They should therefore not only engage in tax planning, but also ensure that their tax planning is legal, and leads to tax saving for the companies, such that no excessive or multiple tax will be paid and hence, better financial performance will be achieved.

Effect of Tax Policy on Unemployment in Nigeria

This Study examined the effect of tax policy on unemployment in Nigeria, using aggregate time series data from 1981 to 2017. Relevant data was sourced from the Central Bank of Nigeria Statistical Bulletin and were estimated using the Ordinary Least Square technique. The results of the analysis showed that tax policy has significant long run impact on unemployment in Nigeria. Specifically Company income tax, Personal income tax and Customs and excise duty have inverse relationship with unemployment in Nigeria, while Value added tax showed positive relationship. Thus government should factor in tax policy when formulating policies that are meant to reduce unemployment in Nigeria. Based on findings of the study, the following recommendations were made; provision of adequate infrastructures by the government, elimination of multiple taxes as well as adjusting tax rates to encourage investments. Keywords: Tax revenue, Unemployment, Company income tax, Value added tax, Personal income tax, Custom and Excise duty, Nigeria. DOI : 10.7176/RJFA/10-12-13 Publication date :June 30 th 2019

Impact of GST on Industry with Special Reference to the Real Estate Sector

The introduction of GST in India has ensured uniform exemption list, uniform rates and uniform collection procedures throughout the country. For the industry, this implies a shift from a complex system of multiple tax rates and collection procedures to a new system that is technology-based, transparent and free from distortions. This paper outlines the benefit of GST for the industrial sector with special emphasis on the real estate sector. Real estate is an important sector of the Indian economy in terms of contribution to GDP and employment. With various concessions announced by the GST Council from time to time for the real estate sector, the sector is bound to get a boost. At the same time, the government will also ensure proper monitoring of one of the most unregulated sectors in India, by ensuring that the rate cut benefits are passed on to the neo and middle-class home buyers.

Acceptability of residential licences as quasi-land ownership documents: Evidence from Tanzania

Most of the property owners in developing countries particularly those residing in informal settlements do not have formal land ownership documents, which weakens security of tenure and denies them access to credit. In addressing the problem, various initiatives have been taken but some of them have not been very effective. This paper uses a case example of an upgraded informal settlement in Tanzania to assess acceptability of residential licences as quasi-land ownership documents among property owners and lending institutions. Findings show that security of tenure, access to credit, property value enhancement, land conflict resolution and guarantee for compensation are the main factors that attract property owners to apply for residential licences. On the other hand, short life span of residential licences, exposure to multiple taxation and land rent, complex application procedure and lack of knowledge on residential licence uses are the main factors accounting for low residential licence application. Findings also show that some property owners do not use residential licences as collateral due to low financial literacy and fear of losing property in case of loan default. Although findings also show that many banks accept residential licences as collateral, it is also clear that having a residential licence without owning a business or having a regular income stream is not enough for a property owner to qualify for a loan because lenders are more interested in borrowers’ ability to service the loan rather than mere possession of a land title or its equivalent. Knowledge of these factors is important in devising appropriate interventions that, apart from placing much emphasis on formal land ownership documents, take on board all key factors that hinder land owners from effectively utilising their land for capital and income generation.

Impact Of Taxation On The Performance Of Small And Medium Enterprises In Aba, Abia State, Nigeria

This work aims at assessing the effect of taxation on the performance of SMEs in Aba Abia State. A survey approach was adopted while the questionnaire was used as an instrument. A randomly selected 162 employees and owners of 40 SMEs were used for the study. Collected data were analyzed using the multiple regression analysis and one sample t-test. Results indicate that significant and positive relationship exist between taxation and the performance of SMEs and that tax assessment, tax collection and tax utilization significantly influence the performance of SMEs in Aba. It was recommended among others that the Nigerian tax system must seek to protect and promote the SMEs for them to contribute meaningfully to economic growth and that they should identify the agents responsible for illegal, multiple tax collections that seek to frustrate SMEs and deal with them accordingly.