The article examines the conceptual approach to the formation and assessment of the effectiveness of budgetary and tax policy in the context of globalization processes under martial law. The study systematizes and analyzes existing theoretical approaches to determining the effectiveness of fiscal policy under wartime constraints and substantiates the necessity of applying a comprehensive approach to their practical implementation. Particular attention is paid to the development of promising directions for budgetary and tax policy, taking into account the reorientation of the national economy toward endogenous factors of economic stabilization. The research emphasizes the importance of improving the efficiency of the budget regulation system, developing strategic goals and priorities for the development of territorial communities, integrating them into the budget planning process, and forming a system of indicators that allows assessing the effectiveness of fiscal policy in achieving socio-economic objectives. It has been established that the development of integration and globalization processes significantly affects the conditions of social development and affects the effectiveness of the regulatory mechanism of state fiscal policy. Given the high volatility of the economic situation in wartime, it is important to adapt the priorities and objectives of domestic fiscal policy to new global challenges, strengthen the role of endogenous factors in the process of ensuring economic stability and the development of financial institutions. It is argued that the development of economic sectors, territorial communities, and social relations, as well as the stability and balance of public finances, largely depend on the optimal ratio of tax regulation instruments. The study also analyzes the need for a coordinated approach to assessing fiscal policy effectiveness under wartime conditions and for ensuring prompt responses to economc challenges through optimal taxation conditions and efficient tax administration. The research concludes that the formation of an effective budgetary and tax policy requires determining an optimal level of tax burden that balances the interests of the state and taxpayers while ensuring the rational formation of budget revenues and the efficient use of public expenditures.

Corporate amalgamation is a pivotal strategy for firms seeking to strengthen their market presence, achieve operational efficiencies, and unlock financial synergies. In India, such mergers and restructurings are governed by a complex interplay of corporate and tax laws designed to balance business growth with stakeholder protection. The Companies Act, 2013, along with the Income Tax Act, 1961, provide the legal and fiscal framework that regulates amalgamations, requiring judicial oversight primarily through the National Company Law Tribunal (NCLT). This framework aims to uphold principles of transparency, fairness, and tax neutrality while facilitating efficient corporate reorganization. However, practical challenges such as procedural delays, conflicting stakeholder interests, and diverse judicial interpretations continue to influence the landscape. This article explores the legal architecture and tax implications of amalgamations in India, examining legislative provisions, regulatory roles, judicial pronouncements, and existing challenges to offer a comprehensive understanding of this critical aspect of corporate restructuring.

With the continued growth of the tourism industry, increasing attention has been devoted in recent years to how tourist cities should formulate appropriate tourism policies. As a well-known cruise destination in Alaska, Juneau faces the critical challenge of balancing the economic growth generated by tourism with the visitor carrying capacity of the local area, which has become a key concern for local policymakers. This paper develops a GDP growth accounting model based on data on tourism consumption, tax revenue, and government investment. By formulating the maximization of tourism-driven GDP growth as the objective function, the model identifies the optimal number of visitors and the corresponding tax policy for the region, thereby providing concrete policy recommendations for local government decision-making. A sensitivity analysis with respect to the visitor-capacity limit further shows that relaxing the maximum visitor capacity increases both the feasible visitor scale and the upper bound of GDP gains, while the optimal tax policy remains relatively stable in the low-capacity region. These findings provide a quantitative basis for sustainable cruise-tourism management in Juneau and other small port destinations with similar structural characteristics.

Topicality. The modern system of taxation of legal activities in Ukraine is characterized by heterogeneity of approaches and significant legal contradictions, which determines the relevance of a comprehensive study of this issue. The issue of distinguishing the statuses of a lawyer as a self-employed person and an individual entrepreneur is particularly acute, as well as the lack of a unified position of state bodies on the possibility of applying a simplified taxation system by representatives of the legal profession. The lack of regulation of these aspects creates obstacles to the effective organization of professional activities of lawyers and requires scientific substantiation of ways to improve the regulatory framework. Aim and tasks. The purpose of the study is a systematic analysis of approaches to taxation of legal activities in Ukraine, identification of key legal conflicts and justification of the need for legislative changes. To achieve the goal, a range of tasks have been outlined: to examine the legal status of a lawyer depending on the organizational form of activity, to analyze the positions of tax authorities and judicial practice, to compare the national approach with European models, and to formulate specific proposals for eliminating contradictions in tax regulation. Materials and Мethods. The materials of the study were regulatory legal acts, judicial practice, official explanations of regulatory authorities and scientific publications. The work used methods of comparative legal analysis, a systematic approach, a formal-logical method and analysis of judicial practice, which ensured the comprehensiveness and scientific validity of the conclusions. Research results. The study found that legal practice is legally classified as an independent professional activity, but in practice it has different tax accounting models. A key conflict was identified between the approaches of the State Tax Service, which denies the possibility of lawyers using the simplified taxation system, and established judicial practice, which recognizes such a right provided that the lawyer is registered as an individual entrepreneur with the sign of conducting independent professional activities. The comparison with European experience showed the presence of flexible systems of taxation of independent professions, including the models of Poland, Germany, France and other EU countries, which take into account the specifics of professional activity and provide the opportunity to choose the optimal taxation regime. Conclusion. The article substantiates the need for the legislative introduction of the category of "liberal professions", unification of approaches to tax accounting of legal activities and adaptation of European principles to the national legal system. The proposed changes are aimed at eliminating legal uncertainty, ensuring compliance of the Ukrainian taxation model with modern European standards.

This study aims to analyze the implications of Indonesia’s fiscal decentralization system on the taxation of food and beverage consumption in the era of digital economy transformation, particularly through online food delivery platforms. The rapid development of the digital economy has shifted traditional consumption behavior toward digital transactions, creating new business models such as Ghost Kitchen or Cloud Kitchen. This phenomenon challenges the existing tax system, especially the division of taxing authority between the central and local governments, namely, the value added tax (VAT) at 11% and local tax on certain goods and services (PBJT) at 10%. The research employs a descriptive qualitative method using content analysis of Indonesian tax regulations related to food and beverage consumption taxation. The findings show that digital business models have blurred administrative boundaries, complicating the determination of tax jurisdiction and resulting in overlaps between VAT and PBJT objects. This overlap causes potential revenue leakage, double taxation, and distortion in consumption decisions, as taxpayers may prefer the lower tax rate. The study highlights the need for policy harmonization that maintains tax neutrality while accommodating technological disruption. The results are expected to contribute to the formulation of a more integrated tax policy between central and local governments, ensuring fair and efficient revenue allocation in Indonesia’s evolving digital economy.

Abstract Ensuring high tax compliance is one of the key objectives of every tax system. Yet, while tax non‐compliance is known to be significant among small and medium‐sized enterprises (SMEs), the motivations underlying it remain surprisingly underexplored, particularly in the context of developing countries. This article introduces a novel theoretical framework for understanding the tax morale of corporate taxpayers, identifying five endogenous and six exogenous motivations for tax (non‐)compliance. The proposed framework is informed by an innovative methodological approach using a triangulation of primary data, including 42 interviews and 86 court cases, with a focus on value‐added tax and corporate income tax. This article addresses for the first time a crucial question: why is compliance with tax law among SMEs so low, particularly in developing countries? It empirically demonstrates that SMEs’ tax behaviour is influenced by psychological factors, identifying the existence of corporate tax morale that prima facie runs counter to both the legal fiction that holds that SMEs are separate legal entities and the standard tax policy assumption that VAT is a full neutral tax for businesses.

Abstract This paper investigates a novel behavioral feature of recursive preferences: aversion to risks that persist over time, or simply correlation aversion. Greater persistence provides information about future consumption but reduces opportunities to hedge consumption risk. I show that, for recursive preferences that exhibit a preference for early resolution of uncertainty, correlation aversion is equivalent to increasing relative risk aversion. To quantify correlation aversion, I develop the concept of the persistence premium, which measures how much an individual is willing to pay to eliminate persistence in consumption. I provide an approximation of the persistence premium in the spirit of Arrow–Pratt, which provides a quantitative representation of the trade-off between information and hedging. I show that correlation-averse preferences have a variational representation, linking correlation aversion to concerns about model misspecification. I present several applications. I first illustrate how correlation aversion shapes portfolio choices, and then show how the persistence premium can improve the calibration of macro-finance models. In an optimal taxation model, I show that recursive preferences—unlike standard preferences—lead to redistributive tax policies that increase social mobility.

ABSTRACT This study examines the nonlinear effects of fiscal policy on economic growth in sub-Saharan Africa by jointly analysing taxation and productive public investment. Using annual data for 36 countries from 1981–2020 and a System-GMM approach, the results validate the BARS-curve hypothesis for both instruments. Growth-maximizing levels are about 21% of GDP for the tax burden and 12–12.5% for public investment. Incorporating the budget balance shifts these thresholds: higher deficits raise the optimal tax rate but lower the optimal investment rate. Overall, the findings highlight persistent undertaxation and insufficient productive spending across the region.

The genesis of the regulatory and legal mechanism of state regulation of transfer pricing in Ukraine reflects profound transformations of the national economic system caused by the transition from an administrative-command to a market-oriented model of economic management, as well as by the country’s gradual integration into the global economic and tax environment. For a long time, transfer pricing remained outside the focus of state regulatory priorities due to limited cross-border activity, weak institutional capacity, and the predominance of short-term fiscal objectives. However, the expansion of multinational business structures, the growing scale of intra-group transactions, and the risks of tax base erosion necessitated a conceptual rethinking of approaches to tax control and regulatory intervention in pricing between related parties. Purpose. The purpose of the article is to provide a comprehensive scientific understanding of the genesis of the regulatory and legal mechanism of state regulation of transfer pricing in Ukraine in the context of the evolution of the national tax system and the country’s integration into the international tax space. Methods. The research is based on a combination of general scientific and special methods, including the historical method to analyze the stages of formation and transformation of transfer pricing regulation, the institutional approach to assess changes in regulatory paradigms, comparative analysis to identify the convergence of Ukrainian legislation with international standards, and the method of scientific generalization to formulate theoretical conclusions. Results. The study reveals the evolution of transfer pricing regulation in Ukraine from fragmentary and indirect control based on the concept of «ordinary price» to an institutionalized, risk-oriented regulatory mechanism grounded in the arm’s length principle. It is shown that the adoption of the Tax Code of Ukraine became a critical turning point that enabled the implementation of specialized transfer pricing instruments, including the identification of controlled transactions, the formalization of pricing methods, and the introduction of documentation requirements. Particular attention is paid to the impact of international initiatives, especially the BEPS Action Plan, which significantly complicated and deepened the national transfer pricing framework through enhanced transparency, functional analysis, and multi-tiered reporting. The adaptive and evolutionary nature of regulatory changes is substantiated, demonstrating their reactive response to emerging tax planning practices and global economic transformations. Conclusion. It is concluded that the contemporary regulatory and legal mechanism of transfer pricing in Ukraine has evolved from a predominantly fiscal tool into a complex element of tax policy aimed at ensuring tax fairness, transparency, and alignment with international standards. At the same time, the increasing complexity and dynamism of regulation highlight the need for further theoretical and applied research focused on balancing fiscal interests with tax neutrality, stability, and proportionality in the context of digitalization, the growing role of intangible assets, and ongoing globalization processes.

This article analyzes the compliance of fiscal reforms implemented within the framework of the “Uzbekistan – 2030” strategy with the principles of inclusiveness. The study examines the role of tax policy in ensuring a balance between economic efficiency and social justice based on James Mirrlees’ optimal taxation theory and contemporary empirical data. The article evaluates the macroeconomic impact of changes in the 2025 Tax Code, particularly the progressive social tax rates and mechanisms for legalizing the shadow economy. The results indicate that Uzbekistan’s tax system, while maintaining fiscal stability, is transitioning toward an inclusive model aimed at developing human capital and mitigating income inequality

We analyze how private decisions and optimal public policies are shaped by personal and societal preferences, material incentives, and social norms. We show how honor and stigma interact with incentives and derive optimal taxation. We then analyze the expressive role of law as embodying society’s values and identify when it calls for a weakening or a strengthening of incentives. The law should be softened when it signals agents’ general willingness to contribute to the public good and toughened when it signals social externalities. We also shed light on norms-based interventions, societies’ resistance to economists’ messages, and the avoidance of cruel and unusual punishments.

The aim of this article is to analyze the relationship between the corporate income tax rate and net tax revenues in Slovakia and the Czech Republic using the Laffer curve concept. Based on data on actual tax revenues and their discounting to net present value, a quadratic regression analysis was created that takes into account the assumed parabolic relationship between the tax rate and tax revenues. The optimal tax rate was identified as approximately 17.64% for Slovakia and 26.12% for the Czech Republic. The results confirm the nonlinear nature of the relationship and suggest that excessive tax increases can reduce business motivation, encourage tax optimization, and threaten the competitiveness of the economy. The analysis emphasizes the importance of optimizing tax policy not only to maximize government revenues, but also to support investment and long-term sustainable economic growth.

Should optimal income taxation change when firms have market power? We analyze how the planner can optimally tax labor income of workers and profits of entrepreneurs. We derive optimal tax rates that depend on markups and identify four distinct components: the Mirrleesian incentive effect, the Pigouvian tax correction of the negative externality of market power, redistribution through altered factor prices, and reallocation of output toward the most productive firms. We quantify the optimal tax for the US economy and provide concrete proposals how to use income taxation to redistribute income while incentivizing production in the presence of market power. (JEL D24, D31, D43, H21, H23, H24, H25)

When Should the Legal System Help Redistribute Income?

This paper studies income inequality and optimal taxation policies in a talent‐to‐task assignment model of self‐selection. Our model considers relative capital‐skill complementarities across tasks, leading to the polarization of capital and technology by task complexity, which in turn drives the polarization of job and wage growth by talent levels. Regarding optimal tax policy, the wage compression channel remains effective through the trickle‐down effect of subsidizing high‐wage earners and taxing low‐wage earners. Yet, the wage compression channel via capital, corporate, and R&D taxes, aimed at reducing wage inequality, does not operate via a trickle‐down effect. Instead, it works by taxing capital income and R&D investments in high‐task‐complexity sectors while subsidizing those in low‐task‐complex sectors. Moreover, we identify a Pigouvian effect that arises to address spillovers, which modifies the marginal tax rates on labor income, capital income, firm profits, and R&D investments.

The theory of optimal taxation emphasizes that a tax system should reduce market inefficiencies and distortions. This paper examines the relationship between tax revenue and tax burden in Romania for 2006-2022 within the Laffer curve framework. A regression model was developed to estimate the coefficients of the parabola, which are then used to determine its vertex coordinates. The vertex represents the revenue-maximizing value of the tax burden. The relationship between tax burden and total tax revenues is analyzed over a specific period, so the vertex is the revenue-maximizing point within that context. Future conditions may change, and various factors (economic growth, policy changes, etc.) could influence the revenue-maximizing level. A value of the tax burden below the vertex value (a negative deviation) could be related to under-taxation. If the situation shows a positive deviation (above the vertex value), this could be related to over-taxation. The study offers insights into Romanian tax policy and its implications. An excessively high tax burden will increase avoidance behavior, resulting in lower tax revenues. A level that is too low may not generate enough revenue to finance public goods and services. The results could be used to create measures to improve revenue collection without discouraging economic activity.

Public Finance in the Age of AI: A Primer

Taux de taxation optimale et croissance économique : une application empirique au cas du Liban

THE HIDDEN TAX: A FEMINIST'S CRITIQUE OF KENYA'S LEGAL AND FISCAL FRAMEWORK

Almost all of the political and economic indicators of Nepal have been moving very negatively through a sensitively difficult situation, basically because of its electoral delimitation, huge mixed electoral system, and consequently overburdened governing structure, fueled by a lack of good governance. Political instability, bad governance, corruption, public distrust of political leaders, recent People’s Movements—especially the Gen Z movement of 08 September 2025 and People’s Movement of 28 March 2025—toppling of government and formation of a neutral interim government, and announcement of elections without addressing national issues, etc., are certainly not indicators of a brighter political aspect. More than that, the economic indicators have not been signaling any bit of optimism but rather a counterproductive status. The tax load, reaching 19.30% of the country’s GDP in spite of having only 1.89% (6.2% of its total budget) of its GDP as a social security budget, is almost equivalent to the trajectory of 7% of its GDP (Nominal) as the counterproductive tax overload as per Scully and Panthee’s parameters of growth-maximizing optimum tax rate (12.3%) in the year 2024/25, which will surely cross the critical tax overload of 8.2% of the projected GDP (NRs. 6.41 trillion) at the end of this fiscal year 2025/26. The yearly average individual tax load has been 123.5 (NRs. 39807) times higher in the year 2024/25 in comparison to the years 1999/2000 (NRs. 322), whereas the Nepalese yearly average individual tax load is almost 46% (NRs. 39807) higher than the Indian average individual tax load (NRs. 27332) in the same year 2024/25, despite Nepal’s trade-based small economy compared to India’s production-based big economy. The figure of 5.5% - 14% of its GDP has been registered as counterproductive yearly public expenditure each year from 2018 to 2025, as per Rahn’s parameter of growth-maximizing public expenditure (25% of GDP). Approximately 25% of its GDP has been filed as a yearly trade deficit each year. The national debt has been skyrocketing and has already reached the exact figure of 43% (NRs. 2622 billion) of its GDP in the year 2024/25, which means a similar ratio of 7.56% of its GDP’s figure enlisted as counterproductive debt as per the parameters of ideal growth-maximizing national debt (35.44%) of Prasai, and will cross the 15% threat line with the national debt status of 50.23% (NRs. 3217 billion) at the end of this year 2025/26. The average debt burden for each Nepalese individual has reached NRs. 88527 in the year 2024/25 and, if everything remains the same, it will approach NRs. 104251 at the end of this year 2025/26. Thus, the accumulation of all of these economic & political indicators has been indicating a state of crisis. If no intervention is taken in time, it is going to be at the level of a severe crisis. As the fundamental factors for this crisis, such as the “mixed electoral system” and “electoral delimitation,” are directly associated with the “governing structure” and the other remaining factor, such as “lack of good governance,” is—to a significant extent—the byproduct of political instability sourced by this huge “mixed electoral system,” this research has fundamentally focused on the overburdening governing structure of Nepal and mainly offered the varieties of electoral and structural reformative interventions, and then good governance and other specialized interventional initiatives. And now, it is up to the government to decide which specific interventional option to pursue based on their priorities.