Personal Income Tax Research Articles

Contribution of Tax Reform on Reduction of Tax Evasion in Rwanda

The study aimed to explore the contribution of tax reform on reduction of tax evasion in Rwanda, guided by objectives to examine contribution of personal income tax reform, identify contribution of corporate income tax reform and assess contribution of value added tax reform. The research design was qualitative, targeting 2700 taxpayers were from Rubengera sector. The systematic sampling method are taxpayer, resulting in a sample size of 348 respondents drawn using purposive sampling. Close ended/structured questionnaires were used to primary data, which was then analyzed using the Statistical Package for Social Science (SPSS). The data was analyzed the findings of using both descriptive and inferential statistics show a strong and positive association between tax reform and tax evasion at personal income tax reform (PIT) will help with reduction of tax evasion with the mean score is notably higher at 2.74, indicating a more positive perception of the reform's effectiveness. Still, the wider standard deviation of 1.404 suggests greater variability, corporate income tax reform (CIT) combined with value added tax(VAT) will help with reduction of tax evasion with no significant correlation between VAT reforms and corporate income tax reforms or their effectiveness and the corporate income tax reform (CIT) respondents gave an average score of 2.73 on the effectiveness of these reforms in reducing tax evasion, with a standard deviation of 1.422, indicating variability in opinions. The results show that the study stated that tax reforms reduced tax evasion significantly and made the following recommendations: The Rwanda Revenue Authority (RRA) should offer comprehensive training to all taxpayers, focusing particularly on educating them about the substantial changes resulting from the tax reforms, especially the new requirements and their perceptions of the impact and effectiveness of these reforms in curbing tax evasion. The consistent nature of these results emphasizes the importance of considering a variety of viewpoints when assessing the outcomes of tax reform efforts. To ensure the continuous effectiveness of Rwanda's tax system, it's imperative to regularly review and adjust it in accordance with the current economic landscape. The study's findings underscore the substantial impact of tax reforms on reducing tax evasion. The research concludes by suggesting further investigations to evaluate the influence of tax reform on tax revenue contribution in Rwanda.

Международный опыт подоходного налогообложения физических лиц и направления совершенствования налоговой системы Российской Федерации

The article examines the international experience of personal income taxation in developed countries such as the United States of America (USA), the United Kingdom, Japan, China, Australia, Canada, and Germany. The study was conducted using general scientific methods of cognition, including observation, comparison, data collection and analysis, deduction, and induction. The sources of information for the study were regulatory and legislative acts, as well as electronic resources. The main findings include reform of the personal income tax (PIT), aimed at increasing revenues, but not too heavy a tax burden for taxpayers and ensuring fairness, is a matter of concern at present. The study of tax systems in other countries allows us to identify effective approaches to the development and implementation of tax reforms, as well as to avoid mistakes made in other states.

IT SECTOR TAXATION IN UKRAINE: FEATURES AND CURRENT TRENDS

IT SECTOR TAXATION IN UKRAINE: FEATURES AND CURRENT TRENDS

Tax optimisation in the tax risk management process. Tax-legal analysis and selected managerial issues

ObjectivesThe aim of the article is to theoretically present ways of legally optimising the taxation of entrepreneurs' income, by using the appropriate construction of legal regulations and legal and organisational forms of business. The issues of tax risk in the context of tax management are also presented. The goal of management is to reduce economic risk and to protect against its consequences.Material and methodsResearch in the social sciences, is inspired by numerous and diverse needs. Therefore, we will reduce the existing needs to two main types, to which certain types of research correspond. The first is combined with needs of a theoretical or cognitive nature, that is, it includes all those needs that are associated with the development of a particular science. The second is combined with the various needs of practice.ResultsIncome taxes also have a negative impact on the assets (equity) of entrepreneurs. The reduction in wealth results from the burdening of entrepreneurs with both wealth taxes and corporate income tax in the case of capital companies and, in the case of partnerships, with personal income tax for distributions made to partners.ConclusionsBoth of these risks describe a potential reality, i.e. the possibility of coming into conflict with the tax authorities. Their realisation is random, with the so-called double randomness - both the timing of the event (conflict) and its depth, i.e. the consequences, are unknown. These effects are mainly financial (arrears incurred, financial sanctions, etc.), although loss of credibility, for example, may also be involved. Importantly, both risks are linked to uncertainty, but each with a different one. Speculative risk is linked to the uncertainty of whether an illegal act will come to light.

ANALYSIS OF TAX COURT APPEAL DECISIONS ON INDIVIDUAL INCOME TAX ARTICLE 25/29 DISPUTES 2019 TO 2022

This research aims to analyze the development of Individual Income Tax (Pajak Penghasilan Orang Pribadi - PPh OP) disputes in the Tax Court, the characteristics of Individual Taxpayers (Wajib Pajak Orang Pribadi - WPOP) who file Individual Income Tax disputes in the Tax Court, and the factors causing Individual Income Tax Article 25/29 disputes. The research was conducted using the content analysis method. The results show that the development of the Personal Income Tax Article 25/29 decision in the period 2019 to 2022 in the Tax Court is as follows: experiencing an upward trend, based on the tax year appealed tends to experience a fluctuating trend, more in favor of the DGT, and 59.18% of the dispute value is below 4.8 billion rupiah. The characteristics of taxpayers who filed disputes are as follows: 86% are male, 21 taxpayers are identified as private employees, 21 taxpayers reside in DKI Jakarta, and during the trial at the Tax Court, 42 taxpayers used legal counsel. Disputes on Income Tax Article 25/29 (PPh OP) from 2019 to 2022 can be classified into two major classifications, namely formal and material disputes. Formal disputes are caused by the Appellant not knowing the fulfillment of tax obligations properly and correctly, the Appellant making mistakes / mistakes in filling out the tax return, and the Appellant not carrying out tax obligations. Meanwhile, in material disputes, the three biggest causes related to net disputes were caused by the absence of adequate evidence of mutations in the Appellant's account, differences in views and evidence in relation to share transactions, and the status of asset ownership.
 
 Keywords: Tax Court, Tax Court Decision, Tax Dispute, PPh OP, Individual Income Tax Article 25/29

Legal regulation of formation of budgets of united territorial communities as key subjects of local self-government

This article is devoted to the study of certain aspects of the formation of local self-government budgets, namely united territorial hromadas. It is summarized that the armed actions of the aggressor led to a deep economic crisis in Ukraine, which affected the financial capacity of the state as a whole and local self-government bodies, in particular.
 Attention is focused on the fact that with the beginning of a full-scale invasion, the process of approving the budget of local self-government has undergone certain changes: the heads of the respective territorial communities can dispose of the funds of local budgets only in the territory where hostilities are not conducted and the military administration of the settlement (settlements) is not formed. The amendments to the Budget Code of Ukraine related to the payment of personal income tax by military personnel are analyzed. Attention is paid to the content of these innovations, namely, to direct to the state budget revenues from the paid tax on the income of an individual from payers- military personnel. It is noted that these changes should contribute to a more efficient distribution of financial resources, in particular, to influence the state's ability to purchase drones and weapons to ensure the country's defense capability.
 Particular attention was paid to the issues of formation of local budgets, their distribution and use. It is emphasized that the process of decentralization of power, proposed by the government to meet the financial needs of hromadas, is based on local budgets, which will ensure financial independence and personalize responsibility for the consequences of ineffective management of local finances. It is emphasized that the successor of the property and duties of territorial communities are the communities themselves, but according to the innovations, the remaining funds received from the community budget over the past year will be directed to activities related to Russia's armed aggression against Ukraine.
 The article focuses on the importance of ensuring transparency in spending budget funds and the right of communities to establish their own mandatory procedures for ensuring publicity in managing local finances.

The Dynamics of Inequality and Mobility: A Panel Data Analysis of the Spanish Income Tax

AbstractObjectiveThis article aims to analyze the evolution of income inequality and mobility in Spain during the period 1999–2011 by exploiting data from personal income tax returns.MethodsTo assess the evolution of inequality over the period analyzed, we have used some of the many metrics developed for this purpose, each of which offers a different approach depending on the segment of the income distribution they focus on (Gini coefficient, income shares, generalized entropy index, and the Atkinson class of measures).ResultsOur results suggest that, after a period of slightly declining income inequality, Spain experienced a rise in inequality in the years immediately preceding the Great Recession, before falling back to precrisis levels. With regard to income mobility, during this period, it was more common for individuals in the middle of the distribution to experience changes, while those at the top and bottom maintained a more stable position.ConclusionsThe economic boom of the late 1990s and early 2000s, as well as the Great Recession, had a significant impact on income inequality and mobility.

A Kingdom of Possibility

A Kingdom of Possibility

Правовое регулирование доходов, полученных от проведения лотерей

The article examines the modern and retrospective regulation of relations in the field of lottery, which is a source of revenue for the budgets of the Russian Federation. The authors conclude that the income received by the state from conducting lotteries is divided into a) tax income arising from the payment of tax by individuals upon receipt of winnings (personal income tax, and income tax from payment by lottery operators and distributors; b) non-tax income generated by mandatory target deductions and unclaimed winnings. It is also emphasized that the field of activity under consideration, which is profitable for the state, requires adjustments in terms of making changes to both tax legislation and budget legislation in terms of establishing fair amounts of targeted deductions to perform state functions for the development of physical culture and sports in the Russian Federation.

Comparison of essential indicators related to the personal income tax burden in the EU countries

Agriculture performs productive functions and is an essential provider of job opportunities. The labour force is one of the important factors affecting agricultural and food production. In general, the business environment affects, among other things, employers' and employees' personal income tax burden. Increasing the efficiency of business activity is inevitably associated with achieving the lowest possible costs. It can be concluded that labor and other personal costs represent, on average, 30-60% of the costs of the agricultural product. In general, taxation of individuals engaged in agriculture with personal income tax does not differ from taxation of individual's income in other sectors of the national economy. The paper focuses on assessing indicators related to the personal income tax burden in the EU countries for the years 2008-2020 based on the data from the Eurostat Tax Classification presented by descriptive characteristics. Achieved results are compared within the EU Member States and for particular countries with an EU-27 average. The West EU countries implement tax and fiscal policies compared to the East EU countries, which are not subject to significant changes in the tax system and thus ensure relatively stable tax revenues to public budgets regarding total taxes and employment income, including unchanged personal income tax rates. The East EU countries declare a lower tax burden of personal income tax. Still, due to the competitiveness of the countries, this burden is also being gradually reduced in the reviewed period in the case of the West EU countries, thus bringing closer unification of the tax policies. Slovakia achieved below-average values of all assessed indicators and at the same time high variability.

Cryptocurrencies, Tax Ignorance and Tax Noncompliance in Direct Taxation: Spanish Empirical Evidence

This article highlights the complexity of taxation surrounding cryptocurrency transactions due to the lack of uniform regulation, creating uncertainty for both taxpayers and tax authorities. After determining the tax obligations of individuals in taxation, a survey has been conducted to assess the level of knowledge and compliance with tax obligations related to cryptocurrencies. The survey, in which 103 people participated, reveals the confusion and errors that prevail in perceptions of the tax obligations for cryptocurrencies, particularly in transactions such as swapping and staking in personal income tax. This results in almost half of the respondents (49.5%) not declaring any of their operations with cryptocurrencies. The reasons for this include the fact that the majority of respondents (66%) find the regulation of cryptocurrencies in Spain confusing and difficult to understand. Additionally, 87.4% believe that tax agencies should provide more information and resources on the taxation of cryptocurrencies and digital assets, and that there should be clearer and more comprehensive regulation. However, it should be noted that 41.7% also consider that tax regulation discourages investment in cryptocurrencies.

Assessment of Tax Risks Arising from Personal Income Tax Agents

Personal income tax (PIT) is one of the budget-forming taxes in the Russian Federation, therefore, an important direction of tax planning is the assessment of risks arising from both tax agents (at the micro level) and the state represented by tax authorities (at the macro level). The subject of the study is tax risks on personal income tax, and the purpose is to develop proposals for their assessment and reduction. Objectives: to classify tax risks according to personal income tax; to clarify the quantitative characteristics of tax risks; to identify directions of their decline. The relevance of the study is dictated by the need to study theoretical issues and practical aspects of the emergence of tax risks on personal income tax. The main methods of study are systemic, logical, theoretical cognition, scientific abstraction. The results of the study include the following: identification of the main types of tax risks for personal income tax and the development of a tax risks matrix for their assessment depending on residence, type of contract, amount of payment, court decisions, taking into account the possibility of identification, determination of amount of risk (arrears and penalties as well as intention). Conclusions: in the paper developed proposals for the assessment and reduction of tax risks under personal income tax: on the basis of the classification of tax risk (by subject, by basis of occurrence, by elements of taxation, by connection with tax checks, by types of risks, by the time of identification of tax risk, as well as taking into account the regional specifics) the amount of possible tax risk is calculated on the example of specific income (premium, financial assistance, gift) a tax risk matrix has been developed for practical application, which will enable to assess and rank tax schemes aimed at reducing tax obligations under personal income tax.

Important notes for 2023 Personal Income Tax: Including Comprehensive Income Tax and Alternative Minimum Tax

Important notes for 2023 Personal Income Tax: Including Comprehensive Income Tax and Alternative Minimum Tax

Ograniczenia budżetowe gospodarstw domowych w Polsce – analiza z wykorzystaniem EUROMOD-u

The following important changes affecting Polish households’ disposable income were introduced in 2022: the personal income tax (PIT) threshold was increased and its rate lowered, the tax exempt amount was raised, the possibility of deducting health insurance contributions from PIT was abolished, and the rules for granting housing allowance were modified. The aim of the research discussed in the paper was to determine the total direct impact of the above-mentioned changes on the amount of disposable income of a single parent and an individual managing a one-person household. The research was based on the EUROMOD tax-benefit microsimulation model and the hypothetical household method. A comparison of the budget constraints of July 2021 and July 2022 shows a decrease in real disposable income among low-skilled part-time workers or those working part of the year. It was found that the changes introduced in the area of housing allowance eligibility may have negatively affected the income of individuals living in one-person households receiving wages of less than 40% of the average salary. The lack of indexation of benefits is also observed to have had a negative impact on single parents’ income.

Determinants of Revenue of Personal Income Tax at KPP Pratama Cibitung: A Perspective of Attribution Theory

This research seeks to examine the impact of NPWP ownership obligations, tax audits, tax collection, and taxpayer awareness on the generation of tax revenues. The participants in this investigation were employees from the tax sector at KPP Pratama Cibitung, with a sample size of 100 tax employees selected through convenience sampling. Utilizing primary data collected through questionnaires, the study employed multiple linear regression tests conducted using SPSS Version 21 software to analyze and test hypotheses. The findings revealed that NPWP ownership obligations, tax audits, tax collection, and taxpayer awareness all demonstrated a noteworthy and positive influence on the receipts of personal income tax

A fistful of dollars: Rent seeking behaviour and local tax manipulation

The aim of this paper is to study whether politicians manipulate tax policy to extract private rents. We focus on the local personal income tax in the setting of Italian cities, which is a progressive instrument that allows mayors to set different rates to distinct wage groups. We exploit discontinuities in mayors' salaries, that are based on population thresholds, to study whether mayors apply lower rates to their own tax bracket, thereby distorting tax policy. The main results document large rent-seeking activity in tax policy. First, we show that when mayors's salary is exogenously located in the following tax bracket it receives a significantly lower tax rate than the previous one, compared to the control group. Second, we show that this rent-seeking activity is highly detrimental for the public treasury, with a considerable reduction in fiscal revenues. And finally, we document that the individual gain for rent-seeker politicians is rather limited and that there is no evidence of voters' punishment in the next elections. These results suggest that when tax policy is prone to be manipulated politicians do not hesitate to engage in rent-seeking activities even in case of little returns.

An MMT Informed Fiscal Reform for China

Employing the Modern Monetary Theory (MMT), this paper examines the current Chinese fiscal system and highlights its three characteristics. First, fiscal revenues are centralized at the central government while expenditures are decentralized at the local governments; second, fiscal spending focuses on public investment but is insufficient in providing social safety net and public services; and third, indirect tax accounts for a great majority of tax revenues, leading to limited progressivity of the tax system. These limitations have constrained the effectiveness of China’s fiscal policies and generated many perverse impacts. With the understanding that the central government has the monetary sovereignty and does not face financing constrained and that taxes are not to raise revenues for fiscal spending but to serve other purposes, the paper calls for fiscal reforms that realign fiscal resources and spending responsibilities between the central and local governments, increase fiscal spending on social security and public services, as well as broaden personal income tax to improve the distributive effect of taxation.

The principle of contributory capacity and the non-correction of the personal income tax table

The tax issue in Brazil is marked by intense discussions, especially regarding tax reform, due to conflicts of interest between the application of taxes and the state's funding needs. The search for a fair and coherent taxation system that respects principles such as equality and contributive capacity is a constant challenge. The Income Tax, a federal tax established in the 1988 Constitution, is governed by the principles of generality, universality, and progressivity, affecting profits from business activities and personal income. The legislation advocates for the progressive application of rates, aiming at fiscal justice and the reduction of social inequalities. However, the last update to the calculation bases for the Personal Income Tax (IRPF) occurred in 2015, and the lack of monetary correction since then has raised questions about the offense to the principle of contributive capacity, due to the disregard for inflation and the decrease in citizens' purchasing power.

Socially fair improvement of taxation of income and property of individuals in the Russian Federation

The object of the study is the taxation of income and property of individuals. The subject of the study is the socially fair improvement of taxation of income and property of individuals. The article presents specific recommendations for socially fair improvement of taxation of income and property of individuals in the Russian Federation. Particular attention is paid to the substantiation of the proposal to introduce a progressive tax scale for personal income tax. The article presents recommendations aimed at increasing the income of regional and local budgets from the collection of the taxes in question, as well as increasing the tax culture of citizens and reducing the number of road accidents. When conducting the research, the author used methods of analysis and synthesis of data (in different forms), induction and deduction. The scientific novelty is associated with the recommendations developed by the author for socially fair improvement of taxation of income and property of individuals in the Russian Federation, which meets the national development goals of the state for the period until 2030 and the list of instructions for the implementation of the Address to the Federal Assembly of the Russian Federation. The author’s special contribution to the study of the topic is the author’s proposed scale of progressive taxation of personal income (assuming the use of tax rates in the range of 13%–21%), the practical implementation of which will allow mobilizing about 1 trillion rubles. Recommendations for modernizing the taxation of property of individuals (including land and transport) have also been formulated. The materials of this study can be used in the practical activities of the Government of Russia, the Ministry of Finance of Russia, the Federal Tax Service, the Federal Assembly of the Russian Federation, as well as in organizations of higher and secondary vocational education.

Designing the optimal personal income tax in using a microsimulation model

Designing the optimal personal income tax in using a microsimulation model