Tax Reduction Research Articles

China's local government debt and firm tax burden

We establish a relationship between China's local government debt (LGD) and the tax burden on firms. Using datasets of LGD and listed firms from 2009 to 2021, we find that LGD significantly reduces firm tax burden. The tax reduction effect of LGD is particularly pronounced in regions with business-friendly environments and lower fiscal pressure, and is more evident among state-owned enterprises (SOEs) and less-profitable firms. We also find that new government bonds demonstrate a stronger effect on reducing firm tax burden than refinancing bonds do. The strategic growth of LGD can be meaningfully applied to stimulate firm and regional growth.

Extinction of the Cause for Reduction and Exemption of Land Value Tax and Its Attribution of Responsibilities: An Analysis of High Administrative Litigation Division of Taipei High Administrative Court Judgment (112) Su Tze No. 14

Extinction of the Cause for Reduction and Exemption of Land Value Tax and Its Attribution of Responsibilities: An Analysis of High Administrative Litigation Division of Taipei High Administrative Court Judgment (112) Su Tze No. 14

Consumer Prices in German Food E‐Retailing: the Impact of the Value Added Tax Cut in 2020

SummaryIn July 2020, the German government reduced the VAT rate for six months in order to stimulate private consumption and support the economy, which had been weakened by the Covid‐19 pandemic. It was crucial for the success of the tax cut that retailers passed it on to consumers by reducing retail prices. This article applies a fixed effects estimation model to analyse the price effects of the VAT reduction in grocery e‐retailing. It uses price data collected directly from the websites for major food categories of four food e‐retailers, Bringmeister, MyTime, Real and Rewe. The tax reduction overall was largely passed on to consumers by price reductions. However, the pass‐through rates, i.e. the extent to which the tax rate change was translated into lower prices, varied among the stores, ranging from 16 to 134 per cent, with the highest rate being for Bringmeister. The pass‐through rate for Rewe was 84 per cent. Also, the timing of the pass‐through varies. The highly divergent pass‐through rates were below the expectations of politicians and the announcements made in advance by food retailers, suggesting some strategic pricing within and between stores. For future VAT reduction initiatives, the results of this study and consumers' reactions to price changes should be considered in more detail in order to complete the assessment of the effectiveness of such measures.

ATTRACTING PRIVATE INVESTMENT IN PUBLIC-PRIVATE-PARTNERSHIP: TAX REDUCTION OR RISK SHARING

With the financial burden of government increasing, the Public-Private-Partnership (PPP) model has become an alternative method to develop public infrastructure. To efficiently promote the private sector to participate in PPP, making a proper incentive policy is critical for the government. This paper examined the effects of two governmental support policies, i.e., tax reduction and risk-sharing, on the investment decision of the private sector, and further compared the relative efficacy of these two policies. The results manifest that: first, both tax reduction and risk-sharing policies motivate private sector to invest earlier; second, although the capital structure decision of the private sector is free from the influence of the risk-sharing policy, the optimal debt level under tax reduction policy shows a U-shape relationship with the incentive ratio; third, when completion risk is large, there exists efficiency loss for total benefits of the project under the risk-sharing incentive policy. Besides, the efficacy of two incentive policies varies depending on the scenario. Firstly, given the same incentive ratio, the risk-sharing policy proves to be more effective than the tax reduction policy. Secondly, when considering the same level of incentive loss for government, tax reduction policy outperforms than risk-sharing policy in terms of efficacy. Thirdly, the efficacy of these policies also depends on the completion risk level: under small completion risk, risk-sharing policy is more effective, whereas under large completion risk, the tax reduction policy takes precedence. Based on these findings, some managerial insights that could assist government in formulating more effective incentive policies are proposed.

신라 尼師今 시기 왕권의 추이

This article examines the transition of royal authority during the Isageum period of Silla, with a focus on the king’s ruling activities. Special attention is given to actions directed toward officials and commoners. During this period, officials were rewarded for their military achievements, and there were also instances of punishment.. This examination reveals that during the Isageum period, the king aimed to assert his position as the supreme military commander by rewarding and punishing officials. During the Isageum period of Silla, disasters occurred frequently, leading to various damages. However, the response to these disasters was not proactive. Although droughts and floods occurred frequently, effective responsive measures such as promotions or tax reductions were rarely implemented. During this period, there were efforts by the king to stabilize the livelihood of the people through agricultural encouragement policies but these efforts also had certain limitations. This can be inferred from the inadequate response to disasters that harmed the people after the king’s agricultural encouragement measures were implemented through royal decrees.

Exploring Tax Strategies: Leverage and Firm Size Effect in Manufacturing Firms

The purpose of this study is to examine how leverage and firm size affect tax evasion in manufacturing companies that are listed on the Indonesia Stock Exchange (IDX) between 2021 and 2023. The lawful use of tax laws to lower tax obligations is known as tax avoidance. This practice has a substantial impact on state revenue, particularly in Indonesia where tax receipts are rising but the tax ratio stays low. Secondary data from financial reports of industrial firms is used in this study. By calculating business size using the natural logarithm of total assets and assessing leverage using the debt-to-asset ratio (DAR), it applies quantitative research approaches. The research results show that leverage has a significant influence on tax avoidance, where firms with higher levels of debt tend to carry out more tax reduction strategies because of the tax deduction from interest expenses. In contrast, firm size does not show a significant effect on tax avoidance, indicating that both large and small firms adopt similar tax avoidance measures. Managerial implications These findings emphasize the importance of regulatory oversight of corporate leverage and considering firm size in designing tax policies aimed at minimizing tax avoidance practices.

Fiscal Policy to Encourage Investment in the Marine Logistics Sector

The marine logistics sector plays a crucial role in a country's economic growth, particularly for archipelagic nations like Indonesia. However, investment levels in this sector remain low, which can hinder potential economic growth. This research aims to analyze various fiscal policies that can encourage investment in the marine logistics sector. The methods used in this research are qualitative and quantitative descriptive analysis. The results indicate that fiscal policies such as tax incentives, subsidies, and government funds allocated for maritime infrastructure development can increase the attractiveness of investment in this sector. Tax incentives, such as reductions in corporate income tax rates, exemptions or reductions in import taxes for equipment, and tax allowance facilities, can be effective instruments to attract investment. Subsidies, such as capital assistance, low-interest loans, and operational cost compensation, can also help reduce investment risks and encourage investor participation. Additionally, adequate allocation of government funds for the development of maritime infrastructure, such as ports, docks, and other logistics facilities, is crucial for enhancing the sector's efficiency and competitiveness. However, fiscal policies alone are not enough. Improved regulations and better law enforcement are also necessary to create a conducive investment climate in the marine logistics sector.

Evaluation of the Effect of Tax Reduction and Exemption Policies During the Epidemic

Evaluation of the Effect of Tax Reduction and Exemption Policies During the Epidemic

Key strategies for achieving net-zero carbon buildings and promoting carbon credits in construction markets: A case of an emerging economy

While achieving net-zero carbon buildings (NZCBs) offers significant environmental and economic benefits, particularly in developing economies, research on effective strategies and their interplay with carbon credit systems remains limited. This knowledge gap hinders the widespread adoption of sustainable construction practices and the full potential of carbon markets for incentivizing change. This study aims to bridge this gap by investigating and assessing 15 key strategies for achieving NZCBs and promoting carbon credit implementation. Data from 109 construction professionals in Vietnam was analyzed using several statistical techniques. The results of one-way analysis of variance (ANOVA) and Tukey's post-hoc analysis showed no significant differences in the key strategies for promoting carbon credits among key stakeholders (policymakers, contractors, suppliers, and architects/designers). However, distinct variations were identified in the strategies for achieving NZCBs. Furthermore, the findings revealed that the top-priority strategies for NZCBs included: (1) raising awareness, (2) developing project-specific emission reduction roadmaps, and (3) increasing renewable energy utilization. For promoting carbon credits, the prioritized strategies involved: (1) tax reduction, (2) integrating emission reduction criteria into tender documents, and (3) awarding technical points to contractors with emission reduction solutions. Theoretically, this study breaks new ground by simultaneously examining key strategies for achieving NZCBs and carbon credits implementation within the specific context of an emerging economy. Practically, this paper offers valuable recommendations for Vietnamese policymakers and industry leaders, enabling them to navigate a roadmap for a greener and more sustainable built environment, not just in Vietnam but also in other emerging economies facing similar challenges.

Effect of Input Subsidy Reduction on Greenhouse Emission Reduction Potential in Paddy Production Systems in Karnataka State of India

Increasing concerns and call for reduction in Greenhouse gas (GHG) emission have necessitated the search for broader and all-inclusive policy initiatives, extending into agricultural production, where high carbon energy inputs are used. One classical policy strategy for GHG emission reduction, has been taxation. However, given the critical role of agriculture, especially in developing economies, policies that directly or indirectly increase agricultural inputs costs and reduce their demand require stronger theoretical, conceptual and empirical support to ensure that while agri-environmental quality is promoted, welfare of farming households, food security and overall economic growth are not compromised. Using paddy production in Karnataka state in India, the study assessed effects of agricultural input taxation (reduction in rice input subsidy) on future demand for such inputs and their effect on GHG emission reduction, vis-a-viz production and welfare losses. In microeconomic modelling framework, we applied quadratic almost ideal demand system and stochastic efficiency functions in the analysis of the data. Data for the study, a micro-level farm data, was obtained from Cost of Cultivation Scheme (CSS) for irrigated and non-irrigated production systems, covering the period 2009 -2018 production seasons. Specifically, the study used three future tax regime scenarios- 10%, 20% and 30% input subsidy reduction rates, to model an optimum greenhouse emission reduction potential. The results revealed that inputs evaluated were normal with inelastic demand functions; many input coefficients implied significant complementary relationships; irrigated paddy production system had higher estimates of GHG emissions. Input taxation (reduction in subsidy) under all the three scenarios effectively, resulted in declined inputs consumption patterns, and subsequently led to significant decrease in greenhouse emissions. The highest GHG emission reduction potential was observed in irrigated farming system. Greenhouse emission reduction potential was optimal at moderate subsidy reduction policy rate of 10%. It is recommended that, given the inelastic estimates derived, moderate tax (reduction in subsidy) policy option on inputs would yield effective greenhouse mitigation with appropriate compensation through effective integrative schemes.

Board characteristics and tax planning of quoted companies in Nigeria

This study investigated board characteristics and tax planning among listed companies in Nigeria. It was an ex post facto type of research with a quantitative design covering a longitudinal time frame of five years (2017-2021). The data were analysed using panel regression (random and fixed effects). The outcomes of the study showed that board size and board gender diversity have no significant influence and exert a negative relationship with tax planning among firms while board independence and board political connection have significant influence and a positive relationship with the tax planning practices of the firms listed in Nigeria. It suggested that the government should ensure that boards of companies in Nigeria are well constituted with male and female members and those with politically connected members should be well monitored to prevent tax manipulations to the detriment of government tax revenue for expenditures. This study's potential to identify how board political relationships may promote tax aggression among firms. Thus, it will enable tax authorities to watch out for politically connected firms with regards tax reduction. Similarly, it will be a source of referencing material for researchers undertaking topics of this nature.

Understanding the Inequality and Welfare Impacts of Carbon Tax Policies

This paper develops a general equilibrium lifecycle model to explore the welfare and inequality implications of different ways to return carbon tax revenue back to households. We find that the welfare maximizing rebate uses two thirds of carbon-tax revenue to reduce the distortionary tax on capital income while using the remaining one third to increase the progressivity of the labor-income tax. This recycling approach attains higher welfare and more equality than the lump-sum rebate approach preferred by policymakers as well as the approach originally prescribed by economists __ which called exclusively for reductions in distortionary taxes.

THE IMPACT OF THE SHADOW ECONOMY ON THE REDUCTION OF TAX REVENUES TO THE STATE BUDGET

The aim of the study was to assess and analyse the shadowing of the national economy, as well as to determine the impact of its shadowing on the reduction of tax revenues to the state budget. The research employed general scientific, economic, and mathematical assessment methods, such as regression analysis, correlation analysis, interval forecasts, as well as econometric models of Lacko's household electricity approach, as well as modelling of the shadowing level using the multiple indicators-multiple-causes (MIMIC) model. The calculations and analysis gave grounds to determine the level of the shadow economy of Ukraine based on the state statistics of shadowing trends. There is currently an upward trend estimated to be 37.1% of GDP in 2022 compared with international data, which indicates a rapid growth of the shadow economy from 27% in 2019 to 44% in 2022. An alternative method of assessing the shadowing level was proposed in order to level the peculiarities of calculating the level of shadowing of the economy. According to the calculations, it was 43% in 2022. It was determined that the rapid growth of the shadow economy is an indicator of a reduction in tax revenues, especially in 2022 — by almost 8%. The correlation analysis proved that the increased shadowing level is an indicator of the reduction of tax revenues to the budget of Ukraine. The conducted analysis has certain limitations, therefore it is advisable to further test the hypothesis regarding the indicator of tax revenue reduction on a larger range of data and to apply an alternative method of assessing the shadowing level for developed economies, such as the countries of the European Union (EU).

Investigating CSR Disclosures and Aggressive Financial Reporting in Relation to Tax Aggressiveness: Can Board Structure Change The Status Quo?

In recent years, academic researchers and policymakers have increasingly discussed the role of Corporate Social Responsibility (CSR) disclosures and aggressive financial reporting in tax aggressiveness. Tax aggressiveness can be defined as a company's eagerness in using legal loopholes and other methods of tax reduction. Companies must evaluate how their tax practices affect their reputation and adhere to tax reporting and CSR standards. The objective of this research is to investigate in the relationship between CSR disclosures and aggressive financial reporting on tax aggressiveness moderated by board structures. The board's internal control function is expected to reduce tax aggressiveness-related risks. The study employed static panel data regression analyses on 665 firm-year data from the Indonesia Stock Exchange from 2016 to 2020. This study discovered that a larger board size could diminish the negative relationship between CSR disclosure and tax aggressiveness in particular industries while strengthening the positive relationship between aggressive financial reporting and tax aggressiveness. The current work suggests that companies with more independent boards of directors could increase the negative association between CSR disclosure and tax aggressiveness while reducing the positive association between aggressive financial reporting and tax aggressiveness. This study could reference future corporate policy regarding the most effective board structures to minimise tax aggressiveness.

How Does Digital Transformation Improve Corporate Carbon Emission Reduction Performance? An Empirical Study on Data from Listed Companies in China

Against the backdrop of global carbon reduction, China, as the country with the highest carbon emissions, must implement carbon reduction actions more efficiently to promote the sustainable development of the global environment. Balancing their economic and environmental benefits has become an important issue for corporations, as they are crucial entities in the final implementation of carbon reduction efforts. This study selects the data of listed companies in China from 2012 to 2022 and develops a two-way fixed-effects model to verify the effect of digital transformation on corporate carbon reduction performance. The study found that digital transformation can positively promote corporate carbon reduction performance and shows heterogeneity under different conditions. Green technology innovation plays a mediating role in the relationship between digital transformation and corporate carbon reduction performance. Furthermore, environmental subsidies play a positive moderating role in the relationship between digital transformation and green technology innovation, constituting a moderated mediation model. Meanwhile, tax reduction incentives play a positive moderating role in the relationship between digital transformation and promoting corporate carbon reduction performance. This study provides empirical suggestions for balancing economic and environmental benefits for 5323 Chinese listed companies and global corporations from both internal and external perspectives, emphasizing the potential for digital transformation to drive both commercial success and environmental stewardship in the pursuit of sustainable development goals.

Tax Structure of India and Bangladesh: A Comparative Study

This study delves into the tax structures of India and Bangladesh, focusing on key indicators like tax-to-GDP ratio, overall tax payments, time to comply, number of tax payments, and total tax rate. India's total tax rate, though decreasing, still surpasses Bangladesh's, requiring competitiveness for economic growth. Corporate tax reductions aim to attract investments, yet increasing the tax-to-GDP ratio remains a challenge compared to South Asian counterparts. India must balance revenue collection, fairness, and economic growth to improve tax efficiency and support business development for global competitiveness.

Economic–environmental trade-offs based support policy towards optimal planning of wastewater heat recovery

Wastewater heat, a promising alternative to traditional district heating and cooling sources, can be recovered using heat pumps and transmitted to surrounding buildings for winter heating and summer cooling. Despite its potential benefits, the policies to support wastewater heat recovery remain limited. This study provides support policies for local governments to encourage energy recovery in urban wastewater treatment plants, incorporating subsidies and renewable energy certificates. The local government aims to maximize the recovered energy, minimize the subsidy expenditure, and minimize the certificate price. Urban wastewater treatment plants seek to optimize producer profits under realistic planning constraints. This model was applied in Chengdu, China, which indicates that plants with a daily treatment scale exceeding 30,000 m3 can invest in heat recovery without support policies, achieving recovery ratios of only 27%–29%. As the calculated electricity charge accounts for about 90% of operating cost, the electricity price subsidy proves the most significant in improving the installed capacities, followed by renewable energy certificates, capital refunds, and tax reductions. Electricity prices and renewable energy certificates have combination and substitution effects. Further analysis shows that heat pump efficiencies have low sensitivity in project feasibility. Fluctuations in infrastructure costs have a minimal impact, while charges for heating and cooling services significantly influence feasibility. Lowering the available thermal energy ratio also affects project returns. The government can reduce risks in sensitive parameters by electricity price subsidies or renewable energy certificates.

Adapting fiscal strategies to energy and food price shocks in Portugal

Economies that are dependent on imported inputs are vulnerable to external shocks affecting international prices. Although the effects of these shocks have been widely documented in the literature, strategies to effectively mitigate them remain underexplored. Using a recursive-dynamic computable general equilibrium (CGE) model, we examined the impact of global energy and food price shocks on the Portuguese economy. Moreover, we evaluated fiscal policies aimed at mitigating these impacts by boosting consumption through wage increases, cash transfers, consumption subsidies, and revitalizing economic activities with reduction in production tax. The findings suggest that reduction in production tax is the best mitigation option, as it directly improves sectoral competitiveness, promotes employment, and stimulates consumption. In contrast, a consumption-focused fiscal strategy is costlier and exclusively enhances household purchasing power. Notwithstanding, raising wages inadvertently worsens persistent inflation due to increased production costs and demand. Exploring various financing options is necessary to assess policy effectiveness and consistency over time.

Lower taxes at all costs? Evidence from a survey experiment in four European countries

ABSTRACT It is commonly argued that citizens favour lower taxes, thereby exerting pressure for tax reductions that undermine the ability of governments to raise revenues. We argue that the ostensibly strong support for lower taxes is the result of survey measures that fail to account for fiscal trade-offs. An original survey experiment conducted in Germany, Italy, Spain, and the United Kingdom reveals that support for lower taxes declines significantly when this comes into conflict with other fiscal policy objectives, such as government spending, public debt, or other taxes. Overall, regressive changes receive less support than progressive reforms. At the individual level, preferences are shaped by self-interest and ideology, with ideology exerting a predominant influence. Notably, left-leaning, high-income voters exhibit an even stronger inclination to resist tax reductions compared to their low-income counterparts. Our findings challenge the assumption that tax cuts enjoy widespread popularity and suggest the potential for a progressive coalition against tax cuts, encompassing both low-income and affluent left-wing individuals.

PTX Project Implementation in Denmark: Takeaways and Insights

This paper investigates the project implementation of e-fuel production in Denmark to compare two projects and execute interviews with project employees, experts within the e-fuel field and authorities both local and national. A SWOT analysis of the interview outcomes was conducted as well as an internal and external factor evaluation. The analyses highlight the internal and external project factors that impact the implementation of these projects in Denmark. The analysis showed that collaboration and engagement of stakeholders, citizens and authorities to a large extent can mitigate hindrances and drive the projects forward in development. Large interest in these projects from all sides of the project implementation and development is a part of this. A threat to the implementation is the uncertain and rigid regulatory framework that involves permitting processes and conditions such as tax reductions. This threat can to a large extent be aided by the collaboration with stakeholders. The framework is not fit to the novelty of these cases which poses new requirements to the framework. Market readiness and offtake agreements pose obstacles for the projects, which are both external and internal conditions of the projects. The topic of the amount of renewable electricity in the grid is discussed among the interviewees and shows a discrepancy on whether or not this is an issue for the projects. However, it seems to be an issue only for projects that are expected to be in commission before 2028 where the electricity in the grid is not generated by renewable energy only.