Tax Reform Research Articles

Sustainability Affects the Way Ireland Attracts Multinational Corporations and Foreign Direct Investment

This paper explores how sustainability impacts Ireland's ability to futher attract multinational corporations (MNCs) and foreign direct investment (FDI), focusing on academic research, reports, and the Industrial Development Agencys (IDA) 2021-2024 strategy. Historically, Irelands FDI strategy has relied heavily on low corporate tax rates, attracting global giants such as Apple, Google, and Pfizer. However, amid global tax reforms, including the OECDs 15% minimum corporate tax, and rising Environmental, Social, and Governance (ESG) standards, Ireland is undergoing a strategic shift. This study examines how policies like decarbonization, renewable energy investments, and circular economy initiatives position Ireland as a leader in green technology. Additionally, it analyzes global trends and Irelands alignment with the UNs Sustainable Development Goals (SDGs) to meet evolving international demands for sustainability. By adapting its FDI strategy to incorporate these significant changes, Ireland ensures its continued competitiveness as a destination for investment while fostering long-term economic growth and sustainability.

How do Chinese smokers respond to cigarette price? Evidence from a nationwide household survey.

Despite the Chinese government's implementation of tax increases in 2009 and 2015 to curb tobacco use, the anticipated decline in cigarette sales has not materialized. This suggests a need for deeper understanding of smokers' demand behavior. The present study aims to provide a more accurate estimation of the price and income elasticities of cigarettes in China. We utilized Deaton's model to analyze a comprehensive micro-level dataset comprising 10,892 households surveyed in the 2012 wave of China Family Panel Survey, with the aim of estimating the price and income elasticities of cigarette demand, as well as to investigate how these elasticities vary across different income brackets. These resulting elasticities were subsequently integrated into the World Health Organization Tax Simulation Model to simulate the potential impacts of various tax increase scenarios on cigarette consumption and tax revenue. The price elasticity in China hovers around -0.72, with an income elasticity of about 0.23. Heterogeneity analysis indicated that lower-income smokers exhibit greater sensitivity to price changes. Policy simulations suggested that tax increases would substantially reduce consumption while concurrently increasing tax revenue. Chinese smokers exhibited a considerable sensitivity to cigarette prices, underscoring the efficacy of taxation as policy instrument for shaping smoking behavior. As tax reforms continue and cigarette retail prices increase, there lies promising potential for achieving tobacco control goals, generating additional revenue, and improving social equality. A primary contribution of this study is the provision of more reliable estimation of cigarette price and income elasticities in China. These parameters are crucial for assessing the potential impact of tobacco tax increases on cigarette consumption and government revenue. By leveraging a nationally representative survey from 2012 and employing Deaton's identification strategy, we significantly enhanced the data quality and methodological rigor of our analysis, leading to more accurate estimation results compared to previous studies.

Technology adoption and extreme stock risk: Evidence from digital tax reform in China

The digital reform of tax administration occupies a pivotal role due in enhancing governmental governance capabilities in the digital era. We consider China’s “Golden Tax Phase III” project (GTP3P) as a representative digital reform of tax administration. Utilizing a multi-phase DID model, we analyze the impact of GTP3P on the stock market, with a particular focus on corporate stock price crash risk (SPCR). Our findings reveal a significant reduction in SPCR subsequent to the GTP3P implementation. After performing parallel trend test, dealing with endogeneity concerns, and estimating the double machine learning model, we confirm baseline findings again. Heterogeneity analysis indicates that the influences of GTP3P on SPCR is asymmetrical. In the mechanism analysis, we verified that tax administration reform significantly enhances information disclosure, which guarantees a reduction of SPCR. Finally, we perform a further analysis examining investors’ holding preferences. Contrary to expectations, we observed a decrease in stock liquidity and the shareholding of long-term and fund investors, attributed to the escalated tax burden and diminishing business benefits post-reform. This study presents an innovative perspective on the corporate implications of digitization.

Financial Strategies Driving Market Performance During Recession in Nigerian Manufacturing Firms

This study examines the interplay between leverage, dividend policy, and market performance in Nigeria’s manufacturing sector during the economic downturn of 2016–2020. Drawing on signaling and trade-off theories, we investigate how firms balanced leverage and dividend payouts to sustain performance amidst macroeconomic shocks, including currency depreciation, inflation, and weakened consumer demand. Using panel data from 26 Nigerian Stock Exchange-listed firms, the study applies pooled ordinary least squares (POLS) and fixed-effect models (FEM) to analyze the direct and interactive effects of leverage and dividend policy on market performance, controlling for profitability, firm size, and taxation. The findings reveal that leverage generally exerts a negative effect on firm value, particularly long-term debt, which increases financial distress risks. However, the interaction between leverage and dividend payouts positively moderates this relationship, suggesting that firms use dividends strategically to signal stability and mitigate leverage-related risks. Profitability emerges as a key determinant of firm value, while short-term debt provides operational flexibility, and taxation imposes significant financial strain. Larger firms demonstrate greater resilience, benefiting from scale economies and diversified funding sources. This research highlights the importance of an integrative financial strategy during periods of economic uncertainty, emphasizing the complementary roles of leverage and dividend policy in enhancing firm value. The findings offer critical insights for policymakers and corporate managers in emerging markets, advocating for tax reforms and prudent financial management to improve business resilience. By addressing gaps in the literature, this study contributes to the understanding of financial decision-making in developing economies.

The fiscal reckoning of war: Contemporary armed conflict and progressive income taxation

Armed conflicts expose states to extraordinary fiscal stress and leave poverty and inequality in their wake. Yet, the fiscal policy responses in contemporary conflict-affected states appear feeble, in striking contrast to historical antecedents, having led to radical and distinctly progressive tax reforms. Whereas extant literature cautions against generalising Western wartime experiences, emphasising qualitative differences in warfare and institutional context, this article argues for the ex ante generality of the link between war and progressive taxation. Accordingly, it elaborates a revised theory of wartime tax bargaining, centred on fiscal need and demand for fiscal fairness, whereby contemporary conflicts, including civil wars, should induce governments to increase taxes, and particularly on the rich. The apparent absence of war-induced progressive taxation in the last decades, in contrast, is overdetermined by international shifts at the end of the Cold War and its influence on local wartime elites. Statistically analysing newly collected data on top personal income tax rates for all conflict-affected countries 1960–2020, it is shown that the link was strong, general and, contrary to common assumption, applied as much to civil as to interstate wars. The results support the theory, whereby acute revenue needs and war-induced demand for fiscal fairness translate into increased taxes on the rich. The sudden uniform disappearance of the association in the last decades, irrespective of country-level factors, is consistent with an interpretation emphasising global shifts precipitated by the end of the Cold War.

Article: DEBRA: When Unstoppable Aspirations for Debt-Equity Parity Meet Immovable Tax Systems

p class="MsoNormal"Achieving debt-equity parity in corporate taxation has long been a sought-after holy grail in the quest for capital structure neutrality; however, the latter does not always align with the former. The United States devoted significant thought on how to reach both, especially in the 1990s, but eventually did not achieve either with its tax reforms at the dawn of the twenty-first century. o:p/o:pp class="MsoNormal"Now, it is Europe’s turn to try. This is what the European Commission aims to accomplish with its Directive Proposal for a Debt Equity Bias Reduction Allowance (DEBRA). It would introduce a notional interest deduction on increases in a firm’s equity and a dual-limiting rule that would cap deductible interest at 85% of exceeding borrowing costs (interest paid minus interest received) in addition to interest deductibility already being restricted to 30% of a firm’s earnings before interest, taxes, depreciation, and amortization (EBITDA). o:p/o:pp class="MsoNormal"This article shows that DEBRA fails to achieve capital structure neutrality and does not ensure debt-equity parity. It skews the tax treatment of debt without promoting greater diversification in the portfolio choice of financing sources for corporate Europe as European companies remain heavily reliant on bank lending compared to their American counterparts.o:p/o:p p class="MsoNormal" Last, the article suggests that the risk of debt-financing outsourcing as a potential consequence of DEBRA could inadvertently impact direct investments between Europe and some of its main trading partners, including the United States and the United Kingdom. This process is already underway in America with more anti-abuse provisions emerging in its tax treaties and federal tax regulations for the cross-border payment of interest and dividendso:p/o:p

A NOVA ESTRUTURA TRIBUTÁRIA NO BRASIL: PRINCIPAIS MUDANÇAS E SEUS EFEITOS

The New Tax Reform in Brazil represents one of the most significant changes in the fiscal system in recent decades, aiming to simplify taxation, reduce bureaucratic complexity, and foster a more competitive economic environment. This article aims to analyze the main aspects of the reform, highlighting its implications for companies, consumers, and the national economy. The research was conducted through a bibliographic review, using legislative sources, academic articles, and government reports. The results indicate that, despite advances in simplifying the tax system, challenges such as the transition between regimes and taxpayers' adaptation still need to be addressed. It is concluded that the reform brings modernization opportunities, but its effectiveness will depend on efficient implementation and adaptation by economic agents.

DOES TAXATION AFFECT BANKS’ PROFITABILITY: EVIDENCE FROM NIGERIA

Abstract Taxation and tax policy of any economy has a major implication on the growth “and performance of businesses in every economy. fiscal policy instrument should not be rigid for the taxpayers. This is because a flexible and viable taxation system has the capacity to stimulate economic activities. The paper examines how taxation impact the profitability of commercial banks in Nigeria. To test the hypothesis, the paper applied the panel regression on published information from fifteen banks from 2011-2022. The findings reveal that the marginal tax rate, effective tax rate and the average tax rate have strong positive and significant effects on return on asset. The outcome offers corporations useful insights on tax planning strategies properly and show how their tax avoidance skills could be used without practicing tax evasion. Amongst others, the recommends that regulators should grant tax incentives and reforms to reduce the tax burden on companies. Moreso, governments should formulate unequivocal tax policies that would aid tax law and administration that would encourage business growth.

Structural State Autonomy explaining development oriented policies in peripheral contexts: The Uruguayan case (2005–2015)

This article explores the challenge of building state autonomy as a driver of development processes in peripheral economies. More specifically, it explores how to build stable and lasting political processes in economies subject to high economic volatility and external dependence. To this end, I develop the concept of Structural State Autonomy understood as a relational and situated process, immersed in global asymmetries and a product of internal dynamics that shape conflict and cooperation among local actors. I take issue with this debate by analysing the progressive fiscal reforms in Uruguay during the 2000s by studying the Tax Reform aimed at improving income distribution and the New Investment Regime that modifies capital tax exemptions. The article shows that institutionalized, stable, and broad-based dialogues between the state and society have consolidated the Structural State Autonomy in Uruguay. In effect, granting partial benefits to different groups, through articulated and non-rival negotiated agreements that include local elites, grassroots actors, and transnational capital, has allowed the implementation of successful, albeit moderate, progressive tax reforms in Uruguay.

Do Tax Incentives Promote Corporate Green Investment?—Evidence from a Quasi-Natural Experiment Based on China’s Corporate Income Tax Reform

It is essential for achieving green and sustainable economic development by using tax incentives to promote green investment. Using the data from the seventh, eighth, ninth, and tenth Chinese Private Enterprise Surveys (CPESs) conducted by the Private Enterprise Research Group and using China’s corporate income tax reform in 2008 as a quasi-natural experiment, this paper empirically analyses the effect of tax incentives on corporate green investment based on the difference-in-difference models. The research results show that tax incentives can significantly increase corporate green investment. The mechanism test shows that easing financing constraints is an important channel for tax incentives to promote corporate green investment. In addition, the role of tax incentives in promoting green investment varies depending on the type and location of the enterprise. Relatively speaking, tax incentives have a stronger effect in promoting green investment for corporates with low sales revenue, located in the eastern region, heavy pollution, and high innovation capability. By doing placebo tests and changing measurement methods of indicators for robustness tests, the conclusions of this paper are still valid. Therefore, the government should increase tax incentives to better promote corporate green investment.

Fiscal Policy Instruments for Inclusive Labor Markets: A Review

ABSTRACTThis paper critically reviews fiscal policy instruments—including active labor market policies, social protection measures, care policies, and tax reforms—focusing on their differentiated impacts on underrepresented groups and their potential to foster labor market inclusivity. Our review reveals that empirical studies often overemphasize the capacity of individual policies to mitigate inequalities, neglecting the complex interdependencies among various mechanisms and policies. Instead, we argue for a systematic approach to ensure equitable access to good jobs and address disparities across labor market groups. Although sector‐specific training and reskilling are essential, their effects often take time to materialize, highlighting the necessity of complementary labor demand measures, such as public works schemes, and employment subsidies, to address immediate challenges and promote inclusive growth. Care policies remain central to improving female labor market participation by alleviating their unpaid care burdens. The review also identifies critical research gaps, including the need for longitudinal studies on long‐term policy impacts, an exploration of regional disparities in labor market inequalities, and sector‐specific effects of fiscal measures.

Indonesia's Value Added Tax (VAT) Reform: Fiscal Benefits and Sectoral Impacts

This study comprehensively analyzes the impact and implications of the planned increase in Value Added Tax (VAT) rates from 11% to 12% in the wider context of the Indonesian economy. Using an analytical-descriptive approach with a literature review method, this study examines various dimensions of policy impacts, including fiscal, macroeconomic, sectoral, and implementation feasibility aspects. This study found that the increase in VAT has the potential to increase state revenues by IDR 85-95 trillion per year, but also has potential consequences of inflationary pressures of 1.1-1.4% and a short-term slowdown in economic growth of 0.3-0.4%. From a sectoral perspective, MSMEs face significant pressure with a decline in margins of 2-3%, while the formal sector shows better resilience. The implementation feasibility analysis indicates that the readiness of the tax administration system has reached 85%, although there are still several challenges in the supervision aspect. This study recommends a gradual implementation approach with an increase of 0.5% per year, accompanied by strengthening social assistance programs and special incentives for MSMEs. Periodic monitoring and evaluation framework are key to ensuring the effectiveness of this policy while minimizing negative impacts on the economy. This study concluded that the success of this policy depends on the right timing of implementation, institutional readiness, and comprehensive supporting policies.

‘Diocletian oppressed the inhabitants of Paneas’ (ySheb. 9:2): A New Tetrarchic boundary stone from Abel Beth Maacah

ABSTRACT Excavators of tell Abel Beth Maacah in northern Israel uncovered a Tetrarchic boundary stone reused as a cover for a Mamluk-period grave. The inscription mentions a hitherto unknown imperial surveyor (censitor). It is suggested that this individual may have been a colleague of Aelius Statutus, the censitor recorded on the boundary stones of the province of Syria Phoenice. Additionally, the inscription reveals two new toponyms: ‘Tirthas’ and ‘Golgol’, which may correspond to preserved toponyms Kh. Turritha and Tell ʿAjul, respectively. These locations were last recorded by the Survey of Western Palestine (SWP). The paper places this discovery in the context of other boundary stones in the Paneas/Caesarea-Phillipi territory and attempts to explain their extraordinary concentration in light of Diocletianic tax reforms and rabbinic sources. The authors suggest that the territory was probably filled with fields and farms owned by small landholders who paid their taxes independently of the city, providing insight into the complex relationship between taxation, land ownership, and settlement history.

TAXATION SYSTEM IN KINGDOM OF SAUDI ARABIA WITH SPECIAL REFERENCE TO VALUE ADDED TAX: AN EMPIRICAL ANALYSIS

Theoretical framework: The Kingdom of Saudi Arabia (KSA) has acknowledged the limitations of relying exclusively on oil reserves as the predominant revenue stream, as this approach hinders the country's ability to attain sustained economic expansion owing to the unpredictable nature and fluctuations of global oil market prices. Objective: The acceptability of the taxation system on consumer products and services in Saudi Arabia has increased as a result of the simplicity of the Value Added Tax (VAT) system. Despite the limited number of studies conducted on Value Added Tax (VAT) inside the Gulf Cooperation Council (GCC), this particular study represents one of the pioneering efforts to identify and analyze its impact, taking into account the recent law revisions. Consequently, this study possesses contemporaneity and pertinence in terms of offering novel perspectives to governing bodies regarding the value-added tax (VAT) framework, its reception, and the ramifications of income, declining purchasing power, governmental strategic decision-making, and the execution of diverse tax structure modifications. Method: A total of 519 replies were obtained through the implementation of a judgment or purposive sample methodology. To accomplish Convergent and Discriminant Validity, evaluate model fitness, and carry out Structure Equation Modelling (SEM), Smart PLS 3 is used. The researcher used SPSS (specifically version 25) to implement appropriate statistical procedures and processes in service of the study's principal aims. Implication: Moreover, the results indicate that the implementation of Value Added Tax (VAT) has an impact on individuals' income, leading to a decrease in their purchasing power. Additionally, it influences the government's approach to VAT and tax reforms in relation to the Saudi population. Result and Conclusion: The adoption of VAT in Saudi Arabia is significantly influenced by income as a mediating factor. The function of purchasing power in mediating the implementation of Value Added Tax (VAT) in Saudi Arabia is of considerable importance. Originality: The burden of value-added tax (VAT) is frequently transferred to the end consumer through price increases implemented by producers and distributors. The implementation of the Value Added Tax (VAT) system allows the government to generate income through a less visible means.

A reform of value-added taxes on foods can have health, environmental and economic benefits in Europe.

Fiscal policies can provide important incentives for encouraging the dietary changes needed to achieve global policy targets. Across Europe, the foods relevant to health and the environment often incur reduced but non-zero value-added tax (VAT) rates at about half the maximum rates, which allows for providing both incentives and disincentives. Integrating economic, health and environmental modelling, we show that reforming VAT rates on foods, including increasing rates on meat and dairy, and reducing VAT rates on fruits and vegetables can improve diets and result in health, environmental and economic benefits in most European countries. The health improvements were primarily driven by reductions in VAT rates on fruits and vegetables, whereas most of the environmental and revenue benefits were driven by increased rates on meat and dairy. Our findings suggest that differentiating VAT rates based on health and environmental considerations can support changes towards healthier and more sustainable diets in Europe.

Global justice in the reshaping of international tax

Abstract Global digitalization and economic decentralization have reshaped the landscape of international tax policy, prompting substantial reforms led by the OECD, most notably its ‘two-pillar solution’ aimed at addressing the taxation challenges of the digital economy. This article contends that these reforms fall short of incorporating principles of global justice. The analysis critiques both the technical and normative flaws of prevailing international tax policy design approaches, revealing how its intricate, technocratic framework conceals underlying distributional biases and neglects the developmental needs of less advantaged states. It calls for international tax reforms centred on fairness, advocating for explicit consideration of distributional outcomes to ensure a more just and balanced allocation of resources and responsibilities across nations.

Fiscal vertical imbalance and income inequality: A threshold effect analysis based on government expenditure.

This study aims to investigate the complex relationship between vertical fiscal imbalance, public expenditure structure, and income distribution disparities, with the goal of providing policy insights for achieving shared prosperity. Employing Generalized Method of Moments (GMM) and threshold analysis, the research reveals key findings: (1) an exacerbation of vertical fiscal imbalance significantly widens the urban-rural income gap; (2) public expenditure structure exhibits threshold effects, resulting in non-linear impacts on income disparity; (3) a unique contribution of our study is the identification of varying threshold effects of urban public expenditure on income disparities within rural areas, urban areas, and the gap between them, underscoring the need for targeted fiscal interventions. These findings highlight the critical role of public expenditure in addressing income distribution issues and offer valuable guidance for upcoming fiscal and tax reforms.

НАЛОГОВАЯ РЕФОРМА 2025 ГОДА – ФАКТОР ПОВЫШЕНИЯ ДОХОДОВ ФЕДЕРАЛЬНОГО БЮДЖЕТА И РОСТА ЭКОНОМИЧЕСКОГО ПОТЕНЦИАЛА РОССИИ

The article discusses the provisions of the 2025 tax reform on the main types of taxes (corporate income tax, personal income tax, excise taxes, mineral extraction tax, VAT, simplified taxation system). Particular attention is paid to changing the legal regulation of corporate income tax (an increase in the rate from 20% to 25%), personal income tax (the introduction of differentiated tax rates), and the unified tax system (setting up a simplified taxation system aimed at creating conditions for the transition to a general taxation regime for taxpayers using the unified tax system). The article analyzes the measures provided for in the framework of the tax reform, established in order to create equal conditions for competition, aimed at suppressing indirect tax evasion schemes, and at distributing the tax burden in various sectors of the economy, including rental industries. The introduction of a deposit tax starting in 2024, its impact on the dynamics of projected budget revenues in 2024 and subsequent years, as well as the relationship between an increase in the key rate of the Central Bank of the Russian Federation and an increase in the non-tax base (tax deduction) on income from deposits, which reduces the amount of tax on deposits, is being studied. The article examines the impact of changes in the average key rate in 2024–2027 in accordance with the scenarios of the main directions of the unified state monetary policy for 2025 and the period 2026–2027 (basic, disinflationary, pro-inflationary, risky) on the updating of instruments to combat inflation in 2025–2027. This is necessary in the context of the importance of taking into account the implementation of the tax reform in 2025, when a number of its measures may contribute to price increases, and the deterioration of the geopolitical background may lower the exchange rate of the national currency: all this can “accelerate” inflation. It reflects the clarification of the legislatively established amount of budget allocations when forming the federal budget for 2025–2027 based on the projected inflation rate (consumer price growth index), taking into account the inertia of steady inflation and its impact on budget allocations.

Этапы становления бюджетной системы России

The article examines the key stages of the development of the Russian budget system. It is noted that before the revolution there was a two-tier budget system, which later underwent drastic changes. The author analyzes the role of tax reform in the formation of revenues of territorial budgets. Special attention is paid to the impact of economic and political changes on the country’s budget. In conclusion, it is proposed to adapt the budget system to modern challenges in order to ensure the well-being of the population and the sustainable development of the state.

Environmental tax reform and corporate tax avoidance: A quasi-natural experiment on China’s environmental protection tax law

Environmental tax reform and corporate tax avoidance: A quasi-natural experiment on China’s environmental protection tax law