Tax Reform Research Articles

Tax Reform Regarding Tokenized Corporate Bonds in Japan

The 2024 tax reform in Japan took a significant step forward toward establishing a tax system designed to promote the issuance of corporate bonds as security tokens for wholesales. Prior to the amendment, certain entities, including banks, insurance companies, and certain financial instruments business operators, were subject to withholding tax on interest income from tokenized bonds. However, these entities are now exempt from the withholding tax, provided the tokenized bonds are managed in accordance with the relevant public notice of the Financial Services Agency in Japan. Owing to this recent tax reform, the barrier that previously prevented many companies from issuing security token bonds for wholesale purposes has been removed, and as a result, the issuance of such bonds is expected to increase substantially going forward.

Impact and Mechanism Analysis of Environmental Protection Fee and Tax Reform on the ESG Performance of Heavy Polluting Enterprises

Recently, China has advocated for the comprehensive implementation of the new development concept and the enhancement of the national governance system and capacity, particularly in the area of ecology and environmental management. Environmental fee and tax reform has improved China’s modern environmental governance system and deepened the concept of sustainable development of enterprises. In the background of China’s strong call for green transformation and sustainable development, enterprises, as micro subjects in the operation of the market economy, are obliged to balance the concepts of business operation and sustainable development, and to practice and implement the ESG concept. Using a sample of A-share listed companies in China from 2014 to 2022, we conducted an in-depth analysis of the impact of environmental protection tax reform on corporate ESG performance through the difference-in-differences (DID) empirical approach. The results show that (1) the environmental protection fee and tax reform enhances the ESG performance of heavy polluters, and the impact coefficient is around 1.7 to 2.0. The reform exerts the strongest stimulatory effect on the environmental impact (E), with the stimulatory effect being about five times that of the aspect of social responsibility (S). (2) The environmental protection fee and tax reform enhances the ESG performance of heavily polluting firms by promoting green transformation of firms, investor attention, and the government’s focus on the environment. The impact mechanism passes a series of robustness tests, such as the parallel trend test, placebo test, and exclusion of other policy interferences. (3) The environmental protection fee and tax reform enhances the ESG performance of government-owned heavy polluting firms more than private firms. Among different regions, the ESG performance of enterprises in the central region has witnessed the largest improvement margin, while that of enterprises in the western region has the smallest improvement margin.

From theory to practice: Designing a European basic income

AbstractBasic income, a periodic cash payment unconditionally delivered to all accredited residents on an individual basis, has garnered a great deal of attention in recent years driven by rising inequalities, the failure of minimum income schemes, labor market transformations, and diverse basic income pilot projects worldwide. However, the successful implementation of a basic income requires a comprehensive and sustained effort. This research contributes to this endeavor by providing an unprecedented microsimulation analysis of the economic feasibility of a European Basic Income (EBI), demonstrating that it can be financed sustainably and equitably without reducing existing tax revenues. The proposed EBI, financed through a reform of the personal income tax and the introduction of common European wealth and greenhouse gas emissions taxes, ensures the material existence of all Europeans and fosters a more egalitarian European Union through its redistributive effects.

Driving green innovation: assessing the impact of environmental tax policies and green finance on heavily polluting industries

Purpose The purpose of this paper assess the impact of the green finance pilot reform on corporate green innovation, leveraging the establishment of the China green finance pilot reform in 2018 as a quasi-natural experiment. Design/methodology/approach This study investigates the effects of environmental policies on green innovation, utilising a substantial data set from Chinese A-share listed firms over the 2015–2019 period. Employing both double and triple difference models, it focuses on how tax reforms influence green patent filings among these firms. Findings The study confirms that environmental tax policies and green finance initiatives significantly boost green patent filings in pollution-intensive industries. Findings from the regression analysis show robust positive effects from these policies, supporting the idea that stringent environmental regulations can spur innovation by offsetting regulatory costs. Financial health indicators like asset logs and return on assets positively correlated with innovation, emphasising the importance of financial stability. In addition, increased RandD spending is linked to enhanced green innovation, highlighting that financial investment in research is crucial for overcoming innovation barriers. These insights are crucial for shaping policies that integrate sustainability into corporate practices. Originality/value This research contributes to the literature by highlighting traditional views on the economic burden of environmental taxes and demonstrating their role as significant drivers of innovation. It deepens insights into strategically optimising fiscal tools to promote environmentally sustainable economic activities. In addition, it offers a practical framework for policymakers to improve ecological outcomes through effective fiscal strategies.

Tax Revenue and Economic Sustainable Development of Sub-Sahara African Countries

The focus of every nation is on meeting the year 2030 global target for the attainment of the Sustainable Development Goals (SDGs) especially in the sub-Sahara African (SSA) countries. However, sub-Sahara African Countries are still lagging in achieving the SDGs as there is still a high level of hunger, poverty, and poor standard of living. This paper examined the effect of tax revenue on economic sustainability in sub-Sahara African Countries using a quantitative approach, A panel data of 38 sub-Sahara African Countries for 21 years (2001–2021) was employed. The output of the regression analysis carried out using the system generalized moment method revealed that tax revenue had a significant effect on economic sustainability, and governance quality significantly controlled the effect of tax revenue on economic sustainability in sub-Sahara African countries. The study concluded that tax revenue enhanced the attainment of economic sustainability in sub-Sahara African countries. It was recommended that the government of sub-Sahara African countries should adopt comprehensive tax reforms and strengthen governance quality to boost the funds needed towards the attainment of economic sustainability in the region.

KENYA: Tax Reforms

KENYA: Tax Reforms

R&D Tax Incentive Reforms Around the World: The Impact on Firm Value

Many countries have implemented R&D tax incentives to encourage R&D activities and foster innovation, yet their net economic benefits remain unclear. Using a novel hand-collected dataset of global R&D tax reforms and a difference-in-differences approach, we find that these reforms positively impact firm value. The effect is stronger for more generous reforms, those that adopt R&D tax super-deductions, in countries with less developed stock markets and stronger external monitoring, in R&D oriented industries, and for financially constrained firms. We also show that R&D tax incentives enhance firm value by increasing the quantity, quality, and efficiency of innovation. Furthermore, R&D tax incentives outperform patent boxes in enhancing firm value. Additionally, the two tax regimes complement each other, with this complementary effect driven by super-deduction reforms. Our findings shed light on the role of global R&D tax reforms in promoting firm value, suggesting their potential to foster long-term economic benefits.

Study on the Substitution Effect of Property Tax on Land Finance—Analysis based on Shanghai and Chongqing Reform Pilots

This paper aims to study the substitution effect of property tax on land finance through the pilot property tax reform implemented in Shanghai and Chongqing. Based on the theoretical foundation of analysing the impact of property tax on land finance, this paper selects the annual panel data of 35 large and medium-sized cities published by the National Bureau of Statistics (NBS) from 2006 to 2017, and analyses the impact of the pilot property tax reform on the dependence on land finance in Chongqing and Shanghai and its extent. The findings show that the pilot effect of property tax reform in Shanghai is consistent with theoretical expectations, while the opposite is true for Chongqing; under a reasonable property tax system, the substitution effect of property tax reform on land finance gradually increases over time. In the conclusion, the paper puts forward relevant suggestions.

The Conflictual Core of Global Tax Cooperation

It is widely argued that the world is in a new era of global tax cooperation, evidenced by the multilateral OECD/G20 project on base erosion and profit shifting (BEPS). This article argues, however, that this cooperation-centric account masks fundamental conflicts between developing and developed countries, which recently culminated in a vote to shift reform work to the United Nations. This article contends that developing country-centered criticisms of the project are not random but instead reflect coherent concerns about the wide historical gulf in power and resources between developing and developed countries and how the BEPS reforms ignore, and may even exacerbate, that gulf. The reform’s defenders have largely missed this fundamental crux of the criticisms, focusing primarily on the project’s incremental short-term benefits for inter-developing country tax competition. This article’s framework for analysing global tax reform incorporates these deep conflicts and thus more accurately assesses the reform’s promise and risks.

Seven Years of GST: Time to Move Beyond the Exuberance

The introduction of the Goods and Services Tax (GST) in the country in July 2017 marked a watershed in the history of indirect tax reforms in the country. The dual structure of GST in India, with all its infirmities, has had significant positive outcomes. It has reduced multiplicity of taxes, cascading of tax, created uniform tax structure on a common base, a uniform GST architecture, rules and processes, and seamless flow of credit across different tax jurisdictions, across the country. But like any other major tax reform, GST in India initially had its fair share of glitches, some of them still continue, although to a much lesser degree and intensity. Due to constraints imposed by the federal nature of our polity, the centre and the states opted for an ‘imperfect GST’ in place of ‘flawless GST’, with the hope that the design flaws would be corrected once the GST stabilizes. While we celebrate the success of GST in the country, we need to usher in the second-generation GST reforms that will broadly encompass; first, the rationalization of tax slabs, and second, expansion of the tax base by pruning exemptions and bringing petroleum products, electricity, alcohol and real estate under GST. The feasibility of inclusion of excluded items, which constitute around 43% of the state’s own tax revenues, in GST, remains bleak at this stage as it will greatly impact the fiscal autonomy of the states. A beginning can, however, be made to rationalize the rate structure which will remedy many of the complexities and problems being faced at present. But, to even address the issue of rate rationalization, the trust deficit between the centre and the states that has suffered a huge dent during the intervening years has to be bridged. JEL Classification: H21, H77

Environmental taxes promote the synergy between pollution and carbon reduction: Provincial evidence from China

Since its implementation in 2018, China's environmental tax has become a crucial mechanism in the nation's strategy for reducing environmental pollution. However, its synergistic effect between pollution and carbon reduction has not been adequately focused on and evaluated. This study employs the difference-in-differences (DID) model to analyze the impact of the environmental tax policy on the emissions of pollutant and CO2 as well as the synergistic effect between them. The baseline results reveal that the implementation of environmental taxes significantly reduces the emissions of SO2 and CO2 and enhances the level of synergistic effects. This finding passed a series of robustness tests. Additional analysis reveals that the environmental tax promotes reductions in SO2 and CO2 emissions through adjustments in industrial and energy consumption structures. Furthermore, mechanism analysis from an econometric perspective provides theoretical support for the synergistic effect of pollution reduction and carbon mitigation. In the process of achieving CO2 reduction, SO2 plays a crucial mediating role. The heterogeneity effect suggests that in non-coastal areas and regions with larger governmental scales, the environmental tax exhibits significant emission reduction effects. It is advisable to strengthen the legal safeguard of environmental tax, dynamically adjust tax rates, and timely expand the tax scope to improve the environmental tax system and enhance its policy effects. This study provides empirical evidence and policy insights to optimize the environmental tax, offering valuable references for environmental tax reforms in developing countries.

Environmental Protection Tax and China’s Economic Growth: Boost or Slowdown?

This paper explores the impact of China’s environmental protection tax reform on economic growth through empirical research. Using the “fee to tax” policy implemented in China in 2018 as a natural experiment, the analysis is conducted using a strengthened double-difference (DID) model. It is found that environmental protection tax reform has a significant positive impact on regional economic growth, and this conclusion still holds after several robustness tests. In order to explore the mechanism of environmental protection tax in-depth, this paper analyzes the three dimensions of science and technology innovation investment, foreign direct investment, and tax administration intensity. The results show that environmental protection tax does not promote technological innovation of enterprises as expected, but may instead inhibit R&D and innovation activities by increasing the cost pressure on enterprises. The positive impact of environmental protection tax on economic growth is mainly realized by increasing the intensity of tax administration. Furthermore, this paper analyzes the heterogeneity in urban geographic locations and administrative levels, finding that environmental protection taxes have a significant positive effect on economic growth in central and northeastern regions and in cities with lower administrative levels, while they have a negative effect in the eastern region and in cities with higher administrative levels.

OS ASPECTOS JURÍDICOS DA PRODUÇÃO E COMERCIALIZAÇÃO DE AUTOMÓVEIS NO BRASIL

The study addresses the legal aspects of automobile production and commercialization in Brazil, focusing on legislation and its impact on the automotive market. The main objective is to analyze how manufacturers navigate the challenges imposed by Brazilian laws related to their industry and taxation on vehicle sales and usage, particularly in a scenario of policies promoting national production and fiscal regulations. A deductive methodology is employed, incorporating bibliographic research and document analysis, to understand the evolution of legislation and the adaptation of companies. The main findings reveal that manufacturers adopt innovation and strategic partnerships to remain competitive despite the complexity of the tax system and frequent changes in government policies. The study highlights the importance of the topic for the Brazilian economy, emphasizing the need for tax reform to simplify regulations and foster a more favorable environment for competition and sustainable development in the automotive sector.

An In-Depth Analysis of the Impact of Goods and Services Tax (GST) on Gold and Silver Merchants in Junagadh City of Gujarat

This study discusses these challenges and proposes targeted policy recommendations to mitigate adverse effects on small merchants and consumers while aligning GST objectives with industry needs. The findings contribute to the broader understanding of GST's implications for sectoral economics and offer valuable insights for policymakers considering tax reforms in culturally sensitive sectors.

Taxpayer response to greater progressivity: evidence from personal income tax reform in Uganda

Taxpayer response to greater progressivity: evidence from personal income tax reform in Uganda

The Impact of Environmental Protection Tax Reform on Corporate Performance: An Empirical Analysis in China

The Impact of Environmental Protection Tax Reform on Corporate Performance: An Empirical Analysis in China

Analysis of the Impact of Value-added Tax Reform on the Financial Cost Structure of Enterprises

Analysis of the Impact of Value-added Tax Reform on the Financial Cost Structure of Enterprises

Effect of Economic Policies on Business Travel in Brazil

Purpose: The aim of the study was to analyze the effect of economic policies on business travel in Brazil. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Economic policies in Brazil have significantly impacted business travel, particularly through changes in taxation, currency fluctuations, and infrastructure investment. The government's fiscal policies, such as tax reforms and high import tariffs, have increased the cost of doing business, leading to a reduction in both domestic and international business travel. Currency volatility, especially the depreciation of the Brazilian real, has made international travel more expensive for businesses, further dampening demand. Additionally, insufficient investment in transportation infrastructure, such as airports and roads, has contributed to inefficiencies, reducing the attractiveness of Brazil as a business travel destination. Unique Contribution to Theory, Practice and Policy: Theory of planned behavior (TPB), institutional theory & economic theory of travel demand may be used to anchor future studies on the effect of economic policies on business travel in Brazil. Businesses would benefit from clearer guidelines on tax incentives related to travel, enabling them to plan and budget more effectively. The Brazilian government should consider revising tax policies to include specific incentives for business travel.

Tax System Optimization: A Comparative Analysis Between Personal Income Tax and Corporate Income Tax in Indonesia

This study adopts a qualitative approach to analyze the comparison between Personal Income Tax (PPh) and Corporate Income Tax (PPh Corporate) in Indonesia. Through literature studies and observations, this study explores the tariff structure, tax relief, and tax compliance level of the two tax systems. The economic implications of the implementation of Income Tax and Corporate Income Tax on economic growth, investment, and income distribution were also discussed. The findings show that tax reform, as stated in the Law on Harmonization of Tax Regulations (UU HPP), has a significant impact in improving the effectiveness and fairness of the tax system. The results of this study provide in-depth insights into the importance of appropriate tax policies to support inclusive and sustainable economic growth in Indonesia.

Recuperation mechanism of direct taxation to control post covid economic contraction: India’s new tax reform with crypto tax

This study explores the impact of the progressive tax structure on income equality, emphasizing the significance of direct taxes in promoting economic and social equality. It also examines the challenges faced by the Indian government in meeting its revenue targets due to the decline in corporation tax and personal income tax revenues. The present study assesses the role of the newly implemented tax by the Indian Finance Ministry on capital gains from the sale or purchase of cryptocurrencies and its impact on economic growth. A qualitative approach has been adopted, utilizing secondary information sources for characterization and analysis. The study relies on Time Series Data from the Income Tax Department for the financial years 2000-01 to 2018-19 and global estimates of total tax revenues published by the International Centre for Tax and Development (ICTD). The findings indicate that the substantial decline in direct tax revenues necessitated a search for alternative sources of income. The separate taxation system for cryptocurrencies has legitimized digital assets and enabled the government to monitor transactions and capital gains. The introduction of the "Digital Rupee" aims to enhance the digital economy through efficient currency management. This research highlights the need for policymakers to develop a well-defined regulatory framework for cryptocurrency taxation. Clear regulations on cryptocurrency taxation and the "Digital Rupee" could help India boost its digital economy while ensuring better monitoring of crypto transactions and revenues.