Reform Of Tax System Research Articles

An examination of direct and indirect taxation in OECD countries and the case of Greece

This paper attempts to analyze and interpret the principles of direct and indirect taxation. Initially, a theoretical approach to the general concepts and principles governing tax law is presented. It is followed by a presentation of the Greek tax and financial system. The key points demonstrating the harmonization of tax legislation, in accordance with the OECD (Organization for Economic Cooperation and Development) guidelines so far are highlighted. Any future reform of the Greek national tax system should incorporate the fundamental principles of national tax policy. Additionally, it must be in line with OECD principles and guidelines. The further implementation of the Organization's recommendations will shift the balance between direct and indirect taxation, leading to strengthening the first and reducing the second. Over the last decades, the ratio of direct to indirect taxes has been on the increase, particularly in developed countries. The main reason is that direct taxation is socially just and effective. Direct taxation is attributed by the liable person, while indirect taxation is transferred according to the ability of each person to react to the relevant market. The OECD supports, for member countries, the strengthening of direct taxation, which takes into account income and other social criteria and satisfies both the criterion of efficiency and the criterion of fair distribution of economic burdens. On the contrary, indirect taxation is reduced to inversely progressive taxation in terms of the income of consumers and is not consistent with the OECD principles of socially just and effective taxation in economically developed countries. The taxation of the citizens in general follows the principle of the citizens contributing to the public burdens according to their powers, for there is nothing more unjust than to treat unequal men as equals. From this proportional treatment of the taxing units, the constitutional principle of equality is also satisfied by reflection.

The effect of enterprise quality management on innovation incentives in enterprises —— based on the reform of China's value-added tax system

This article will analyze the incentive effect of the value-added tax rate reduction policy on enterprise innovation from the perspective of enterprise quality management. The research results indicate that: (1) the reduction of value-added tax rate has an incentive effect on the innovation activities of enterprises; (2) There is a positive moderating effect of enterprise quality management on the reduction of value-added tax rate and the innovation and research and development activities of enterprises; (3) The reduction of value-added tax rate has a more significant incentive effect on innovation in the eastern region of China, state-owned enterprises, and relatively larger enterprises.

Research on the Impact of Environmental Protection Tax on Green Technology Innovation of Enterprises

Research on the Impact of Environmental Protection Tax on Green Technology Innovation of Enterprises

Impact of budget performance management reform on local fiscal relief

Budget performance management is crucial for strengthening fiscal revenue and expenditure management, enhancing the efficiency of fiscal fund utilization, and deepening the fiscal and tax system reform. Based on the quasi-natural experiment of budget performance management reform and utilizing data from 30 provinces spanning the years 2001–2021, this study employs a multi-temporal difference-in-differences model to investigate the mechanism and effects of budget performance management reform on local government fiscal pressure from both theoretical and empirical perspectives. The results reveal that budget performance management reform has a significant effect on relieving local fiscal pressure. Parallel trends and series of robustness tests support the results. Budget performance management reform impacts fiscal pressure through fiscal expenditure efficiency, government expenditure scale, and fiscal transparency. The heterogeneity analysis results indicate that the impact advancing budget performance management reform on fiscal pressure is affected by regional environment, fiscal decentralization areas, and municipal debt areas. The research results provide direct evidence of the effect of budget performance management on fiscal pressure, providing policy insights for local governments to alleviate the contradiction between fiscal revenue and expenditure.

A study of market segmentation, government competition, and public service efficiency in China: Based on a semi-parametric spatial lag model.

Despite significant growth in fiscal expenditure, the overall level of public services in China remains inadequate. One approach to improving government public service efficiency from the perspective of management psychology is to strengthen government competition. However, only a few studies have explored the improvement of public service efficiency through government competition, with even fewer addressing the phenomena of market segmentation and spatial effects that accompany the process of government competition. This paper aims to fill this research gap by examining the effects of government competition and market segmentation on public service efficiency, as well as their spatial disparities. We initially employs the DEA method to assess the efficiency of public services based on inputs and outputs, and examines its spatial variations. Subsequently, a semi-parametric spatial lag panel model is utilized to validate the effects of market segmentation and government competition on public service efficiency. Our findings indicate that inter-provincial market segmentation leads to a decline in public service efficiency. Moreover, the influence of horizontal competition between local governments on public service efficiency varies depending on the degree of positive and negative effects in their competition dynamics. The impact of vertical competition between central and local governments on public service efficiency is influenced by the degree of fiscal decentralization. When the level of fiscal decentralization is below 0.808, vertical competition between central and local governments has a promoting effect on public service efficiency. However, when the degree of fiscal decentralization exceeds 0.08, this promoting effect weakens and gradually transforms into a negative influence. The insights and evidence provided by this study offer valuable guidance for for effectively reshaping the fiscal relations between the central and local governments in China and improving public service efficiency in the context of a new round of fiscal and tax system reforms.

ОКРЕМІ АСПЕКТИ МІЖНАРОДНОГО ДОСВІДУ ОРГАНІЗАЦІЇ ПОДАТКОВОГО КОНТРОЛЮ

At the current stage of the development of the domestic economy, tax control is one of the main problems before the executive authorities, since the issue of replenishing the budget is one of the most important, because the country is under martial law and the level of the shadow economy is growing. Creating an effective tax control system requires rational approaches using the practical experience of foreign countries in this area. The article analyzes and characterizes the specific features of the organization of tax control in European countries (France, Germany, Poland), the United States of America (USA), and Canada. The main principles, forms and directions of tax control in these countries are considered according to two main approaches – European and Western (American). The legal framework and institutional environment for ensuring the tax control process are considered. Cases of imposition of administrative and/or criminal punishment for committing a tax offense in accordance with the legislation of each individual country are outlined. The main directions of the effective organization of tax control in Ukraine are outlined, taking into account world experience.. It is noted that the tax services in Western countries are largely endowed with the powers of law enforcement agencies. The active development of non-cash payment systems with the wide use of computer systems helps to develop the market economy of countries, which accordingly improves the tax control of tax services. The tax control system of Ukraine is close to the European approach, but the reform of the administrative tax system is very slow. Tax authorities should not only be able to receive tax reporting at their disposal, but also the reporting of other financial institutions related to the activities of the taxpayer. The main directions of the organization of tax control in Ukraine are reflected, taking into account the experience of other countries. One of the main ones is the need to improve the technical support of Ukrainian tax authorities and accelerate the process of digitalization of policy in the context of tax control.

An assessment of the impact of the digital economy on the adaptive reform of the tax system based on data analysis

Abstract The digital economy is playing an increasingly important role in economic development and has a non-negligible impact on the innovative development of the tax system. The study measures two aspects of the digital economy and the effectiveness of tax system reform (tax governance capacity and tax administration efficiency) and constructs a benchmark model through a panel Tobit regression model and a spatial regression model. The impact of the digital economy on the effectiveness of tax system reform is empirically analyzed. The digital economy shows a significant correlation with the effectiveness of tax system reform. The regression coefficients of the digital economy on the effectiveness of tax system reform in the eastern, central, and western regions are 1.586, -1.762, and 2.153, respectively. The differences in the coefficients between the groups in the east and the center and the west and the center are 3.486 and 3.896, respectively, which indicates that the development of the digital economy has a more significant effect on the improvement of the effectiveness of tax system reform in the western region and the east. However, it is less beneficial to the effectiveness of the reform of the tax system in the central region than in the central region. The effect of tax system reform is less beneficial. The digital economy can play a significant role in promoting the reform of the tax system in both regions with high and low levels of human capital, but it has a greater effect on improving the effectiveness of the reform of the tax system in regions with high human capital.

An Analysis on the Path of Tax System Reform in the Context of Digital Economy

An Analysis on the Path of Tax System Reform in the Context of Digital Economy

Tax Certainty in the Digital Economy in the Perspective of a Two-Pillar Program

The rapid development of the digital economy has brought new challenges to global tax administration, and traditional tax systems are facing numerous difficulties. As an important part of global tax reform, the "two-pillar solution" is of great significance in addressing tax issues in the digital economy. This paper first provides a brief overview of the two-pillar solution and its main contents. It then examines the issue of tax certainty in the digital economy, analyzes the importance of tax certainty for the digital economy, and the challenges it faces. Subsequently, policy recommendations are presented to address tax certainty issues in the digital economy, including international cooperation and coordination, improving tax data collection and information exchange, and promoting self-regulation and compliance in the digital economy. Finally, by analyzing the example of the EU digital tax proposal and the progress and implementation of international tax reform, the paper summarizes the importance of tax certainty in the digital economy, the prospects and challenges of the two-pillar solution, policy recommendations, and future prospects. This paper aims to provide ideas and references for researching tax issues in the digital economy and its solutions, in order to promote the reform and upgrading of the global tax system.

The impact of tax reform on corporate green transformation — Evidence based on the value-added tax retained rebate

This paper empirically investigates the tax system reform as an important factor driving corporate green transformation. Empirical results indicate that government's implementation of a tax system reform, mainly based on the value-added tax (VAT) retained rebate, can significantly enhance the level of corporate green innovation and promote corporate green transformation. Further research reveals that the promoting effect of the tax system reform on corporate green transformation is more pronounced in non-state-owned enterprises and in companies with high financing constraints. Overall, the research results have significant practical implications for further improving corporate resource allocation and fostering new competitive advantages for companies.

Pillar Two: Status Quo, Subject-to-Tax Rule and the Impact on Third-Party Investment in MNEs

This article examines the current status of the OECD’s two-pillar reform of the international tax system to address the tax challenges arising from digitalization and globalization of the economy, agreed to in October 2021. The article focusses on the complexities involved in the reform, with particular attention to EU law. Certain fundamental aspects contained in the EU Minimum Taxation Directive (2022/2523) are examined in addressing whether or not Pillar Two is compatible with the European Legal Framework. Finally, the issue of the taxation of minority investments in MNE groups is examined in light of the subject-to-tax rule.

THE MEDIATING EFFECT OF TRUST IN AUTHORITY ON THE RELATIONSHIP BETWEEN TAX SYSTEM REFORM, TAX KNOWLEDGE, AND E-COMMERCE BUSINESS VOLUNTARY TAX COMPLIANCE

This study aims to examine the mediating effect of trust in authority on the relationship between tax system reform, tax knowledge, and voluntary tax compliance among e-Commerce business taxpayers in Malaysia. This study posited tax system reform, tax knowledge, and trust in authority, as determinants of e-Commerce voluntary tax compliance. The study also proposed the mediating influent of trust in authority on the relationships between tax system reform, tax knowledge, and e-commerce-voluntary tax compliance. A self-administered questionnaire was distributed to 339 e-Commerce business taxpayers as respondents. The results revealed a significant and positive relationship between tax system reform, tax knowledge, and e-Commerce voluntary compliance. Additionally, tax system reform and tax knowledge have a significant direct relationship with e-commerce voluntary compliance, and have a significant relationship with mediating effect of trust in authority, indicating that there is a partial mediation effect between the relationships. The findings of this study showed how trust in authority can impact voluntary tax compliance among e-Commerce business taxpayers. This study would facilitate the stakeholders such as tax authorities, tax practitioners, and academicians to improve the understanding of the determinants that affect tax compliance of e-Commerce business taxpayers.

Can the Reform of the Transfer Tax System Affect Corporate Green Innovation—Evidence from China’s “BT to VAT” Reform

Taxation has long been an important tool for dealing with externalities, and studying whether tax policies can be linked to today’s green development trend can help macroeconomic decisions influence the green transformation of enterprises. The article uses the business tax to VAT reform (BT to VAT), the largest turnover tax reform in recent years that took place in China from 2012 to 2016, as an example. The policy effect model was constructed using the difference in difference method to explore the driving effect of the tax reform and related variables on corporate green innovation. The results show that the policy effect of tax reform can effectively promote an enterprise’s green innovation behavior, with the promotion effect on invention-based green patents being significantly higher than that on utility-based green patents; there is a certain time lag in the promotion of green innovation by the policy effect of tax reform, with a significant effect starting from the third year of the policy. The green innovation behavior of enterprises is influenced by the characteristics of enterprises, with a significant positive correlation with enterprise size and operating capacity. Green innovation behavior is influenced by the characteristics of enterprises and has a significant positive correlation with the size and operating capacity of enterprises. The implementation of the policy of ‘reducing taxes and fees’ is conducive to green innovation, and an effective tax reform should be formulated gradually in response to the national conditions and market situation; on the basis of quality assurance, unnecessary steps in the process of green patent application and approval should be reduced to improve the efficiency of green innovation; effective social supervision or the appropriate realization of corporate equity can be adopted to promote green innovation. Corporate equity to promote corporate green innovation.

Tax System Reform as a Challenge to Economic Reform: A Case Study of Jordan

Governments care about the tax system and pay attention to it not as a tool for collecting money, but rather as a tool of economic reform, so that taxes achieve their financial, economic and social goals, and then achieve tax justice and protect the poor and middle class. Thus, this study came to investigate the effect of the tax revenue structure in Jordan on economics reform indicators (per individual income growth rate, public debt, openness trade, and inflation) as a challenge to the economic reform. The study population consists of the public sector of the ministries and public sector departments responsible for preparing the general budget and the Jordanian Department of Statistics, with the aim of relying on data issued by them during the time period 1990-2019. Multiple regression models were used to study hypotheses. The research results showed that direct tax (income and profits tax) in Jordan did not significantly affect the economic reform indicators, while there was a negative significant impact at a significance level (á ≤ 0.05) of sales tax on the economic reform indicators. Additionally, the study found that there is no significant effect of indirect taxes (property tax and foreign trade) on economic indicators relative to GDP represented in per individual income growth rate, public debt, and inflation. Among the recommendations of the study is that Jordan must develop the country’s public revenues from its own resources in order to reduce dependence on foreign debt.

RESULTS AND PROSPECTS OF THE REFORMING OF TAX SYSTEM IN GEORGIA IN ACCORDANCE WITH EU REQUIREMENTS

Taxes are the main source of formation of the state budget of Georgia. 90% of the total amount accumulated in the country's budget is due to taxes. Value Added Tax (VAT) is approximately 45% of the tax structure, that is, up to 30% of income, up to 10% of income tax, and the rest is excise, import and customs duties. Taking into account the role and importance of taxes in the dynamic and stable development of the country, the article presents the opinions of the authors on the reforms of the Georgian tax system and the main directions for improving tax administration. The essence of the changes made to the tax legislation of Georgia was studied, analyzed and evaluated on the basis of empirical data; the possibility of mobilizing funds in the country's budget through the maximum harmonization of the tax system of Georgia with the best practices of the European Union was argued in this article. The authors develop the next point of view: the tax system of Georgia and its regulation are gradually approaching the European model, although certain norms of tax administration still need to be finalized. Also a full harmonization with the EU tax system is needed.

Influence of Value Added Tax Revenue on Private Domestic Investment in Developing Countries

The study's overarching goal is to assess the influence of Value Added Tax (VAT) revenue on private domestic investment in emerging countries. The study used a time series research design, and it is a case study of one country, Tanzania. Annual time series data from 1998 to 2020 were used in the study. The data on tax income (VAT) is taken from the Tanzania Revenue Authority website and the Bank of Tanzania, while the data on private domestic investment as Gross fixed capital formation of the private sector as a percentage of GDP is obtained from the World Bank. Following the first tests for heteroscedasticity, multi-collinearity, unit roots, lag length selection, and co-integrating vectors. The long-run and short-run correlations were then computed. The findings demonstrated that in the long run, value added tax is negatively associated to private domestic investment. The analysis showed a negative association between the degree of investment and the value added tax parameter estimates. Even though value added tax generates government revenue, increasing it encourages tax evasion and leads to high prices of goods, putting the burden on low-income earners, reducing disposable income and distorting saving and private domestic investment. The study recommends that governments reduce VAT rates, simplify their tax regimes, address any tax administrative issues, and plug all gaps for tax evasion in order to increase revenue generation and attract private investments. For example, the government should improve an appropriate tax system and implement progressive tax reforms to attract private investors. As the study's findings demonstrated that value added tax has a negative long-term impact on investment, a greater value added tax levied causes higher corporate costs. Governments must also lower VAT rates, simplify their tax regimes, address any tax administrative issues, and close any gaps for tax evasion in order to increase revenue generation and attract private investment. For example, the government should improve an appropriate tax system and implement progressive tax reforms to attract private investors. As the study's findings demonstrated that value added tax has a negative long-term impact on investment, a greater value added tax levied causes higher corporate costs.

The influence of environmental tax reform on corporate profit margins-based on the empirical research of the enterprises in the heavy pollution industries.

The deteriorating global environment has attracted wide attention in various countries. How to curb environmental pollution and achieve sustainable economic growth has become an urgent problem that we must face. As an effective tool for pollution control, environmental tax has been implemented in many developed countries and has achieved good results. As the largest developing country in the world, China introduced the first environmental tax law in its history in December 2016, which is regarded as a major reform of the green tax system. To explore the implementation effect of environmental tax in China, this paper takes 3867 Chinese listed enterprises (2015-2020) in Shanghai and Shenzhen A shares as the research sample and explores the microeconomic effect of environmental tax reform using the difference in difference (DID) method. It is concluded that the environmental tax reform can produce a positive impact on the corporate profit margins while curbing the enterprise pollution behavior. This positive effect comes from the investment improvement effect and the cost-saving effect, and this effect is heterogeneous between different regions and property rights enterprises. Therefore, the design of the tax system must be implemented with different measures. Environmental taxes have achieved positive policy results in China, contributing to sustainable economic growth. This tax reform has an important reference value for the developing countries in the industrialization stage.

Can Inheritance Taxation Promote Equality of Opportunities?

After a period of relatively strong economic and social mobility during the post-WWII decades, labour income is now quickly losing its capacity to fuel mobility across the wealth distribution of Western economies, with inheritance becoming again the main determinant of individuals’ ability to make it to the top of the wealth distribution. At a time where inheritance taxation therefore seems desirable from both equity and efficiency standpoints, most inheritance tax systems are broken. They have failed to be truly progressive, and have remained very unpopular among the public. In this paper, we propose general principles to guide an in-depth reform of inheritance tax systems, to make them more efficient, progressive and transparent. Using administrative survey data from France, we also discuss whether the revenue generated by these reforms can promote equality of opportunities, by guaranteeing a wealth endowment for all. Based on detailed simulations, we explain why inheritance taxation alone cannot deal with the current dynamics of concentration of wealth at the top of the distribution, and why it needs to be complemented by progressive taxation of wealth and/or capital income. <strong>JEL No:</strong> D14, D30, D31, D63, D64, H21, H24, H26, H31.

Can performance-based budgeting reform improve corporate environment in ESG? Evidence from Chinese-listed firms

Finance is a pillar industry of national governance. It also provides a solid guarantee for achieving the official Double Carbon target. The question of how to forefront the role of environmental governance in the reform of fiscal and taxation systems, whilst also motivating enterprises to enhance Environment in Environmental, Social, and Governance (EESG) considerations is worth investigating in depth. This study takes A-share listed companies in China from 2001 to 2020 as examples. The effect of Performance-Based Budgeting (PBB) reform on the EESG of these enterprises is empirically examined through quasi-natural experiments using a multi-time difference-in-difference model. We find that PBB significantly optimizes the EESG of the enterprises. The placebo test, the difference-in-difference method, and a series of other robustness tests all support this conclusion. Furthermore, it is suggested that the environmental governance effect of PBB is more significant in areas with heavy financial pressure and stronger government audit. The environmental governance effect of the PBB reform is significant for enterprises with government contracts, strong green innovation capabilities, or high financing constraints. The mechanism test is performed, and the results suggest that the influence mechanism of this environmental governance role lies in the fact that PBB has improved environmental protection subsidies and enhanced fiscal transparency. Through the economic consequences test, we find that enterprise EESG can bring economic benefits to enterprises, which is reflected in the improvement of enterprise return on total assets, price-to-book ratio, and total patent authorization. This study enriches literature on the economic consequences of PBB, and has significance in deepening current fiscal and tax system reform, vigorously optimizing the major strategy of carbon peak and carbon neutrality.

The Big Four and corporate tax governance: From global dis‐harmony to national regulatory incrementalism

AbstractThe Big Four professional services firms – PwC, Deloitte, KPMG and EY – promote, sanction, and regularise the behaviour and practices of business and government. This is especially the case in the area of multinational tax avoidance. This large, and growing, sector of the Big Four's business model places them at the centre of both causing and addressing the problem. Their role is not limited to advising MNCs on complex tax structures. They also advise governments and international organisations on regulatory reform of the global tax system. This article examines their role in so doing through an analysis of Australian Senate Inquiry hearings and responses to the OECD reform programme on the digitalisation of the economy. We show that advice provided by the Big Four is not purely technical, but is intended to achieve a global corporate tax system that is either globally dis‐harmonised or a matter of national regulatory incrementalism. This is despite their claims of supporting global regulation based on multilateral agreements. Ultimately, we demonstrate that the Big Four use their significant structural power to discursively undermine the ideals of the OECD, the leading international organisation working to reform global taxation.