Revenue Systems Research Articles

Property Tax Revenues and Multidimensional Poverty Reduction in Colombia: A Spatial Approach

Summary Fiscal decentralization as an instrument to reduce poverty is an open debate that still takes place with little and contradictory empirical evidence regarding whether or not it has served the poor. This paper focuses on analyzing the impact of municipalities’ per capita property tax revenues on multidimensional poverty in the Colombian case. This locally raised tax is used as an indicator of the state capacity that municipalities exercise when fiscal decentralization takes place. To estimate its impact on poverty, we control for the possible endogeneity biases that might affect this relationship while taking into account that multidimensional poverty exhibits strong spatial correlation among Colombian municipalities. We find statistically significant results that demonstrate a causal and diminishing effect of property tax revenues on the poverty headcount ratio and gap. We also find that this effect has substantial spillovers across municipalities. The findings of the paper highlight the need to strengthen subnational revenue systems through policy designs to increase locally raised revenues. We simulate four different counterfactual scenarios to evaluate the potential effect of alternative policy designs on multidimensional poverty. The results of these policy scenarios demonstrate that spatially differentiated policy schemes have greater effectiveness in reducing multidimensional poverty than geographically mute designs.

Revisiting the relevance of economic theory to hotel revenue management education and practice in the era of Big Data

This paper explores the role of economics in hospitality education and industry practice, with a particular focus on revenue management, and puts forward an argument for a return to the inclusion of economic theory in UK hospitality education, not seen since the 1990s. Given the increasing amounts of pricing data available to both managers and customers and the consequent market complexities now seen, developing economic literacy is demonstrated to be a crucial skill required for future hospitality graduates, allowing them to make successful revenue decisions and sense-check with confidence the decisions made by automated revenue systems. Economic literacy is defined as a balanced understanding of economic theory that can be applied in real-life business scenarios, extending beyond simple consideration of supply and demand to a mixture of neoclassical and behavioural approaches to economics.

Book Reviews

Roger H. Gordon of University of California, San Diego reviews “The Rise of the Value-Added Tax”, by Kathryn James. The Econlit abstract of this book begins: “Explores the evolution of the value-added tax (VAT) from relative obscurity to one of the world's most dominant revenue systems, why countries have adopted the VAT, and why different countries adopt different types of VAT. Discusses the rise of the value-added tax; an introduction to the good VAT; an introduction to the many real VATs in existence; the conventional approach to explaining the rise of the VAT; moving toward an alternative approach to explaining the rise of the VAT; case studies on the real-world challenges of VAT reform in Australia and the United States; and conclusions on the rise of the value-added tax.”

A bi-objective airline revenue management problem with possible cancellation

The optimal allocation of seat inventory is a well-known problem of airline revenue management in the airline industry. It is usually carried out among fare classes with a known demand distribution for each class with the aim at increasing the efficiency of revenue systems and enhancing customer satisfaction. Furthermore, an important assumption is the issue of cancellation which is very common in the field of airlines. So to avoid having unused seat in a flight, overbooking technique is used. During last years, different approaches have been proposed for addressing this problem, but most of them only considered revenue to be maximised. In this paper, an optimisation approach based on Taguchi design of experiment and COPRAS decision-making method is proposed. The suggested method not only maximises total revenue and customer satisfaction simultaneously, but also mitigates the effects of nuisance factors on system by minimising the variance of two objectives. Experimental results on a standard example show the effectiveness of the proposed method.

Fair Taxation in the Middle East and North Africa

Fairness – and what governments can do about it – is at the forefront of economic and social debate all over the world. In MENA, this has been at the core of recent political transitions but has not been adequately addressed. This SDN explores how tax systems – a critical interface between the state and citizens – can play a role in meeting demands for greater economic fairness in MENA countries. The SDN finds that for countries with well-established non-hydrocarbon tax systems (mostly oil importers) reforms should focus on simplifying tax structures and introducing more progressivity of personal income taxes, broadening tax bases, and better designing and enforcing property taxes. Tax administration should be more efficient and user-friendly while simplifying tax regimes will reduce the scope for arbitrary implementation. MENA countries with less established non-hydrocarbon revenue systems can begin with a “starter pack” that includes introduction of low-rate value-added and corporate income taxes, excises, and property taxes while building up administrative capacity and taxation expertise together with plans for introducing a personal income tax. Across the region, effective communication, transparency, and constructive dialogue between the State and citizens are critical to the success of reforms.

ANCILLARY REVENUE PRICING

The airline industry has evolved from a system of long-established state owned carriers operating in a regular market to a dynamic, deregulated industry. This development – especially the emerging competition of low-cost carriers – has had a major influence on the price setting behaviour of airlines. Profitability of airlines is limited and pricing systems are reconsidered. To stay competitive, traditional full service carriers consider the implementation of ancillary revenue systems, which are similar to low-cost carriers. This paper investigates challenges of an ancillary revenue pricing approach for full service network carriers. A qualitative means-end approach is used to find attributes, which are important for air passengers, and influence their ticket buying behaviour. In addition, the study provides insight into the perception of an ancillary revenue system in the full service network carrier market. The findings present 18 ticket purchase attributes and 15 behavioural terminal values in hierarchical value maps. Based on these values, it is evident that most passengers appreciate if some services are included in the price and not offered as ancillaries. Benefits of ancillary revenue systems include the individual ticket creation, customisation, improved price-performance ratio, flexibility gains and progressive ideas. The main drawbacks of the system include a complicated and complex booking process, feelings of uncertainty, branding problems, a distortion of competitive behaviours, a system similar to that of low-cost carriers, feelings of paying extra for every service and a perceived decline in service and quality.

Taxation Challenges in Developing Countries

AbstractA well‐functioning revenue system is a necessary condition for strong, sustained and inclusive economic development. However, the revenue systems in some developing countries have fundamental shortcomings. Using Public Expenditure and Financial Accountability assessment data, this article provides a summary of the revenue raising capabilities across 58 developing countries. Tax reforms or tax system changes need to be made mindful of that current capacity. The optimal choice of tax regime may be different when administrative capacity is low. The increasing globalisation of economic activity adds a further layer of complexity that developing countries need to manage in building and maintaining their revenue systems. Finally, any proposals to change the revenue system in a developing country need to recognise that, like developed countries, tax reforms are highly political endeavours.

Fair Taxation in the Middle East and North Africa

Fairness – and what governments can do about it – is at the forefront of economic and social debate all over the world. In MENA, this has been at the core of recent political transitions but has not been adequately addressed. This SDN explores how tax systems – a critical interface between the state and citizens – can play a role in meeting demands for greater economic fairness in MENA countries. The SDN finds that for countries with well-established non-hydrocarbon tax systems (mostly oil importers) reforms should focus on simplifying tax structures and introducing more progressivity of personal income taxes, broadening tax bases, and better designing and enforcing property taxes. Tax administration should be more efficient and user-friendly while simplifying tax regimes will reduce the scope for arbitrary implementation. MENA countries with less established non-hydrocarbon revenue systems can begin with a “starter pack” that includes introduction of low-rate value-added and corporate income taxes, excises, and property taxes while building up administrative capacity and taxation expertise together with plans for introducing a personal income tax. Across the region, effective communication, transparency, and constructive dialogue between the State and citizens are critical to the success of reforms.

Estimating a model of airline passenger choice using grouped booking data and least squares regression

In this article, we estimate a model of airline passenger choice using grouped booking data and least squares regression rather than the standard approach based on individual PNR-level booking data and maximum likelihood estimation. We adapt the little-known and somewhat forgotten transformation techniques proposed by Berkson and Theil while correcting for heteroskedasticity using weighted least squares. We illustrate how to apply the methodology for revenue management applications for data grouped by path and fare class at several stages of the booking process. This approach has the practical advantages of relying on data at the level of aggregation used in most revenue management systems, reducing the size of the dataset and simplifying the estimation process.

Wealth transfer taxation: an empirical investigation

We present an empirical model of wealth transfer taxation in the revenue systems of the G7 countries—Canada, France, Germany, Italy, Japan, the UK, and the US—over the period from 1965 to 2009. Our model emphasizes the influences of population aging and of the stock of household wealth in an explanation of the past and likely future of this tax source. Simulations with the model using U.N. demographic projections and projections of household wealth suggest that even in France and Germany where reliance on wealth transfer taxation has been increasing for part of the period studied, wealth transfer taxes can be expected to wither away as population aging deepens over the next two decades. Our results indicate that recent tax designs that rely upon the taxation of wealth transfers to preserve equity in the face of declining taxation of capital incomes may be, in this respect, politically infeasible for the foreseeable future. We conclude by using the case of wealth transfer taxation to raise the general question of the extent to which the consistency of a proposed reform with expected political equilibria ought to play a role in the design of a normative policy blueprint.

Between qanungos and clerks: the cultural and service worlds of Hindustan's pensmen,c.1750–1850

AbstractThis paper argues that our understanding of the transition to colonialism in South Asia can be enriched by examining the formation of revenue collection systems in north India between 1750 and 1850. It examines agrarian revenue systems not through the prism of legalism or landholding patterns, but by looking at the paper and record-based mechanisms by which wealth was actually extracted from India's hinterlands. It also examines the Kayastha pensmen who became an exponentially significant component of an Indo-Muslim revenue administration. They assisted the extension of Mughal revenue collection capabilities asqanungos (registrars) andpatwaris (accountants). The intensity of revenue assessment, extraction and collection had increased by the mid 1700s, through the extension of cultivation and assessment by regional Indian kingdoms. The East India Company, in its agrarian revenue settlements in north India, utilized this extant revenue culture to push through savage revenue demands. These Kayastha pensmen thus furnished the ‘young’ Company with the crucial skills, physical records, and legitimacy to garner the agrarian wealth which would fund Britain's Indian empire. These more regular patterns of paper-oriented administration engendered a process of ‘bureaucratization’ and the emergence of the modern colonial state.

On the Colonial Origins of Agricultural Development in India: A Re-examination of Banerjee and Iyer, ‘History, Institutions and Economic Performance’

Banerjee and Iyer find that districts which the British assigned to landlord revenue systems systematically underperform districts with non-landlord based revenue systems in agricultural performance, after the onset of the Green Revolution in the mid-1960s. Based on colonial documents, archival research and the work of historians, we correct a mis-interpretation of the land revenue system in Central Provinces, which BI characterise as landlord based. The historical evidence suggests that this region should be attributed to a mixed landlord/non-landlord based revenue system. Using a more appropriate classification, we find no evidence that agricultural performance of Indian districts in the post-independence period was adversely affected by the landlord land revenue system.

Study on the Vulnerability and Resilience Factors of Tax Revenues in Developing Countries. Study funded by the European Commission

Beyond the general impact of shocks on economic growth there are specific effects of shocks on revenue systems that shape the capacity of governments to react to adverse external events and sustain development expenditure. These effects vary not only with the kinds of shock affecting the economies, but also with the characteristics of these economies (welfare levels, dependence on natural resources, etc.), the political and administrative capacity of states to react to changing situations, and the structure of the tax systems. Shocks do not only affect the level of tax collection, but also the stability and predictability of revenue. The latter is critical with regard to the adaptation to exogenous changes as well as the financial ability of states to recover from adverse external events. This study presents an approach to empirically assess the impact of several kinds of shocks on revenue systems in a broad set of countries, and in developing countries in particular. The study thus contributes to an evidence-based policy of the European Commission aimed at strengthening the capacity of developing countries to absorb external shocks and thereby stabilising development expenditures. In particular, it provides evidence on the vulnerability to external shocks of tax revenues in developing countries and presents policy options to strengthen the resilience of tax systems.

Revenue Reform and Statebuilding in Anglophone Africa1

SummaryWithin the development field, tax administration reform is an area of relative success. Over the past two decades, the national revenue systems of most countries in anglophone Africa have undergone major reforms. These comprise, in particular, the introduction of Value Added Tax (VAT), the adoption of ‘advanced’ tax administration practices, and the creation of semi‐autonomous revenue authorities. What do these reforms imply for emerging patterns of politics and governance in anglophone Africa?The first conclusion is conceptual and theoretical. The impact of these reforms has been shaped by the broad context within which they were being implemented, especially the increasingly transnational character of many important policymaking relationships (Orenstein and Schmitz 2006; Stone 2008; Weiss 2005). Senior African revenue staff feature increasingly in transnational expert networks, and face a wider range of employment opportunities, public and private, both at home and abroad. The second conclusion is that these revenue reforms have contributed only modestly to statebuilding. While the new revenue agencies are in many respects impressive organisations, actual revenue collection has not increased much; improvements in organisational capacity have been concentrated at national and capital city level; potentially synergistic improvements in the capacity to formulate tax policy have not occurred; and some anticipated spillover benefits from improving the revenue collection apparatus have not been realised. The third conclusion is that, while these reforms have made it possible for governments to raise revenue from the organised private sector in a more ‘Weberian’ (institutionalised, rule‐bound) and a more consensual manner, they have also increased the possibility that the taxation system will be shaped by private sector interests, making it difficult for governments to raise the revenue that they claim they need.

Battery Electric Vehicle Driving and Charging Behavior Observed Early in The EV Project

As concern about society's dependence on petroleum-based transportation fuels increases, many see plug-in electric vehicles (PEV) as enablers to diversifying transportation energy sources. These vehicles, which include plug-in hybrid electric vehicles (PHEV), range-extended electric vehicles (EREV), and battery electric vehicles (BEV), draw some or all of their power from electricity stored in batteries, which are charged by the electric grid. In order for PEVs to be accepted by the mass market, electric charging infrastructure must also be deployed. Charging infrastructure must be safe, convenient, and financially sustainable. Additionally, electric utilities must be able to manage PEV charging demand on the electric grid. In the Fall of 2009, a large scale PEV infrastructure demonstration was launched to deploy an unprecedented number of PEVs and charging infrastructure. This demonstration, called The EV Project, is led by Electric Transportation Engineering Corporation (eTec) and funded by the U.S. Department of Energy. eTec is partnering with Nissan North America to deploy up to 4,700 Nissan Leaf BEVs and 11,210 charging units in five market areas in Arizona, California, Oregon, Tennessee, and Washington. With the assistance of the Idaho National Laboratory, eTec will collect and analyze data to characterize vehicle consumer driving and charging behavior, evaluatemore » the effectiveness of charging infrastructure, and understand the impact of PEV charging on the electric grid. Trials of various revenue systems for commercial and public charging infrastructure will also be conducted. The ultimate goal of The EV Project is to capture lessons learned to enable the mass deployment of PEVs. This paper is the first in a series of papers documenting the progress and findings of The EV Project. This paper describes key research objectives of The EV Project and establishes the project background, including lessons learned from previous infrastructure deployment and PEV demonstrations. One such previous study was a PHEV demonstration conducted by the U.S. Department of Energy's Advanced Vehicle Testing Activity (AVTA), led by the Idaho National Laboratory (INL). AVTA's PHEV demonstration involved over 250 vehicles in the United States, Canada, and Finland. This paper summarizes driving and charging behavior observed in that demonstration, including the distribution of distance driven between charging events, charging frequency, and resulting proportion of operation charge depleting mode. Charging demand relative to time of day and day of the week will also be shown. Conclusions from the PHEV demonstration will be given which highlight the need for expanded analysis in The EV Project. For example, the AVTA PHEV demonstration showed that in the absence of controlled charging by the vehicle owner or electric utility, the majority of vehicles were charged in the evening hours, coincident with typical utility peak demand. Given this baseline, The EV Project will demonstrate the effects of consumer charge control and grid-side charge management on electricity demand. This paper will outline further analyses which will be performed by eTec and INL to documenting driving and charging behavior of vehicles operated in a infrastructure-rich environment.« less

On the Colonial Origins of Agricultural Development in India: A Re-Examination of Banerjee and Iyer, ‘History, Institutions and Economic Performance’

Banerjee and Iyer (henceforth, BI) (American Economic Review, 2005) find that districts which the British assigned to landlord revenue systems systematically underperform districts with non-landlord based revenue systems, especially in agricultural investment and productivity and mainly after the onset of the Green Revolution in the mid-1960s. On this basis, BI claim there were long-lasting effects of the institutions established in British India on a variety of development outcomes after independence. We correct a miscoding of the land revenue system in Central Provinces, which BI characterise as mostly landlord based, when reliable historical evidence suggest that this region should have been attributed to a mixed landlord/non-landlord based revenue system. Using a more appropriate classification of the land revenue system of the Central Provinces constructed from documented archival research, we find no evidence that agricultural performance of Indian districts in the post-independence period was adversely affected by the colonial landlord land revenue system. Our results demonstrate that the key BI argument that the more ‘oppressive’ landlord-based colonial land revenue systems mattered for post-independent agricultural development in India rests on fragile historical and statistical foundations.

Financing welfare regimes: mapping heterogeneous revenue structures

Gough I, Abu Sharkh M. Financing welfare regimes: mapping heterogeneous revenue structuresInt J Soc Welfare 2011: 20: 280–291 © 2011 United Nations Research Institute for Social Development (UNRISD), International Journal of Social Welfare © 2011 Blackwell Publishing Ltd and the International Journal of Social Welfare.This article studies how the composition of public revenues in terms of sources (such as taxation, social insurance contributions, mineral rents, foreign aid) is associated with different welfare regimes and social policy outcomes. It is divided into two halves: a review of literature and research, and a cross‐national data analysis. The first half reviews literature on the emergence of tax and revenue systems in the West, and on the relevance of these frameworks and findings to developing countries. The second half uses cluster analysis to identify groups of developing countries with contrasting revenue systems in 2000, and then compares these with our previous analysis of welfare regimes in the global South. We conclude that higher tax or revenue levels are not associated with more advanced or effective welfare systems. It is only the scope of social security contributions that correlates with proto‐welfare states in the developing world.

The revenue system of China: Past, present, and emerging issues

This article examines the major modifications made to the national revenue system since the initial reform and opening up of China in the late 1970s. A detailed analysis of revenue structures at the central and local levels of government is presented; several emerging issues are also discussed. The authors suggest that past reforms were largely successful in terms of rationalization of intergovernmental fiscal relations and have profoundly impacted the current revenue system to meet certain policy goals and administrative needs. A brief comparison illustrates that although central and local revenue systems share basic similarities such as a general reliance on tax revenue and an overall dependence on turnover and income taxes, striking differences are also in evidence which include extra-budgetary revenues and a high concentration of land-related revenue in local governments as well as a highly diversified local revenue structure. Key emergent issues identified include the readjustment of the roles played by the different levels of government in revenue administration and expenditure assignment, the increased importance of intergovernmental transfer and accountability, and possibilities for the adoption of new taxes such as a real property tax, a social security tax, and a volume-based vehicle emission tax.

Working for All Australians: The ATO and the Community

From global poverty to climate change to ageing populations, nations and their governments are acutely conscious of the role of revenue systems in alleviating wicked problems and driving positive change.

Educating American Public Administrators: Texts for the Introductory Course

Public Administration ReviewVolume 70, Issue 4 p. 634-636 Educating American Public Administrators: Texts for the Introductory Course Jane Beckett-Camarata, Corresponding Author Jane Beckett-Camarata Kent State University Jane Beckett-Camarata is an assistant professor in the Department of Political Science at Kent State University. She is past chair of the American Society for Public Administration's Section on Public Administration Education. Her research and teaching interests include state and local financial management, budgeting, revenue systems, financial emergencies, and debt markets.E-mail:jbecket1@kent.edu Larkin Dudley is an associate professor in the Center for Public Administration and Policy, School of Public and International Affairs at Virginia Tech. She is a past president of the American Society of Public Administration's Section on Public Administration Education. Her research and teaching interests include organization theory and behavior, policy design and analysis, privatization, and public participation.E-mail:dudleyl@vt.eduSearch for more papers by this authorLarkin Dudley, Corresponding Author Larkin Dudley Virginia Tech Jane Beckett-Camarata is an assistant professor in the Department of Political Science at Kent State University. She is past chair of the American Society for Public Administration's Section on Public Administration Education. Her research and teaching interests include state and local financial management, budgeting, revenue systems, financial emergencies, and debt markets.E-mail:jbecket1@kent.edu Larkin Dudley is an associate professor in the Center for Public Administration and Policy, School of Public and International Affairs at Virginia Tech. She is a past president of the American Society of Public Administration's Section on Public Administration Education. Her research and teaching interests include organization theory and behavior, policy design and analysis, privatization, and public participation.E-mail:dudleyl@vt.eduSearch for more papers by this author Jane Beckett-Camarata, Corresponding Author Jane Beckett-Camarata Kent State University Jane Beckett-Camarata is an assistant professor in the Department of Political Science at Kent State University. She is past chair of the American Society for Public Administration's Section on Public Administration Education. Her research and teaching interests include state and local financial management, budgeting, revenue systems, financial emergencies, and debt markets.E-mail:jbecket1@kent.edu Larkin Dudley is an associate professor in the Center for Public Administration and Policy, School of Public and International Affairs at Virginia Tech. She is a past president of the American Society of Public Administration's Section on Public Administration Education. Her research and teaching interests include organization theory and behavior, policy design and analysis, privatization, and public participation.E-mail:dudleyl@vt.eduSearch for more papers by this authorLarkin Dudley, Corresponding Author Larkin Dudley Virginia Tech Jane Beckett-Camarata is an assistant professor in the Department of Political Science at Kent State University. She is past chair of the American Society for Public Administration's Section on Public Administration Education. Her research and teaching interests include state and local financial management, budgeting, revenue systems, financial emergencies, and debt markets.E-mail:jbecket1@kent.edu Larkin Dudley is an associate professor in the Center for Public Administration and Policy, School of Public and International Affairs at Virginia Tech. She is a past president of the American Society of Public Administration's Section on Public Administration Education. Her research and teaching interests include organization theory and behavior, policy design and analysis, privatization, and public participation.E-mail:dudleyl@vt.eduSearch for more papers by this author First published: 06 July 2010 https://doi.org/10.1111/j.1540-6210.2010.02184.xCitations: 1Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume70, Issue4July/August 2010Pages 634-636 RelatedInformation