Social Security Contributions Research Articles

Book Review

Book Review

Специфика и проблемы налогового стимулирования малых ИТ-компаний в России

Since 2021, Russian IT companies have been stimulated by enhanced tax incentives, which allow one to pay corporate income tax only to the federal budget as well as pay social security contributions at a heavily reduced rate. While medium and large businesses get benefits from the new government support, small enterprises are traditionally supported through the simplified taxation system, which offers alternative tax measures. For this reason, the purpose of the article is to identify problems which could arise when new incentives are distributed in the economy. Based on the structure of the IT industry and the conditions of reducing taxes, it is argued that fairness of taxation is broken as small IT (software) companies constitute the majority and, at the same time, have little chance to be included in the tax incentive scope. The new privileges addressed to IT companies actually favor some businesses with high turnovers, and even the favorable simplified taxation system cannot completely eliminate distortions in the tax burden level. Along with this, sub-central governments have a strong motivation to raise their tax revenues within the framework of vertical tax competition. There is a need to make the tax system more neutral as well to harmonize tax regimes, and the article provides relevant proposals.

Beim \xdcbergang zum B\xfcrgergeld mutig gro\xdfe Ver\xe4nderungen wagen

The new German federal government wants to replace the unemployment benefit II (Arbeitslosengeld II) with a so-called citizen's income ("Bürgergeld"). In doing so, it needs to make major changes. Measures outlined in the coalition agreement indicate that the existing imbalance in the so called support and claim-approach ("Fördern und Fordern") for the long-term unemployed will be finally readjusted towards supportive policy measures such as training. The reform of the in-work benefit element should aim at supporting sustainable employment subject to social security contributions. However, to live up to its name, the citizen's income must ensure genuine social participation for those receiving the citizen's income.

An Assessment of Covid-19 Factors which Influence Non-Compliance of Payments in Respect of Social Security Contributions in Ghana

COVID-19 has been wreaking havoc on the business world for nearly two years, with most industries experiencing a significant decline in revenue. The major statutory agency in charge of regulating employee pension schemes in Ghana, the Social Security National Insurance Trust (SSNIT) Ghana, has also seen a drop in monthly contributions. As a result, the goal of the study was to see how the COVID-19 epidemic is affecting non-compliance with Ghana’s Social Security Monthly Contribution Payments. The study used a random sampling methodology to select 6 out of 19 decentralized governance structures in Accra, after which a purposive selection method was used to select 50 small and medium business enterprises for their perspectives on the study’s goals. The major research tool was the questionnaire, and the Statistical Package for Social Science (SPSS) was used to analyze the data collected in the field. COVID-19 appears to be taking a toll on the finances of small and medium-sized businesses that have made deals with SSNIT authorities to reschedule obligations related to default contributions, according to the findings. Although new projects have been placed on hold due to diminishing inflows, SSNIT’s commitment to employees and payment of pensions to elderly residents remains unaffected. In light of the a fore mentioned challenges posed by the pandemic, the study suggested that the Government of Ghana should seek concessionary loans from world-class lenders such as the World Bank to strengthen its local stabilization fund and inject a significant amount of funds to assist struggling SMEs in resuming operations.

Problems and Perspectives in Pension System: Case of Baltic States

In all states of European Union reforms in pension system are being made, likewise in Latvia. Demographic and economic problems that are occurred forces pension reforms to be made. New developed pension reform includes different processes, like – formation of financial equilibrium between incomes and costs, limit performance in going early in pension, increasing of age of going in pension, rebalancing between men and women. Simultaneous formation of state and private pension systems could prevent some of the major drawback in system of pension that undermines the pension system of nowadays. Unfortunately the high social security contributions of state sector persons lacks of money, for deposit in private pension funds. Using method of logic synthesis, as the target authors nominated to examine problems of pension systems in the Baltic States, as well as similarities and divergences in problems and perspectives, with the status of private pension funds in accumulating pension system.

Addressing the issue of undeclared work – Part I: Applying associative classification per the CRISP-DM methodology

Addressing undeclared work is a high priority in the labor field for government policymakers since it adversely affects all involved parties and results in significant losses in tax and social security contribution revenues. In the last years, the wide use of ICT in labor inspectorates and the considerable progress in data exchange have resulted in numerous databases dispersed in various units, yet these are not effectively used to increase their functions productivity. This study presents a detailed analysis of a data mining project per the CRISP-DM methodology aiming to assist the labor inspectorates in dealing with undeclared work and other labor law violations. It uses real past inspections data merged with companies characteristics and their employment details and examines the application of two Associative Classification algorithms, the CBA and CBA2, in combination with two types of datasets, a binary and a four-class. The produced models are assessed per the data mining goals and per the initial business objectives, and the research concludes proposing an innovative inspections recommendation tool proved to offer two major benefits: a mechanism for planning targeted inspections of improved efficiency and a knowledge repository for enhancing the inspectors understanding of those features linked with labor law violations.

Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022

The article deals with changes in personal income taxation in the Czech Republic in 2022 and their impact on the tax burden. The article also deals with the levy burden represented by payments for social security contributions. An extensive tax reform changing the method of taxation of income from dependent activities took place in the Czech Republic in 2021. Its continuing effects was added with impact of legislation changes after 1 January 2022. The most significant change is the increase in the taxpayer’s relief by CZK 3,000. The assessment of how these changes affect the tax burden was made by calculating the effective tax rates. The research methodology includes methods of regression and correlation analysis and methods for time-series analysing. The average wages used by the Czech Social Security Administration for the purposes of calculating social security contributions were used for the analysis. The results show that the tax burden has decreased since 2022 if basic taxpayer relief is applied. For the taxpayer, who, in addition to the taxpayer’s relief, also claims a tax credit for children, the tax burden increases slightly. Although in most cases, the income is subject to the nominal linear tax rate, in comparison with the previous year, there is an increase in the progressivity of the personal income tax due to the rise of the tax relief per taxpayer. On the other hand, social security contributions are both nominally and real linear. There are no significant reforms in this area in comparison with the tax burden. Due to the decrease in the tax burden, in some cases, the levy burden of social security contributions is higher, even though their nominal rate is lower than the nominal income tax rate.

Personal Income Taxes in the Middle East and North Africa: Prospects and Possibilities

With the exception of a few North African countries, personal income taxes (PITs) play little or no role in the Middle East and North Africa (MENA), often yielding less than 2 percent of gross domestic product (GDP) in revenue. This paper examines how PITs have evolved in recent decades, and what they might look like in the next 20 years. Throughout the region, top marginal tax rates on labour and business income of individuals have declined substantially, a trend that mirrors reductions in advanced and developing economies. Taxation of passive capital income has changed very little, and the revenue contribution from this source remains low throughout the region, averaging less than 1 percent of GDP and concentrated in oil-importing non-fragile states. Social security contributions (SSCs) have increased in importance in nearly all MENA countries, and some countries have introduced additional payroll taxes and levies. The combination of reduced marginal tax rates, light taxation of income from capital and business activities, and increases in SSCs has resulted in income tax systems that create disincentives to work and incentives for informality, and contribute little to government revenue and income redistribution. Given differences in economic and political structures, demographics, and starting points, the path to PIT and SSC reforms will vary across the region. Countries with relatively mature PIT/SSC systems, where revenue performance has improved in the past two decades, will increasingly need to balance revenue and equity objectives against efficiency objectives (in particular, labour market incentives and informality). Countries without a PIT will have to weigh whether a consumption tax/SSC system that mimics a flat tax on labour income is sufficient to diversify revenue away from oil, and whether to adopt PITs to address rising income and wealth inequality. Finally, fragile states, which face more political volatility and have weaker fiscal institutions than non-fragile states, will have to focus on simplicity of tax design and collection to be able to raise revenue from PITs.

УПРАВЛІННЯ ЗМІННИМИ ВИТРАТАМИ АГРАРНОГО ПІДПРИЄМСТВА

The article reveals the economic necessity of allocating variable costs from the costs in agricultural enterprise. The efficiency and expediency of enterprise management using the variable cost method. The behavior of costs in the production enterprise based on the properties of costs, the feasibility of making management decisions based on costing. In article was determined classification of costs, which makes it possible to analyze the break-even point for certain types of products, and to optimize the structure of products produced by the enterprise; determine the critical volume of production in kind and value; set the required amount of sales for profit; calculate the amount of additional orders that can be accepted by the company to ensure profitable work and operate in a self-financing mode, without attracting borrowed funds. The article analyzes the main items of direct costs of agricultural enterprises: raw materials and basic materials, purchased products and semi-finished products, auxiliary materials, basic salaries of production workers with social security contributions, energy resources for technology and more. The main items of indirect costs are production costs, costs for maintenance and operation of equipment, costs of ancillary production, administrative costs and more. These costs relate to each type of product in proportion to the distribution base established at the enterprise. The experience of companies confirms that in order to reduce variable costs, it is necessary to increase labor productivity and reduce costs. Most organizations try to implement the strategy of "scale effect" by using energy-saving methods, reducing goods in warehouses, using new options for managing the production process. The greatest effect is shown by the practice of retraining of workers, as well as the redistribution between individual participants in the process of their production responsibilities. The cost management technology will allow the management of the agricultural enterprise to obtain the necessary justifications for making various management decisions.

Winners and Losers of Immigration

We aim to identify winners and losers of a sudden inflow of low-skilled immigrants using a general equilibrium search and matching model in which employees, either native or nonnative, are heterogeneous with respect to their skill level and produce different types of goods. We estimate the short-term impact of this shock for Italy in the period 2008-2017 to be sizeable and highly asymmetric. In 2017, the real wages of low-skilled and high-skilled employees were 8% lower and 4% higher, respectively, compared to a counter-factual scenario with no non-natives. Similarly, employers working in the low-skilled market experienced a drop in profits of comparable magnitude, while the opposite happened to employers operating in the high-skilled market. Finally, the presence of non-natives led to a 10% increase in GDP and to an increment of approximately 70 billions € in Government revenues and 18 billions € in social security contributions. We argue that these results help rationalise the recent surge of anti-immigrant sentiments among the low-income segment of the Italian population.

Workers without borders? The rights of workers from the Balkans in the EU

EU citizens and third country nationals are formally in very different situations when it comes to mobility and rights in the EU, a picture which looks more blurred when we examine workers from south-east Europe. The newest, poorest members of the EU and their neighbouring accession countries in the western Balkans are not only experiencing demographic decline, youth exodus and a ‘brain drain’; they are also effectively subsidising the economic growth and lifestyle of richer European countries through their investment in the training of workers who leave their countries of origin, and via the subsequent loss of social security contributions. Based on interviews with mobile workers themselves and a wider literature review, we argue that the EU, governments and trade unions need to enforce existing legislation better and prevent exploitation; empower workers to understand, access and advance their rights; and ultimately rethink the economic relationship between the EU and the region of south-east Europe based on establishing a more balanced, more sustainable and more socially just development.

SUPPLEMENTARY PARENTAL BENEFIT – THE MUM 4 + PROGRAMME – EXPECTATIONS AND REALITY

In this article the regulations of the act on parental supplementary benefit of January 30, 2019 are thoroughly analysed. Supplementary parental benefit is granted to a person who gave birth to and raised or only raised at least four children and did not acquire the right to a pension or a pension paid to this person by the pension authority is smaller than the lowest pension. One is entitled to the benefit mentioned herein only in the case of not having means of subsistence because of not pursuing or discontinuing employment as a result of raising minimum four children. Supplementary parental benefit is in no way related to making social security contributions, it is a benefit financed by the state budget, which in a supplementary or substitutional way is linked to old age. In the legal sense, it is not a pension, but a special non-contributory monetary benefit of discretionary nature, which is granted only on request of the person of interest based on the administrative decision of the president of the Polish Social Insurance Institution (ZUS) or the Agricultural Social Insurance Fund (KRUS).

Tax Policy in the Slovak and Czech Economies

Today, society is struggling with the uncertainty caused by the pandemic of coronavirus disease 2019 (covid-19). Government budgets will face a real challenge in the coming years. This paper provides an overview of public finances and their condition over the past 20 years in the Slovak and Czech Republics. It investigates the possible effects of different tax type changes and also the option to cover budget losses. A simple dynamic stochastic general equilibrium (DSGE) model with three sectors was calibrated using data from 2018 and a stochastic analysis was performed. It was shown that the economy was more sensitive to shocks on social security contributions than to those on other taxes. The results may help support a reform of decreasing labour taxes, for which both Slovakia and Czechia have been waiting for a long time.

Gig Workers: The New Employment Form in the New Economy

Gig workers are part-time workers or freelancers offering their jobs and services via platform economy. The recent Covid-19 pandemic has highlighted the plight of gig workers, in which in most cases, they do not receive similar benefits and perks associated with permanent jobs. This study explores the future direction of the gig economy in Malaysia. A survey questionnaire was distributed to 200 respondents from Universiti Sains Islam Malaysia in August 2020 based on purposive sampling. The results suggest that most of the respondents have at one point, during the movement control order (MCO), involved in gig jobs such as dropship, courier services, and food delivery. They feel that gig jobs have a good prospect and contribution to the economy. For the employers, benefits such as social security contributions and medical benefits received by permanent staff should be made available for gig workers subject to negotiated terms. For gig workers, they need to continue the process of upskilling and reskilling to remain competitive in the job market. Policymakers may utilize the information of the market structure and demand for the gig jobs labor market and devise appropriate strategies to support the gig economy as a new source of growth.

Informality in the time of COVID-19 in Latin America: Implications and policy options.

This paper analyzes the dynamics of the labor market in Latin America during the COVID-19 pandemic. After a decade of a virtuous circle of growth with the creation of formal jobs, the pandemic has had an considerable impact on the region’s labor market, generating an unparalleled increase in the proportion of the inactive population, considerable reductions in informality, and, in contrast, smaller fluctuations in formal jobs. In this context, the formal sector, given its lower flexibility, became a "social safety net" that preserved the stability of employment and wages. Based on the findings presented in this paper, it is projected that, starting in 2021, informality will grow to levels higher than those of the pre-COVID-19 era–with 7.56 million additional informal jobs–as a result of the population returning to the labor market to compensate for the declines in incomes. According to the simulations presented, postponing or forgiving income tax payments and social security contributions conditional on the generation of formal jobs could reduce the growth of informality by 50 to 75 percent. Achieving educational improvements has the potential to reduce it by 50 percent.

The Design of Covid-19 Recovery Contributions: Taxes or Social Security Contributions?

To cover the large financial spending caused by the Covid-19 pandemic, countries worldwide are forced to take substantial fiscal actions. This contribution takes a closer look at the extent to which EU law has an influence (restrictive or otherwise) on the freedom of Member States to opt for (additional) taxes and/or social contributions as a means to finance the (additional) deficits in their social security system. First, a brief numerical overview will be given of the various sources of financing and expenditures of social security in the European Union (II). Subsequently, the question will be addressed to which extent the concept of social security contributions under European Union law interferes with the national definition of taxes (III). The most relevant rulings of the European Court of Justice (CJEU) in this respect will be discussed (IV) followed by a number of final considerations (V). Covid-19 Recovery Contributions, Concept of tax, Social Security Contribution, Wealth Tax, Tax on (Real) Estate, Financing of Social Security, Regulation (EC) No 883/2004, Double Tax Convention, National (Tax) Sovereignty, Annual Tax on Securities Accounts

Sickle Cell Disease in Sweden - Prevalence and Resource Use Estimated through Population-Based National Registers

BACKGROUNDSickle cell disease (SCD) is an autosomal recessive disorder characterized by abnormal hemoglobin. SCD causes hemolytic anemia, vaso-occlusion leading to vaso-occlusive crises (VOC) and contributing to organ damage and early death. SCD is most prevalent in sub-Saharan Africa and the Middle East, but also countries such as Brazil, India and US, have comparatively high frequencies of SCD. Global migration has contributed to a greater geographical spread. The prevalence of SCD in Sweden is unknown.OBJECTIVEThe primary objectives of this study were to estimate the 1-year prevalence of SCD and SCD-associated resource use in Sweden. Secondary objectives were to estimate birth incidence, treatment patterns and survival.PATIENTSPatients with an ICD-10 diagnosis code for SCD (any D57 [excluding D57.3, sickle cell trait]) were identified from the Swedish Patient Registry (between January 1 st 2001 and June 30 th 2018). Patients were assessed for 1-year prevalence and resource use per calendar year for a follow-up period of 13 years (2006-2018).METHODSPatients were considered prevalent from birth or immigration to death or emigration. Resource use from specialized care, including all events recorded in the registry with any D57 as the main diagnosis was assessed in the follow up period 2006-2018 as number of outpatient visits and inpatient stays. Costs for this hospital resource use were estimated through remuneration amounts based on diagnosis related groups. Data on sick leave days and days with disability pension due to SCD in patients in working age (18-65 years) were retrieved from the Swedish Social Security Agency and costed with the mean salary in Sweden, plus social security contributions. Costs are reported in 2019 Swedish Krona (SEK, ≈$ 0.1).RESULTSOne-year prevalence of all SCD diagnosis increased from 504 patients (5.53 per 100,000 population) in 2006 to 670 patients (6.55 per 100,000 population) in 2018. The 1-year prevalence of SCD patients ever recorded with an ICD-10 code for SCD with VOC (D57.0) increased from 139 patients (1.53 per 100,000 population) in 2006 to 260 patients (2.54 per 100,000 population) in 2018. The proportion of prevalent patients that were born in Sweden decreased over the years, from approximately 55% in the beginning of the study period to 45% in the end of the study period. The mean and median age of the SCD population decreased over the study period. Individuals with SCD and VOC were, on average younger than the other SCD (D57) subgroups.Birth incidence was captured by calendar year 2006-2018 and was highest in 2007 with 15 children born with SCD. For Swedish-born children with SCD during the patient identification time (n=123), the mean time to identification in the registers was 2.6 years (SD 2.7, range 0-16 years).Hospital outpatient visits and inpatient stays with SCD (all events with D57 recorded) as main diagnosis increased from 57 to 189, and 250 to 1,003, respectively, over the years 2006-2018. This corresponded to costs of inpatient care increasing from 1.4 million (M) SEK in 2006 to 7.3 M SEK in 2018 and costs of outpatient visits increasing from 0.9 M SEK in 2006 to 4.6 M SEK in 2018. The vast majority of costs were incurred in individuals ever recorded with a SCD with VOC diagnosis (D57.0). The most frequent hospital treatment was blood transfusion, with 8-11% of patients receiving transfusion in each year studied, especially common in SCD and VOC diagnosis. The prescribed treatment with the highest increase of uptake over the study period were hydroxyurea, vitamins and paracetamol in all SCD.Individuals in working age had on average 2.3 days of sick leave per patient-year due to SCD (D57), and approximately 4% of these patients received disability benefits because of their SCD.During the follow-up period, the median age at death was 74 years for all SCD and 69 years for SCD with crisis, this is 7-10 years and 12-15 years less compared to the Swedish general population respectively.CONCLUSIONThis study demonstrates that the prevalence, hospital resource use and associated costs have increased substantially in Sweden. In an era of emerging treatments for SCD we have for the first time comprehensively described epidemiological-, disease-related and economical aspects of SCD in Sweden. DisclosuresHernlund: ICON: Current Employment. Ivergård: ICON: Current Employment. Svedbom: ICON: Current Employment. Dibbern: Novartis: Current Employment. Stenling: Novartis: Current Employment. Sjöö: Novartis: Ended employment in the past 24 months. Vertuani: Novartis: Current Employment. Glenthøj: Saniona: Research Funding; Bristol Myers Squibb: Consultancy; Agios: Consultancy; Novo Nordisk: Honoraria; Novartis: Consultancy; Alexion: Research Funding; Sanofi: Research Funding; Bluebird Bio: Consultancy.

Financial Support to Polish Families Regarding Leisure, Including Those from Rural Areas, during the COVID-19 Pandemic: An Example of a Tourist Voucher

Purpose: The coronavirus pandemic has significantly affected the Polish economy and the tourism market. Following the quarantine lockdown and the restriction of the activity of many sectors, some people lost their jobs or were forced to remain at home. As part of counteracting the economic crisis, the Polish government launched a support fund program, the so-called Anti-crisis Shield. When the second wave of the pandemic arose, the Industry Shields program was implemented. A separate shield was provided for the tourism industry, which was offered preferential loans, the establishment of an additional stopover and the suspension of all social security contributions for the tourism industry. The aim of the study is to show the essence of the Tourist Voucher Program and to indicate how Polish families who benefit from this form of support rate this Program. Design/Approach/Methodology: A pilot study was carried out with the use of the diagnostic poll method, using the survey technique and a questionnaire form as a research tool. The study was conducted in September 2021 on a sample of 438 people from all over Poland. Due to the termination of the program in 2022, the topic requires further comparative empirical research. Findings: The research conducted has shown that the Tourist Voucher Program aroused great interest. The respondents mostly paid with the Voucher for their stays at agritourism farms or guesthouses, thereby fulfilling their children's dreams, which would not have been possible had it not been for the Program. According to the majority of the respondents, the Program was deemed favourable despite the fact that part of the respondents considered the support amount of PLN 500 as insufficient. Practical Implications: The Tourist Voucher Program is an additional support, both for those Polish families affected by the economic slowdown caused by the COVID-19 pandemic as well as for tourist entrepreneurs and public benefit organizations who have wished to continue accepting Voucher payments for hotel services or tourist events. Originality/Value: The proposed solutions in the form of the Tourist Voucher are supposed to contribute to the development of the tourism industry in Poland and help Polish families to decide to go on vacation and indicate that there are such and other support instruments.

Playing dead pool against the contributions system

• Life expectancy negatively affects contribution evasion. • Number of children positively affects contribution evasion, while the number of family members has a negative effect. • Factors affecting the individual’s expected pension income influence contribution evasion today. • Long-term financial assets revenues and the intertemporal preference rate are positively related to contributions evasion. This paper examines the rationale behind social contribution evasion. The main idea is that evasion of social security contributions implies loss of future benefits, and in a system in which pensions are proportional to contributions, one would expect that, ceteris paribus , a decrease in the alternative measures of saving towards one’s pension or an increase in subjective life expectancy would lead workers to contribute more towards their own pensions. By using OLS and Tobit estimators, we test whether contribution evasion is part of an intertemporal portfolio allocation and competes with other forms of wealth-accumulating assets. Empirical results on repeated cross-sectional Italian microdata confirm that contribution evasion decreases as life expectancy increases, and increases when the return on other long-term wealth-accumulating assets increases.

Effects of the award of public service contracts on the performance and payroll of winning firms

Abstract We investigate the effects of an exogenous demand shock arising from the award of public service contracts by Italian public administrations in 2015 on a sample of 1782 winning small and medium firms that were not awarded any contract during the previous 3 years. Using a difference-in-differences model with continuous treatments estimated on a propensity score matched sample, our results reveal that higher awarded values enhance various performance dimensions of the winning firms as well as their average payroll per employee. Nonetheless, higher winning rebates moderate the positive effects of the award on payroll by inducing the winning firms to downward manage both salaries and social security contributions per employee to maintain their desired level of performance. The effects are mostly significant for smaller microenterprises. In addition, winning rebates negatively affect the performance of firms in the construction industry by leading these firms to downward manage the payroll of their employees more aggressively than firms in other industries. Our findings provide novel insights for the implementation of industrial policies aimed at achieving sustainable macroeconomic and social goals, within the business fabric, through the effective management of public service procurement.