Specific Tax Rates Research Articles

Sugar taxation policy and sugar consumption in Malaysia

Malaysia has been taking initiatives to combat obesity as well as non-communicable diseases. A sugar-sweetened beverage (SSBs) tax was proposed in 2014 and implemented in 2019 with an excise duty of RM0.40 per litre for ready-to-drink sugar content. This article aimed to spark a discussion about Malaysia's current sugar tax policies to reduce excessive sugar consumption among Malaysians. However, the alarming rise in the number of obesity and diet-related noncommunicable diseases indicates that the sugar tax control measures are less effective in combating health issues. This study compares Malaysia's neighbours' sugar tax policies and other sugar consumption-related measures. To combat the emerging sugar-related health issues in Malaysia, the government should collaborate with food manufacturers to reduce the amount of sugar in their food production, abate sugar-containing products’ promotion, educate the consequences of excess sugar consumption at all levels of education, apply sugar taxes with lower tax base rate and specific tax rate depends on sugar addition, and form a regional policy between neighbours.

Progressive income tax as a driver for the development of high-tech industries in Russia

The study tests the hypothesis that Russia’s transition from flat to progressive income taxation will produce revenue that would be sufficient for the advancement of high-tech industries. To test this hypothesis, we considered two scenarios of the reform – the two-tiered system, which has been implemented since 2021, and the project of a four-tiered system proposed by the Liberal Democratic Party. To estimate the effects of the tax reform, we calculated the revenues from taxing high-income taxpayer groups and subgroups at specific tax rates. As a result, it was found that the reform could produce 187 billion Rubles in extra revenue, which means that there is a vast discrepancy between the calculated estimates and the government’s expectations (60 billion Rubles). In other words, the Russian government significantly underestimates the potential of the income tax. According to the second scenario, which aims to build a more sophisticated income tax system, the revenue would be 1.1 trillion Rubles. Thus, a well-designed scale of the personal income tax will enable the government to considerably enhance this tool’s fiscal efficiency. The calculations of the extra revenue generated by the reform relied on the statistics of the World Inequality Database (WID) for 2019. To test the relevance of the input and output data, we conducted a comparative analysis at the micro-level by looking at the wage levels in Russian, American and European space corporations. We found that the micro-economic data are closer to the WID statistics rather than to Rosstat, which confirmed the accuracy of our results. Our calculations have confirmed the general hypothesis and showed that the extra revenue from the reform will enable the government to fully modernize microelectronics and the geothermal industry in Russia.

Główne zagadnienia problematyczne związane z opodatkowaniem nieruchomości w Republice Czeskiej

Niniejszy artykuł ma na celu zainicjowanie debaty na temat pobieranego okresowo podatku od nieruchomości w Republice Czeskiej, a także wskazanie najważniejszych problemów, jakich nastręczają obowiązujące przepisy prawne, oraz zaproponowanie możliwych rozwiązań de lege ferenda. Potwierdzono hipotezę, że podatek od nieruchomości jest podatkiem korzystnym i stanowi tradycyjny element czeskiego systemu podatkowego. Najbardziej problematyczną kwestią są niskie dochody podatkowe. Podatek katastralny nie wydaje się jednak skutecznym rozwiązaniem i dlatego należy utrzymać system, w ramach którego podstawę opodatkowania nieruchomości ustala się w oparciu o wielkość powierzchni. Ustawodawstwo powinno przewidywać jedną maksymalną stawkę podatkową dla każdego typu nieruchomości, natomiast gminy powinny mieć prawo do ustalania własnych stawek podatkowych poniżej tego poziomu. W przepisach prawa powinna także funkcjonować dodatkowa (standardowa) stawka podatkowa, obowiązująca w gminach, które nie ustalają własnych stawek podatkowych.

Sugary drink excise tax policy process and implementation: Case study from Saudi Arabia

Saudi Arabia’s residents are the fifth-largest consumers of calories from sugar-sweetened beverage (SSB) globally, likely contributing to high rates of overweight and obesity. In 2017, Saudi Arabia implemented the largest SSB tax worldwide, increasing the prices of soft and energy drinks by 50% and 100%, respectively. The purpose of this research is to add to the global discussion on SSB tax design and policy process by highlighting the Saudi Arabia’s barriers and facilitators to implementation. We conducted semi-structured interviews with a purposive sample of ten informants among key stakeholders, including government, industry, and health organizations who worked on the sugary drink tax in Saudi Arabia. Interviews were conducted in the five months following tax implementation in June 2017. The questions were designed to understand how the tax originated, the motivations for its structure, and the barriers and facilitators associated with its implementation. A descriptive analysis was conducted. Our results suggest that energy drinks were perceived as more harmful than other soft drinks and thus taxed at a higher rate. We also found that the tax was perceived to be easy to administer by all stakeholders. Post tax implementation, some stakeholders expressed concern about pressures from the World Trade Organization requiring scientific justification for the specific tax rates and beverage categories. In response to the tax, the beverage industry reportedly reduced retail prices and absorbed some of the tax costs. There is a strong interest from the Saudi government in expanding the tax to include all SSBs and other food categories. In conclusion, there were several factors unique to the Saudi environment that facilitated tax implementation. However, our study highlights the importance of explicitly articulating a clear evidence-based rationale for SSB tax administration to enhance sustainability.

Mineral Extraction Tax: Evolution and New Realities

The subject of the research is mineral extraction tax evolution as the main rental payment in mineral resources sector.The purposesof the work are to determine the role of the mineral extraction tax in the current taxation system, assessment of its influence on the extracting industries development, studying key problems in taxation methodology and policy, proposals on the development of mineral extraction tax mechanisms submission. The author analyses the tax current state, compliance to the criteria of economic efficiency and principles of taxation, the reforming of the mineral extraction tax and the newest trends in the sphere are assessed.The author emphasizes scientific basis for oil metering perfection, correlation between metrological and economic aspects of this metering, assessment of influence of systemic approach to the raw materials transported by oil-trunk pipelines quality.The author also analyses special tax relieves in mineral extraction taxation and their influence on the budget revenue, considers the unsolved problems of cost of extracted solid minerals and tax incentives for import substitution of some minerals basing on the public statistics, tax statistics, forecasts for social economic development and the main directions of budget, tax and customs policies. The research resulted in arguments for the necessity of transition to specific tax rates for solid mineral extraction taxation that should be adjusted taking into consideration some factors that are used for tax differentiation in taxation of hydrocarbon extraction; also conceptual features of reliable inventory-making for hydrocarbons have been developed; an assessment of special tax relieves in mineral extraction taxation is given. It is concluded that application of the rated method of calculating taxation base in mineral extraction taxation is economically meaningless as the real value of the extracted materials is not taken into account. Taxation base for mineral extraction must be defined not as value, but as the amount of the extracted mineral, and tax rate should be defined according a proposed formular.

A cost–benefit analysis of the environmental taxation policy in China: A frontier analysis‐based environmentally extended input–output optimization method

AbstractChina's high‐speed economic development and reliance on overconsumption of natural resources have led to serious environmental pollution. Environmental taxation is seen as an effective economic tool to help mitigate air pollution. In order to assess the effects of different scenarios of environmental taxation policies, we propose a frontier‐based environmentally extended input–output optimization model with explicit emission abatement sectors to reflect the inputs and benefits of abatement. Frontier analysis ensures policy scenarios are assessed under the same technical efficiency benchmark, while input–output analysis depicts the wide range of economic transactions among sectors of an economy. Four scenarios are considered in this study, which are increasing specific tax rates of SO2, NOx, and soot and dust separately and increasing all three tax rates simultaneously. Our estimation results show that: raising tax rates of SO2, NOx, and soot and dust simultaneously would have the highest emission reduction effects, with the SO2 tax rate making the greatest contribution to emission reduction. Raising the soot and dust tax rate is the most environmentally friendly strategy due to its highest abatement to welfare through avoided health costs. The combination of frontier analysis and input–output analysis provides policy makers a comprehensive and sectoral approach to assess costs and benefits of environmental taxation.

Simulation and Analysis on the Optimal Tax Rate of Water Resources in Yunnan Province

The shortage of water resources has become an increasingly common problem. One of the biggest challenges in China’s current economic development is the prominent contradiction between water supply and demand in some densely populated areas. Although Yunnan Province has abundant water resources, due to factors such as precipitation timing, uneven distribution, regional geological conditions and low water-use efficiency, there are also contradictions in water supply and demand. In order to accelerate the transformation of extensive regional water resources utilization and achieve sustainable regional economy development, this paper establishes a Computable General Equilibrium Model (CGE) incorporating water resources elements of Yunnan Province, and simulates the water price changes. The conclusion is that the reasonable tax rate of water resources in Yunnan Province should be about 13%. Considering the corresponding average water price, the average specific tax rate of water resources should be 0.21 yuan/m3.

Sugar-sweetened beverage prices: Variations by beverage, food store, and neighborhood characteristics, 2017.

Sugar-sweetened beverage (SSB) consumption is associated with obesity, type 2 diabetes, and cardiovascular disease. A number of U.S. jurisdictions have levied volume-based specific SSB taxes. This study estimated baseline mean SSB prices across categories and sizes as this will help to determine the percentage increase in price resulting from the imposition of specific taxes.Data on food store SSB prices were collected in 2017 in Cook County, IL, St. Louis City/County, MO, Oakland, CA, and Sacramento, CA (N = 11,767 product-level observations from 581 stores). Data were weighted to represent volume sold by category and size. Mean prices per ounce were computed across categories and sizes. Linear regression models, clustered on store, were run to estimate associations between price per ounce and product characteristics, neighborhood (linked by census tract) characteristics, store type, and site.Weighted summary statistics show that the mean price of SSBs was 4.8 cents/oz. Soda was least expensive (3.4 cents/oz), followed by sports drinks (4.8 cents/oz), juice drinks (5.2 cents/oz), ready-to-drink tea/coffee (7.8 cents/oz), and energy drinks (19.9 cents/oz). Prices were higher for individual-sized (9.6 cents/oz) compared to family-sized drinks (>1 L/multi-pack; 3.5 cents/oz). Regression results revealed that prices were lower in stores in majority non-Hispanic black tracts and varied by beverage characteristics and store type but not tract-level socioeconomic status.Given substantial variation in prices by SSB category, a penny-per-ounce SSB tax, if fully passed through, would increase soda prices by 29% versus 5% for energy drinks, highlighting the potential importance of different specific tax rates across beverage categories.

Taxes and leverage at multinational corporations

Empirical research has struggled to show that variation in corporate capital structure arises from variation in estimated corporate income tax rates. We argue that, in previous studies, both the tax rates applied to multinational corporations and the taxable income earned have been mismeasured. Using the Bureau of Economic Analysis annual survey sample combined with each firm's income and country specific tax rate, we find that firms do have higher leverage ratios and lower interest coverage ratios when they operate in countries with higher tax rates, as theory would suggest. The trade-off theory of capital structure continues to have empirical support.

Firm strategy and consumer behaviour under a complex tobacco tax system: implications for the effectiveness of taxation on tobacco control

BackgroundThe current tobacco taxation scheme in Turkey, a mix of high ad valorem tax and low specific tax, contains incentives for firms and consumers to change pricing and consumption patterns,...

Detection of discoloration in diesel fuel based on gas chromatographic fingerprints.

In the countries of the European Community, diesel fuel samples are spiked with Solvent Yellow 124 and either Solvent Red 19 or Solvent Red 164. Their presence at a given concentration indicates the specific tax rate and determines the usage of fuel. The removal of these so-called excise duty components, which is known as fuel “laundering”, is an illegal action that causes a substantial loss in a government’s budget. The aim of our study was to prove that genuine diesel fuel samples and their counterfeit variants (obtained from a simulated sorption process) can be differentiated by using their gas chromatographic fingerprints that are registered with a flame ionization detector. To achieve this aim, a discriminant partial least squares analysis, PLS-DA, for the genuine and counterfeit oil fingerprints after a baseline correction and the alignment of peaks was constructed and validated. Uninformative variables elimination (UVE), variable importance in projection (VIP), and selectivity ratio (SR), which were coupled with a bootstrap procedure, were adapted in PLS-DA in order to limit the possibility of model overfitting. Several major chemical components within the regions that are relevant to the discriminant problem were suggested as being the most influential. We also found that the bootstrap variants of UVE-PLS-DA and SR-PLS-DA have excellent predictive abilities for a limited number of gas chromatographic features, 14 and 16, respectively. This conclusion was also supported by the unitary values that were obtained for the area under the receiver operating curve (AUC) independently for the model and test sets.

Economic Instruments for Water Pollution Management: A Case Study

Although legal standards are in place for socially acceptable ambient concentration level of a pollutant, a firm has an incentive to shirk on pollution control as huge costs are at stake Profit being the objective of firm, which comes from a market price which does not reflect society`s preferences for environmental protection. Therefore, producer has no incentive to supply the socially optimal level of pollution control. Hence, it is imperative on the part of economists to provide an incentive based alternative to inflexible CAC regulations. Present study attempts to design pollutant specific tax rates to advocate the use of economic instrument for water pollution management.

Debt and Taxes at Multinational Corporations

Empirical research has struggled to document the variation in recent corporate capital structures as arising from variation in estimated corporate income tax rates. We argue that in previous studies, both the tax rates being applied to multinational corporations and the taxable income earned has been miss-measured, a result of firms operating in many foreign countries. Using a sample of multinational firms collected in the Bureau of Economic Analysis’ annual survey combined with each firm’s respective income and country specific tax rate, we revisit this tax-leverage puzzle. Empirically we find that firms do have higher leverage ratios and lower interest coverage ratios when they operate in countries with higher tax rates, as theory would suggest. Our results demonstrate that the primary benefit of leverage under the trade-off theory of capital structure continues to have empirical support.

IS THE TWO-CHOSEN-ONE (2C1) TAXATION IMPLEMENTATION IN THAILAND VALID TO SERVE AS A MODEL FOR HOW 2C1 TAXATION REALLY WORKS?

According to Jürgen Rehm and his colleagues, the alcohol taxation approach introduced in Thailand in the Alcohol Act 1950, the so-called two-chosen-one (2C1) taxation, aims specifically to prevent drinking initiation in addition to reducing alcohol-attributable harms. The 2C1 taxation is a system where the actual tax rate for a certain alcoholic beverage is that which is the higher one when taxes are calculated according to two alternatives, on one hand as a specific tax which is a function of the alcohol content of the beverage and, on the other hand, as an ad valorem tax, which is a function of the price of the beverage. Rehm and his colleagues conclude that ‘2C1 taxation has the potential to simultaneously reduce alcohol consumption and prevent drinking initiation among youth . . .’1. This potential impact—they do not claim that it is a real impact—is the result of the unique properties of the 2C1. The 2C1 taxation is said to put higher tax on beverages which are preferred by heavy drinkers as well as on those beverages which are preferred by potential new alcohol consumers, especially youngsters. It is true that in 2C1 taxation, taxes on cheap alcoholic beverages are determined on the basis of specific tax because it gives a higher tax on cheap alcoholic beverages than ad valorem taxation. Expensive alcoholic beverages, on the other hand, are taxed on the basis of ad valorem taxes putting their taxes onto a higher level than specific taxes on these beverages. Basically, the effects of the Thai 2C1 taxation are, or should be, what Rehm and his colleagues are presenting. However, we can question some of their assumptions. First, are heavy drinkers really preferring certain beverages, or are the beverages they actually prefer an outcome of their full price? For instance, in Finland in the early 1950s white spirits were the beverages preferred by heavy alcohol consumers. After certain changes in relative alcohol availability fortified wines became, in the 1950s, the most important beverage for becoming intoxicated, and after changes in relative physical and economic availability in the early 2000s semisweet white wines were the beverages preferred by marginalized heavy alcohol consumers 2, 3. It is also not clear that young novice drinkers would prefer certain alcoholic beverages independent of their full prices. Secondly, the paper accepts Thailand's 2C1 taxation's official motivations as they are most certainly written in the documents. However, at least when trying to propose the Thai alcohol taxation as a model for low- and middle-income countries, it should be remembered that the state has several interests with regard to alcohol. As well as maintaining public order and safety and the health of the population, the state also has an economic development interest with regard to the alcohol industry and trade 4. It can be assumed that these economic interests are the explanation as to why white spirits, followed by wine coolers, have excise tax rates as 1.82 Thai Baht (THB) and 2.36 THB per 12 g of alcohol compared to about 6 THB with regard to domestic whisky and at least 7 THB with regard to domestic beer. With reference to white spirits, this exceptionally low excise tax rate is based on specific tax; and regarding wine coolers on 25% ad valorem tax compared to 60% ad valorem tax regarding beer. The 2C1 model is an interesting model; but in order to investigate its real effects on youthful drinking and alcohol-related harm, we need to have a case where this model is implemented as it is really supposed to work, with the same specific tax rate as well as with the same ad valorem percentage for all beverages, not as it is now working in Thailand, with important exceptions motivated by political reality. None.

COMMODITY TAX STRUCTURE AND INFORMAL ACTIVITY

Commodity tax structure affects the firm's choice between formality and informality. An increase in the specific tax rate, relative to an equivalent increase in ad valorem taxation, makes informality attractive to more firms. Formality becomes attractive at lower levels of profits under ad valorem taxation. For both the maximization of welfare subject to a revenue constraint and the unconstrained maximization of revenue, the optimal rate of specific taxation is zero.

China Tax Guide (review)

Reviews 203 Michael J. Moser and Winston K. Zee. China Tax Guide. Second edition. NewYork: Oxford University Press, 1993. 316 pp. Hardcover $38. This second edition of China Tax Guide provides a general introduction to the taxation of foreign nationals and foreign business operations in the People's Republic of China. It consists of four parts as follows: an introduction to China's tax system; forms of doing business in China and their tax consequences; explanations of the main types of tax; and special tax regimes in the special investment areas plus some bilateral tax treaties between China and other countries. The content of this book can be divided into four groups. In group 1 (chapter 1), the authors describe China's aim in fhe taxation of foreigners, the principal taxes in China, tax legislation (which is usually separated into three sections), and tax administration. Then, in group 2 (chapters 2 and 13), they describe the most common forms ofbusiness transactions and their main tax consequences from a transactional perspective. The forms of doing business in China discussed here are Sale and Purchase; Compensation Trade and Processing and Assembly Operations ; Financing Transfer; Consignment Sales and Service Centers; Representative Offices; Contracted Projects; Equity Joint Ventures; and Co-operative Joint Ventures and Wholly Foreign-owned Enterprises. In group 3 (chapters 3 to 10), Moser and Zee cover the structure and regulation of nine principal types of tax in China: the Individual Income Tax (chapter 3), the Joint Venture Income Tax (chapter 4), the Foreign Enterprises Income Tax (chapter 5), the Unified Tax (chapter 6), the Consolidated Tax and Related Taxes (chapter 7), the Real Estate Tax (chapter 8), the Vehicle and Vessel Licence Tax (chapter 8), the Stamp Tax (chapter 9), and Customs Duties and Related Taxes (chapter 10). In each of the first four chapters mentioned above, the authors give the definition and the scope of the specific tax, and then focus on the calculation, with concrete examples for every step. The calculation usually includes explanations of Accounting Rules, Deductions, Depreciations, Amortization, Valuation of Inventories , Intercompany Expenses, Losses, Capital Gains, and Transferring Pricing, if necessary. The book also mentions tax rates and holidays, reinvestment ofprofits, credits, tax payment, penalties, and so on. For the last five types of tax in group 3, the authors describe the related regulatory framework and the manner in which it is applied in practice. Tax exemptions and deductions are mentioned in these chapters. Finally, in group 4 (chap-©1994 by University ters xl and 12), the book details the preferential taxrules developed for application in the Special Economic Zones, the Pudong New Area, the Fourteen Coastal 204 China Review International: Vol. 1, No. 2, Fall 1994 Cities, the Economie and Technological Industrial Development Zones (ETIDZs), the Coastal Economic Zones, and High and New Technological Industrial Development Zones, and China's bilateral tax treaties with a number of other countries. The book satisfies the foreign investors' interests most in chapter 11, which provides an overview of the tax rules in some of China's special investment areas and focuses on tax exemptions and deductions available to foreigners. China Tax Guide provides an impressively concise and yet comprehensive introduction to China's increasingly complex tax system as it was in operation before 1994. The two authors tried their best to keep the book up-to-date, since some tax rules discussed in it were promulgated as late as 1991. The book is easy to understand because there are many practical examples employed by die authors to illustrate the application of the legislation under discussion. It is of great value especially for foreign companies and foreign investment enterprises in China. Besides the concrete examples mentioned above, fhe book also tells readers what kinds of organizations are subject to what kinds of tax in China. A foreigner can easily grasp the related content of China's tax system, which covers over four decades (from fhe 1950s to Aie 1990s). The book also displays Specimens of Tax Forms in China, translated Selected Legislation, a comparative chart of ChineseForeign Tax Treaties, and some tables concerning specific tax rates. All these provide readers with greater details of China's tax system, and this...

Estimating the Soviet Wage Bill from the Receipts of the Social Insurance System

In recent years information has appeared in various Soviet publications which has enabled students of the Soviet economy to compute the average wage of Soviet workers and employees with a considerable degree of confidence. Generally the data provided have been in the form of percentage increases in the average wage above a base year for which the average wage is known or has been reliably estimated. Mtuch of this information has been summarized in an article by Holzman, and he presents there an index of the rise in the average Soviet wage since 1928.' This development very likely also contributes to increased accuracy in estimates of the wage bill, as figures are readily available on the size of the nonagricultural labor force for thiese years. But gaps still exist in our knowledge. Statistics of the type used by Holzman andi others in calculating the average wage have not been published for some of the years prior to 1950. However, inforination recently discovered on the average social insurance tax rates makes it possible to utilize social insurance receipts to estimate the wage bill and average wage with greater confidence; and, in the absence of more direct indications. greater reliance can now be placed on this technique. It is interesting to note that during the lengthy period when the Soviets issued almost no data on the wage bill or average wage they continued to publish statistics on social insurance income, which is derived from a payroll tax. A brief description of how the social insurance tax is administered will clarify the relationship between the wage bill and social insurance receipts. The system of social insurance taxation that has been in effect since 1937 provides for the assignment of a specific tax rate to each central trade union organization, and the agencies that employ labor pay the rate applicable to the union that has jurisdiction over their employees.