Tax Base Research Articles

Factor influencing taxpayer compliance on voluntary tax disclosure program initiative: Case of Kenya revenue authority southern region

Tax is the primary source of government revenue, its vital component in running daily government activities. Not collecting enough tax causes the government to strain or stalling of its mandates, therefore its role of every government to mitigate and maximize its tax collection scope. The research sought to investigate the factors influencing taxpayer compliance on voluntary tax disclosure program in Kenya Revenue Authority, case of Southern region. The specific objectives of these research included, to assess the effects of Tax Sanctions on the taxpayer on participation in a voluntary tax disclosure program. To determine the impact of subjective norms of taxpayer participation on the Voluntary tax disclosure program. To evaluate the influence of taxpayer knowledge on participation in a voluntary tax disclosure program. The main challenge that was thematic for investigation, why despite the opportunity to declare asset without punitive punishment, still there is few uptakes for the program. The geographical location of the research was in Southern Region Domestic Taxes department on its six tax office namely; Voi, Mombasa South, Lamu, Malindi, Mombasa North and Diani for the financial year 2023/2024. The study sought to use descriptive approach, where a sample size of 150 was derived from a population of 230 staffs in Compliance Domestic taxes. Data collection was done using online well-structured questionnaire via Kobo-Collect in a random sampling and analyzed using SPSS version 28. To test validity and reliability of the data pilot test was conducted and Cronbach alpha and KMO-test proved data to be reliable and valid. The output of the analysis showed the regression model whose covariates, Tax sanction (t=2.448, P<0.016) subjective norm (t=3.347, P<0.001) and taxpayer Knowledge (t=7.827, P<0.00) were all significant at 95% level. Moreover, the R2 =0.951 which means the exploratory variables explained 95.1% variation of Compliance to the Voluntary tax disclosure. The ANOVA result showed the data was fit to the model was good at (F=942.61, p<0.00). The study concluded indeed, Subjective norms, Tax Sanction and Taxpayer Knowledge influences greatly compliance of Taxpayer towards Voluntary tax disclosure. The research implied that proper use of tax sanction such us fines, penalties, and interest on taxpayers would increase compliance. Also educating taxpayer is essential as the decisions made by some taxpayers depend on the knowledge they have acquired. Also on subjective norms, some behaviors are traceable as some are based on influence of association hence compliance officer need to continuous encourage taxpayer to comply. This research recommends that the authority through the compliance officer, use of subjective norms, Taxpayer knowledge and Tax sanction as a mitigating strategy to mitigate on Voluntary tax disclosure, through this it will increase tax base and revenue mobilization and compliance status of Taxpayers.

Optimizing provincial tax compliance: Implementing good corporate governance pillars

Tax revenue in the province is still low, even though the central government has handed over the tax base to the regions for more than 20 years. The concept of GCG can improve performance and tax revenue in the regions. This study examines the relationship of each pillar of Good Corporate Governance (GCG) to tax compliance and determines the types of GCG pillars that can be prioritized for implementation in a local government agency. This study uses the regional financial management transparency index (ITPAD) as an indicator of the transparency pillar, the fiscal independence index (IKF) as an indicator of the independence pillar, and financial statement audit opinion for the accountability and responsibility pillars. Finally, the Gini ratio is an indicator of fairness. The research sample was taken from all 34 provinces in Indonesia. Secondary data is sourced from publications, books, web pages, and previous research from 2016 to 2020. This period was chosen to exclude data from the COVID-19 pandemic era in Indonesia. The analysis method is panel data multiple linear regression with a random effect model. The results showed that fiscal independence and transparency of a region's budget management positively influence public tax compliance in a provincial area in Indonesia, while the opinion of financial statements and the Gini ratio have no influence. This study implies that to improve public tax compliance in a provincial area in Indonesia, and local governments can prioritize the implementation of the transparency and independence pillars achieved by increasing the ITPAD and IKF scores in their regions. The Ministry of Home Affairs can also encourage regions to enhance transparency and independence by improving ITPAD and IKF so that tax revenue in the regions can increase.

Excise Control over the Tax Base for Excise Duty Taxation on Alcohol

Тhe correct determination of the tax base for taxation with excise duty is essential for the right calculation of the amount of excise obligation both for taxpayers and their customers as well as for its revenue control authority in Bulgaria – the Customs Agency. The article examines the legal framework of the excise tax base in Bulgaria on ethyl alcohol – spirit, distillates and spirit beverages, focusing on the determination and control of the quantity of product as its component. It presents the results of a study on the current normativepractical status as well as the possibilities for its improvement. The defended thesis is that the excise legislation has weaknesses, and excise control on alcohol should be improved. Recommendations for improving excise control are formulated.

Designing Net Asset-Based Income-Splitting Rules under Dual Income Tax

Abstract This article revisits the income-splitting regulations within the Nordic dual income tax framework. These regulations were introduced to counteract the inclination to transfer income between labor and capital income tax bases. They involve imputing a return on equity, considered as capital income, and taxing the residual portion at rates similar to those imposed on labor income. There are primarily two methods for computing imputed capital income. One method involves imputing a return based on the shares’ acquisition price (implemented in Sweden and Norway), while the other calculates a return using the net book assets of the company (utilized in Finland). This study examines the economic implications of the net asset-based splitting approach, an area not extensively explored in earlier literature. Our findings suggest that with appropriate selection of tax-parameter values, the net asset-based splitting system embodies the fundamental characteristics of a neutral corporate tax system akin to the ACE corporation tax. Consequently, our analysis indicates that the issues regarding incentive concerns in the Finnish taxation of closely held companies, highlighted in previous studies, stem more from erroneous parameter values rather than flawed underlying principles.

The Current State of the Russian Budget System and the Potential for Financing the Federal Budget Deficit

For the first time, Russia’s budget system is under large-scale stress in all areas: risks of losing the tax base due to international sanctions, a steady increase in unforeseen expenses, inflation risks, and rising debt servicing costs. In this regard, it is necessary to identify and analyze potential sources of financing the federal budget deficit as the main guarantor of budget stability. The article examines the state of the consolidated budget of the Russian Federation and the budgets of state extra-budgetary funds based on the results of the first half of 2024. It is shown that oil and gas revenues remain the main source of revenue growth. Among non-oil and gas revenues, personal income tax and VAT from domestic sales are growing at an accelerated rate. At the same time, the positive dynamics of some sectors of the Russian economy is largely due to budget financing. At the same time, inflation remains above target values, which forces the Central Bank of the Russian Federation to tighten monetary policy. The excess growth of federal budget expenditures and the increase in nominal rates threaten financial stability. In this regard, the article assesses the potential for financing the federal budget deficit in the context of strict borrowing restrictions. Based on the analysis of the state of the domestic federal loan bond market, a conclusion is made about the high risk of a liquidity crisis and the potential for placing domestic debt at the expense of non-bank financial institutions and individuals.

중위투표자 관점에서의 공공사회복지 지출 분석

This paper analyzes the growth of public social expenditures in Korea from a public choice perspective. Specifically, based on the median voter theory, we conduct an empirical analysis of social insurance expenditures such as national pension, national health insurance, and public social expenditures using time series data from 1993 to 2022. The empirical results support that changes in the budget constraint for lifetime utility maximization of the median voter, including financial assets, remaining life expectancy, and remaining working year, are associated with an increase in public social expenditure. In addition, macroeconomic variables such as the real interest rate, real economic growth, and the tax base per recipient are also found to affect public social expenditure. This paper suggests that as the age of the median voter increases, public social expenditures, including national pensions and national health insurance, are bound to increase both naturally and politically.

Taxing High-Net-Worth Individuals: Recommendations from an African Perspective

In this article, the author considers how African countries can increase their tax base by taxing “high-net-worth individuals” (HNWIs), a small but growing segment of society that has the potential to contribute to revenue collection but is largely undertaxed. While the article sets out the justifications for African countries to focus on the taxation of HNWIs, it also notes that countries generally face various challenges in taxing HNWIs. To address the challenges, the article refers to some international guidelines that African countries can adopt in order to effectively tax HNWIs. With South Africa being the country on the continent with the highest number of HNWIs, the article focuses on the approach it has taken to tax HNWIs, in the hope that South Africa’s success story can be emulated by other African countries that face challenges in ensuring tax compliance by HNWIs.

Social contribution on payroll and exemption from food allowance

This article aims to explore the legal indeterminacy surrounding the possibility of free transit of credits between meal vouchers and food vouchers and its impact on the exemption of social contributions on payroll. Employing the Logical-Semantic Constructivism method and foundations from the philosophy of language, the article seeks to clarify whether this practice affects eligibility for exemption. Initially, the article underscores the importance of revisiting the interpretation given to the tax benefit, considering new business models and in light of changes in labor relations, such as the increase in remote work. Companies that offer meal and food vouchers are important partners for employers, facilitating the provision of food benefits to employees. A rigorous analysis of legal language is emphasized to ensure scientific accuracy. The legal norm is discussed from two perspectives: a broad sense (propositions derived from legal statements) and a strict sense (propositions structured in hypothetical-conditional judgments capable of regulating intersubjective conduct). It analyzes the norm that establishes the social contribution on payroll, identifying its five criteria (material, spatial, temporal, personal, and quantitative). The material criterion is defined as the provision of remuneration in exchange for work performed. The tax base is the total remuneration paid to employees. The article discusses the exemption of food assistance as provided by legislation (CLT and Law 8,212/91), which excludes the social security contribution on in natura food provided to workers. The legislation allows food assistance to be offered through vouchers, provided they are used exclusively for the purchase of food. Federal Decree No. 10,854/2021 is analyzed to explain the necessity of keeping funds in separate accounts and ensuring their exclusive use for food, prohibiting withdrawals or transfers to accounts not linked to the Worker’s Food Program (PAT). The article concludes that the free transfer of credits between meal and food vouchers does not affect the exemption of food assistance, as long as the funds are used exclusively for the purchase of in natura food. Subordinate legislation does not impose significant restrictions on this practice, and even if it did, it could not supersede higher normative provisions that grant the exemption. Thus, the arrangement between meal and food credits does not limit the exemption from social contributions on payroll.

AN ANALYSIS OF GST IMPLEMENTATION AND TRENDS IN REVENUE COLLECTION FROM 2017-18 TO 2023-24

India’s Goods and Services Tax (GST), implemented on July 1, 2017, revolutionized the country's indirect tax system by replacing a complex array of taxes with a unified consumption tax. This study analyzes the implementation, features, and trends of GST from fiscal year 2017-18 to 2023-24, utilizing secondary data from the Economic Survey of India 2023-24. The total GST revenue has shown significant growth, rising from ₹5,39,601 crores in 2017-18 to ₹15,18,127 crores in 2023-24. The GST structure operates under a dual system, with Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) being key components, alongside the Integrated Goods and Services Tax (IGST) for inter-state trade. High-contributing states like Maharashtra and Karnataka have strengthened their positions, while states like Himachal Pradesh and Uttarakhand face challenges. The analysis also reveals fluctuations in revenue due to the COVID-19 pandemic, with a robust recovery in subsequent years. Key findings underscore the need for targeted interventions in lower-performing regions, improvements in tax administration, and policy adjustments to address the declining share of cess. This research highlights the pivotal role of GST in enhancing tax compliance and broadening the tax base, laying the groundwork for sustainable economic growth in India. KEY WORDS: Goods and Services Tax (GST), Tax Compliance, Indirect Taxation, Economic Growth, Public Finance

A Critical Analysis of Selected Aspects of Real Estate Taxation in the Context of Recent Legislative Amendments in the Czech Republic

The real estate tax is the sole property tax in the Czech Republic and has been part of its tax system since its establishment, i.e. since January 1, 1993. The Czech Republic has long been recommended by the Organisation for Economic Co-operation and Development (OECD) to increase the collection of this tax because its yield as a share of gross domestic product (GDP) is one of the lowest among all OECD and EU countries. The lower yield is in part attributable to the manner in which the tax base is determined. The Czech Republic, with the exception of a few minor instances, continues to employ the assessment-based rather than the value-based method of determining the tax base. Furthermore, the Czech Republic is encouraged to use the correction elements at the disposal of municipalities to influence the amount of property tax. This article examines the revenue aspect of real estate tax in the Czech Republic, including the determination of the tax base and the use of correction mechanisms. In light of these considerations, it is evident that the development of the Czech real estate tax system has been influenced by a number of factors, including the introduction of one of the most significant amendments to the Real Estate Tax Act in the country’s history. This amendment, known as the consolidation package, was implemented on January 1, 2024 and has had a profound impact on the current legislation.

The possibility of adopting a centralized electronic invoice system and its impact in determining the tax base: An analytical study of the opinions of a sample of academics, professionals and employees of income tax departments - Kurdistan Region of Iraq - Erbil city)

This research aims to demonstrate the extent to which tax departments (income tax) can adopt the central electronic invoice system as one of the modern technological systems that can be used by the tax authority in order to reach a fair tax base for taxpayers. To achieve the research objective, an electronic questionnaire was distributed to a sample of (104) individuals from accounting academics in universities and institutes in Erbil city and professionals and employees of income tax departments. The results were analyzed using the statistical program (SPSS). The research reached several conclusions, including that the central electronic invoice system is an effective tool to enhance transparency and efficiency in the tax system despite potential challenges. In addition, adopting this system will lead to improving the determination of the tax base, reducing tax evasion and stimulating the formal economy. Success in this field requires close cooperation between the government and companies to provide the appropriate technical and legal environment. There is a possibility for tax departments to adopt the electronic invoice system and work on it to develop the process of determining the tax base for taxpayers. The study recommended the necessity of spreading the culture of voluntary commitment to join the electronic invoice system and including the electronic invoice and other accounting programs in the curricula of accounting departments in colleges and institutes and conducting training courses and seminars for the tax community and technical workers on dealing with the electronic invoice system in tax departments.

Path to Green Economy: Analyzing Innovation, Investment and Taxation in Kazakhstan

The concept of a green economy has gained significant attention, aiming to achieve sustainable development without environmental harm. This study examines Kazakhstan's transition to a green economy, focusing on indicators such as green innovation, investment in environmental protection, and green taxes. Despite Kazakhstan's commitment to a carbon-neutral economy by 2060, significant challenges were identified. The methodology involved three steps: descriptive analysis of green economy indicators for 2016–2022, correlation analysis to identify significant relationships, and trend forecasting for 2023–2025 using a linear regression model. This approach provided a thorough examination of the green economy's current state and future projections. Over the study period, the number of organizations engaged in environmental innovation and their activity levels have decreased. Investments in environmental protection showed initial growth, but declined in recent years. Conversely, there has been an increase in environmental taxes, reflecting the government’s focus on tax instruments to promote sustainable development. Correlation analysis revealed complex interdependencies, indicating that higher investments and taxes are often associated with lower levels of green innovation activity. Projections for 2023-2025 suggest a further decline in green innovation indicators unless significant policy measures are taken. The study underscores the need for a balanced approach that encourages green innovation while maintaining robust investment and tax bases.

Кадастровая оценка земельных участков сельскохозяйственного назна-чения южных районов Красноярского края

The State cadastral valuation of agricultural lands (GKOZ CX) is a set of legal, administrative and technical measures aimed at establishing the cadastral value of land plots as of a certain date in order to create a tax base and other payments for land. On the territory of the Russian Federation, the cadastral valuation of agricultur-al land is carried out relatively recently. The first evaluation tour was conducted in 2001 - 2002, the second in 2006 – 2007 and the third in 2011 – 2013. Methodological support was provided by unified methodological guidelines approved by federal agencies. This article presents the results of the cadastral value of land plots by type of use, conducted on the territory of three municipalities located in the southern re-gions of the Krasnoyarsk Territory. The specific indicators of cadastral value for these land plots are determined in accordance with the Methodological Guidelines for the state cadastral assessment of agricultural land (approved by Order of the Ministry of Economic Development of the Russian Federation dated 09/20/2010 No. 445) [1].

Tax Challenges Arising from Digitalization: Evaluating the Taxation Models Proposed by the European Commission and the OECD

The world has entered a period of deep transition with rapid and phenomenal development of innovations. The rise of the digital economy has dramatically changed the global business environment, creating new challenges for the tax system. Newspapers and magazines are being replaced by the Internet, and trade in material goods – by digital services. The digital economy eliminates the barriers of time, space and distance. The server where the transaction is processed, the location from which the goods or services are supplied and the place of supply of such goods or services are in different jurisdictions, therefore, the question “Where should the transaction be taxed?” is raised. Meanwhile, the digital economy opens up unprecedented opportunities to avoid taxes with the international tax rules which are still “stuck” in 20th-century business concepts, because the companies operating in the digital space do not need factories, stores or other permanent residences to develop their activities. This article aims to evaluate the efforts of the European Union and international standard-setting entities to find a solution for fair taxation of the digital economy. The first part of the article delves into the concept of the digital economy and its essential features with a special emphasis on the role of the digital service user which is unique and more complex than the role usually played by the customer. This part also analyses the differences between digital and traditional business. The second part of the study emphasizes the reasons that will lead to the necessity of taxation of the digital economy, discusses the digital services tax applied in certain countries of the European Union and highlights the weakness of the concept of digital establishment in double taxation agreements concluded by the countries. The final part explores the proposals submitted by the European Commission regarding the introduction of a common consolidated corporate tax base and the inclusion of the concept of virtual permanent establishment in the tax system in the context of the digital economy taxation model proposed by international organizations.

Polycrisis, Megatrends – Tax Policy Trends and Responses

The EU relies heavily on labor taxation including social security contributions (accounting for more than half of all EU-27 tax revenues), though it can discourage labor market participation. Besides, ageing, digitalization, global markets, new forms of work and increasing labor mobility question the residence-based principle of personal income tax. The sustainability of the social security system can be promoted by additional behavioral tax (linked, for example, to the consumption of unhealthy products or the use of risky services). In the former socialist countries analyzed in this study (Croatia, Bulgaria, Latvia, Estonia, Hungary, Poland and Romania), the share of consumption taxes in total tax revenue is above 38%, well above the EU average. In countries with high consumption tax rates and significant consumption tax revenues, both labor and capital income tax revenues are typically below the EU average. The share of environmental taxes in tax systems is low, both on average in the EU and in the examined countries (although most of them are at or above average). Nonetheless, in the former socialist countries, the share of property taxes is lower than the EU average (for historical reasons, property taxation is less accepted by their societies). According to a Commission study published in 2024 (see: “Growth-Friendly Taxation in a High-Inflation Environment,” European Commission, European Economy Economic Brief 079), strengthening property taxation would help to make the tax system fairer, although not in a time of high inflation and crisis. Harnessing the potential of digitalization contributes to efficient and effective tax administration and can also reduce administrative costs, thus facilitating compliance. Latvia, Hungary and Poland recorded an exceptionally large improvement in VAT compliance, with VAT gaps falling between 2013 and 2021 by over 15 pp, which turned them into the best performers in the EU (Romania still faces challenges in the field of tax avoidance, VAT compliance gap and inefficient tax auditing). Tax administrations in most of the analyzed countries are therefore well adapted to the challenges of digitalization. The future tax system must implement a desirable green tax reform shifting a part of the tax burden away from labor to tax bases linked to environment taxes and other behavioral taxes – regarding the sustainability of the tax system as the European and national budgets face significant financial pressure due to the polycrisis, megatrends and EU loans. In the studied former socialist countries (Croatia, Bulgaria, Latvia, Estonia, Hungary and Romania) the share of consumption taxes in total tax revenue is above 38%, well above the EU average. In countries with high consumption tax rates and significant consumption tax revenues, both labour and capital income tax revenues are typically below the EU average. The share of environmental taxes in tax systems is low, both on average in the EU and in the countries studied (although most of them are at or above average). Though, in the former socialist countries the share of property taxes is lower than the EU average (for historical reasons, property taxation is less accepted by their society). According to a Commission study in 2024, strengthening property taxation would help to make the tax system fairer, although not in a time of high inflation and crisis. Harnessing the potential of digitalisation contributes to efficient and effective tax administration and can also reduce administrative costs, thus facilitating compliance. Latvia, Hungary and Poland recorded an exceptionally large improvement in VAT compliance, with VAT gaps falling between 2013 and 2021 by over 15 pp and currently they belong to the best performers in the EU. Tax administrations in most of the studied countries are therefore well adapted to the challenges of digitalisation. The future tax system must implement a desirable green tax reform shifting a part of the tax burden away from labour on to tax bases linked to environment taxes and other behavioural taxes – regarding the sustainability of tax system as the European and national budgets faces significant financial pressure due to the the policrisis, megatrends and EU loans.

Effect of Public Wages on External Debt in Kenya

Most developing Africa countries have a high need for capital projects that requires a lot of government spending and attention. However, it is unfortunate that in Kenya, borrowed cash intended for capital projects is diverted to recurrent requirements putting a damper on national investment in viable projects. This poses a significant threat to the economy's growth. The following goal served as a guideline for the study; to determine the influence of public wages on external borrowing debt in Kenya using both cointegration and error correction model. Causal research design was adopted to explain the influence of public wages on external borrowing in Kenya. The study period was from 1970 and 2019 from which a 50-year time series data was employed for analysis. The research relied on secondary data which was collected with the aid of a structured data collection checklist from Central Bank of Kenya, and Kenya National Bureau of Statistics, and World Bank websites. Data analysis was done with an aid of stata, E-views and Ox-Metrics statistical software. Stationarity of variables was tested using PP unit root test where public wages was reported to be stationary at level form. The study employed the use of Ordinary Least Square (OLS) technique in the analysis. There was a significant negative association between public wages and external debt whereby a rise in public wage by 100% indicated decrease in external debt by 101.92%. The overall model was found to be significant since the F-statistic value generated in the analysis was 124.664 with a p-value of 0.000 < 0.05. Model was a good predictor of external borrowing, with an adjusted R<sup>2</sup> of 0.946 for public wages explaining foreign debt. This research recommends the study recommends that SRC should free up resources using the austerity measures which include wage reductions for government employees. Secondly, the government through the ministry of treasury should raise tax base to increase revenues. Finally, the results of this study may be valuable to government stakeholders who are charged with the responsibility of ensuring economic development through public sector financing, also it is expected to provide important information to policymakers in order to maintain external debt at manageable levels.

A Proposed Model to Measure the Impairment Value of Fixed Assets with the Need for Tax Recognition

International accounting standards require, in particular the impairment of (36) asset value standard No (31), re- evaluation of assets to display the value of fair value as the replacement value at the end of the period or fiscal year of the disclosure of assets, real value, the represent philosophy of accounting to relevant of different models to call the fair values, especially in case of using methodology - based pricing capital asset model. The researcher presented a model for measuring the impairment of the book value of assets form, which contributes to the measurement of accuracy of the fixed measurement of accounting income and taxable income help guide the preparation of financial statements in the presentation of fixed assets as fast as they converge with the fact that revenue and economic benefits of the asset in the financial period is ending. Because the accounting incases always different on taxable income for the application of the income tax act, although the act, to impose tax in net profit, which present the income statement prepared in accordance with the Egyptian accounting standards, but on grounds of maintaining the public revenues of ministerial decisions were issued contrary to that application and became the standard (31) can’t be applied when determining the tax base. Which led to a loss in its submission for income tax, which is a clear challenge, there is no application of some financial standards, which is what the researcher tried to show. He presented it to determine the tax impact of not applying the standard.

Fighting Inequality Through a Progressive Tax System for a Just Future in Tanzania

The problem of inequality is one of the economic problems that developing countries still face including Tanzania. This research therefore focuses on presenting the status and trends of inequality and the progressive tax system to pay for a just future in Tanzania. Research was anchored on the Ability-to-Pay Principle. The study was typically a desk research whereby it dwelled on analyzing and synthesizing large amounts of complex secondary data/information and literature concerning the issue of inequality in Tanzania. The target population for this study consists of secondary data sources, which included Peer-reviewed journal articles on taxation and inequality Government reports and taxation data from the Tanzania Revenue Authority (TRA). A purposive sampling methodology was employed to choose relevant studies and reports. This approach ascertained that only sources directly related to the research goals were included. The sample consisted of 20 sources, selected based on criteria such as: Year of publication. Content analysis was adopted in analyzing data to discover themes, patterns and trends related to progressive tax systems, income inequality reduction, and wealth distribution. Key variables such as tax policies, inequality measures (Gini coefficient), and wealth distribution patterns were extracted and analyzed to determine the effectiveness of progressive taxation in Tanzania. Findings revealed that while progressive taxes can be a remedy, the presence of large informal sectors, as in Tanzania, hinder their reach. Thus, while Tanzania’s progressive tax structure holds potential, more reforms are in need to boost implementation alongside widening the tax base. Further, the study concluded that there is little wealth-related taxation in Tanzania. Also, assets such as land ownership or financial assets are hardly/not taxed. The study recommended that given the situation, there is a great need to improve the tax collection with a focus on the existing tax base in Tanzania.

Profit Tax as a Character of Regional Budget of Our Time

The authors develop approaches to tax decentralization based on the theory of imperfect institutions by T. Eggertsson, in terms of the critically important profit tax for regional budgets of Russia. We see the goal of our research in finding a balance between the action of formal rules and informal, social norms, technologies, and models for distributing the profits of the largest Russian companies as a tax base between the federal center of Russia and the regions depending on the actual location of employees and assets. The article is devoted to the action of a successful and unique formal rule of the tax institution for the Russian Federation – the formation of consolidated groups of taxpayers (CGT). The novelty of the article lies in the study of the phenomenon of transformation of the domestic system of paying profit tax in 2023 as a replacement of one formal rule (action of CGTs) with another formal rule – the introduction of a new excess profit tax for Russia. An empirical study of the regional distribution of payments of legal entities-payers of profit tax according to the formal rules of the CGTs from among the largest Russian companies registered outside Moscow was conducted. Based on the results of the study, a general conclusion was made about the acute contradiction of the current economic policy in Russia in the content of the tax institution: between the new informal social norm on territorial decentralization of the largest Russian companies and the opposite formal rules of tax centralization in terms of profit tax. In this regard, the current policy of coincidence of territorial and tax decentralization in terms of state-owned companies in China deserves attention.

The labor market effects of facilitating social security contributions under part-time employment contracts: Evidence from Colombia

We examine the impact of homogenizing the tax base between part-time and full-time labor contracts in a context with high informality. Using employer–employee matched administrative records and household survey data, we estimate the effects of a reform that eliminated a wedge in regulatory costs across different work schedules in Colombia, reducing the relative costs of formal part-time employment. We find that the reform increased the probability of entering the formal sector for previously informal part-time workers (the target population). Using pre-reform variation in firms’ demand for workers eligible for the policy, we find a 5.5 % increase in formal employment at firms more exposed to the policy. Mean wages at these firms rose by 0.88 % after the reform relative to those at firms that tend to hire fewer workers with no formal sector experience. Firms with more exposure to the reform also experienced higher churn, consistent with the policy creating incentives for firms to rotate across workers at a faster pace.