Tax Burden Research Articles

Does Capital Intensity Moderate The Effect Of Financial Distress And Operational Performance Tax Avoidance In Regional-Owned Enterprises In Water Supply?

Tax avoidance is a legal practice by companies as an effort to reduce the tax burden distributed to the state. This is commonly done by companies, both private and government-owned. Regional-Owned Enterprises in Water Supply as a company owned by the Regional Government has a dual role, namely providing public goods and generating profits. This research aims to analyze the influence of financial difficulties, service effectiveness, and operational efficiency on tax avoidance with capital intensity as a moderating variable in Regional-Owned Enterprises in Water Supply. This research uses quantitative methods with secondary data obtained using documentation data collection methods. The sample in this study was selected based on purposive sampling and resulted in 117 companies spanning the period 2019-2022. The data analysis technique in this research uses multiple linear regression analysis using the Eviews version 12 program with a significance level of 5%. The results of this study show that financial difficulties and service effectiveness have a significant negative effect on tax avoidance, but operational efficiency has an insignificant positive effect on tax avoidance. The aggressiveness of Regional-Owned Enterprises in Water Supply towards tax avoidance is not as high as other organizations that are completely profit-oriented. This is possible because human resources do not understand taxation. In addition, direct supervision by the Regional Government makes management more alert to violations of statutory regulations. Capital intensity can weaken the influence of financial difficulties on tax avoidance and strengthen the influence of operational efficiency on tax avoidance. The greater the number of company fixed assets, the greater the depreciation expense, management can choose the depreciation method that is most profitable for the company.

Does tax enforcement reduce corporate environmental investment? evidence from a quasi-natural experiment

The transition to a green, sustainable economy is largely reliant on corporate investment in the realm of environmental protection. Utilizing the adoption of the third phase of the Golden Tax Project (GTPIII) in China as a quasi-natural experiment, this paper examines how corporate environmental investment changes in response to greater tax enforcement. Our results reveal that tougher tax enforcement significantly lowers corporate environmental investment. Such an effect is stronger for firms faced by high financial constraints and those operating in non-heavy-polluting industries. Moreover, the mechanism analysis indicates that the higher tax burden induced by greater tax enforcement is the potential channel. Overall, this paper shows that stricter tax enforcement could potentially result in adverse spillover effects on corporate environmental investment, which warrants attention in tax collection practices.

On taxation of small business in the context of integration of new regions

The subject of the study is the mechanism of tax support for small businesses from the perspective of successful adaptation of taxpayers of southwestern subjects to the tax conditions of the Russian Federation. The paper examines the peculiarities of taxation of small businesses in the Donetsk and Lugansk People's Republics, Zaporizhia and Kherson regions, identifies some specific features of the development of small business in regions with high-risk conditions of activity. The hypothesis is formulated that changes in tax legislation regarding the simplified taxation system, which come into force on 1.01.2025, may be extremely negative for the absolute majority of taxpayers in the analyzed regions. The author focuses on the need to introduce temporary norms aimed at maintaining the level of tax burden of small businesses, even in conditions of low budget provision of new subjects of the Russian Federation, along with traditional methods of scientific analysis, such methods as a retrospective analysis of the development of small businesses; analysis of forms of statistical tax reporting of the Federal Tax Service of Russia; elements of the modeling method – for forecasting the performance indicators of taxpayers and the tax burden in the event of changes in tax legislation In the course of the study, the following tasks were solved and the relevant conclusions were formulated: - the dynamics of the number of small businesses in the southwestern regions of the Russian Federation is analyzed; it is determined that the growth rate of the number of taxpayers significantly exceeds the national average, while almost 80% of taxpayers belong to micro-businesses; - the specifics of taxation of small businesses in new territories and its impact on the level of tax burden are studied taxpayers. It has been revealed that the tax burden of SMEs in the new subjects of the Russian Federation is significantly lower than in regions with a comparable level of "subsidization" due to the introduction of reduced regional tax rates and a reduced tariff of insurance premiums; - assumptions are formulated that the new norms of the Tax Code of the Russian Federation regarding taxpayers of the USN may be the reason for a significant increase in the tax burden of small businesses; - separate recommendations have been formulated on the introduction of temporary tax measures that ensure the preservation of the tax burden and promote integration processes

A comprehensive analysis of key factors’ impact on environmental performance: Evidence from Globe by novel super learner algorithm

This study aims to analyze comprehensively the impact of different economic and demographic factors, which affect economic development, on environmental performance. In this context, the study considers the Environmental Performance Index as the response variable, uses GDP per capita, tariff rate, tax burden, government expenditure, inflation, unemployment, population, income tax rate, public debt, FDI inflow, and corporate tax rate as the explanatory variables, examines 181 countries, performs a novel Super Learner (SL) algorithm, which includes a total of six machine learning (ML) algorithms, and uses data for the years 2018, 2020, and 2022. The results demonstrate that (i) the SL algorithm has a superior capacity with regard to other ML algorithms; (ii) gross domestic product per capita is the most crucial factor in the environmental performance followed by tariff rates, tax burden, government expenditure, and inflation, in order; (iii) among all, the corporate tax rate has the lowest importance on the environmental performance followed by also foreign direct investment, public debt, income tax rate, population, and unemployment; (iv) there are some critical thresholds, which imply that the impact of the factors on the environmental performance change according to these barriers. Overall, the study reveals the nonlinear impact of the variables on environmental performance as well as their relative importance and critical threshold. Thus, the study provides policymakers valuable insights in re-formulating their environmental policies to increase environmental performance. Accordingly, various policy options are discussed.

Investigating the temporal and spatial evolution of bank performance and its impact pathways in the context of financial technology development

Financial technology transforms humans and businesses as globalization and the digital economy accelerate. This affects bank performance. Thus, studying whether financial technology affects bank performance is crucial to enhancing living standards and business development. This article examines the development and interaction between financial technology and bank performance from 2012 to 2021 using standard deviation ellipses, kernel density estimation, Moran's index, and spatial econometric models. The research found that (1) financial technology development improves regional bank performance. In contrast, control variables like economic development, urbanization, tax burden, capital adequacy ratio, net interest margin, and loan-to-deposit ratio also affect bank performance. (2) From 2012 to 2021, Chinese bank performance initially grew, then declined, while financial technology declined slowly and improved rapidly. Financial technology and bank performance development were highest in the eastern coastal regions and lowest in the northwest and northeast. (3) China's financial technology and bank performance had high-high or low-low spatial agglomeration. (4) Financial technology and control variables have a spatial spillover effect on bank performance, so their development in one region can affect neighboring regions. This article provides recommendations for governments and banks based on these findings.

A Simple Model of Corporate Tax Incidence

We analyze the incidence of a linear corporate tax using a simple and portable competitive general equilibrium model in which capital owners choose to invest either in domestic production or a foreign investment opportunity and workers make extensive margin labor supply decisions. Our analysis explores the effect of corporate taxation on wages, employment, domestic profits, and domestic investment. Analytical results and numerical simulations generate insights in line with recent empirical evidence on corporate tax incidence: the burden of the corporate tax is shared between workers and firms, with larger responses among more capital-intensive firms.

Local State Capacity and Uneven Taxation across Industrial Firms

AbstractIn this research we investigate the association between local state capacity (LSC) and effective tax burdens (ETBs) on industrial firms within counties between 1998 and 2013. The LSC measures a state's capacity for policy implementation and specifically its ability to acquire low‐cost agricultural land for nonagricultural (industrial or commercial) purposes. Based on China's government‐led development experience since the 1990s, we draw on two unique household survey datasets to capture LSC at county level. We find robust evidence that greater LSC was associated with much lower ETBs on large industrial firms. This taxation pattern implies local government's primary reliance on larger manufacturing firms, while the ETBs for small‐and‐medium enterprises are not as prominently addressed. This research highlights that LSC can affect both the amount of revenue a local government can generate and the methods it uses to collect these revenues.

The Boundary between Public and Civil Laws in Tax Burden Litigation: Sample Analysis of Y v. Q Company

The Boundary between Public and Civil Laws in Tax Burden Litigation: Sample Analysis of Y v. Q Company

A Review of the Role of ESG Performance of Listed Companies on Financial Performance: Theory, Effect, Influencing Factors and Path

With the ongoing evolution of sustainability concepts, ESG has increasingly captured the spotlight in academic discourse. Therefore use citespace software to analyze previous trending in ESG, and sort out their relation by literature review. Results: (1) Scholars mainly use stakeholder theory, resource dependence theory, signal theory, agency theory, shareholder supremacy theory and cost-benefit theory when researching the relationship between the ESG performance and financial performance; (2) Currently, scholars have three perspectives regarding the impact of ESG performance on financial performance: positive relationship, inverse relationship and nonlinear relationship; (3) The ESG performance's influencing factors on financial performance are primarily reflected like the enterprise, geographical location; (4) When enterprises fulfil their ESG-related responsibilities, they mainly affect their financial performance through four paths: reducing information asymmetry, improving corporate innovation ability, increasing media attention and reducing the tax burden.

Effective Tax Rates: Firm Size, Leverage and Return on Assets

The Effective Tax Rate (ETR) assesses a company's proficiency in managing its tax burden by comparing tax expenses to total net income. A lower ETR percentage indicates better tax effectiveness. Companies utilize the ETR as a benchmark for shaping their tax policies. It serves as a tool for gauging how well a company handles its tax system. This study seeks empirical evidence on the impact of firm size, leverage, and return on assets on effective tax rates. The independent variables include firm size, debt level, and return on assets, while the dependent variable is the effective tax rate. The research focuses on food and beverages sector companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2022. The sample comprises 34 companies selected through purposive sampling. The analysis employs multiple linear regression, revealing that firm size and return on assets do not influence effective tax rates, whereas leverage significantly affects the effective tax rate

Modeling Job Creation to Aid the Attainment of SDGs: Firm Level Evidence from Nigeria

Employment is one of the most important social and economic issues in every country across the globe. Job creation however requires the combined effort of both government and private sector particularly considering that the private sector is recognized to have the leverage to provide jobs so long as a conducive investment environment is provided by the government. This study models the determinants of employment in the private sector to ascertain their ability to willingly contribute their quota towards the realization of SDGs 3, 8, and 10 through job creation and in the spirit of owners’ resources, firms’ specific characteristics, returns to owners, and tax and social cost burden. The study augmented the profit maximization framework of firms as contained in Jehle and Reny (2011) and applied a generalized least square technique on a panel data set of 13 banks quoted on the Nigerian Stock Exchange, over 17 years period. The study confirms that the level of employment is largely determined by resources available to firms, firm-specific characteristics as well as the level of profitability. The results also indicate that tax serves as a disincentive to job creation. Consequently, to encourage firms to create more jobs to aid the realization of SDGs in Nigeria, the study recommends amongst others, the establishment of the Private Sector Equity Development Fund (PSEDF), the entrenchment of a conducive environment to enhance the inflow of foreign direct investment, as well as tax incentives and other policies that enhance the long-term survival of firms in Nigeria.

FAKTOR - FAKTOR YANG MEMPENGARUHI PENGHINDARAN PAJAK

Taxes are state income whose value is very large to be used for the interests of the government and the welfare of society. Tax evasion is a legal act within the scope of taxation by exploiting regulatory loopholes and not violating tax provisions. A common phenomenon is reducing the tax burden that must be paid through various legitimate tax avoidance strategies. Researchers aim to determine the influence of corporate governance, profitability and capital intensity on tax avoidance in manufacturing companies listed on the IDX in the 2019-2022 time period. This research is quantitative. This research uses four independent variables, namely Corporate Governance, including Institutional Ownership, Audit Committee, Profitability and Capital Intensity. The dependent variable is Tax Avoidance. Secondary data consists of figures taken from the financial reports of food and beverage manufacturing companies listed on the Indonesia Stock Exchange (BEI). The results of this research have no effect on tax avoidance. The audit committee has no effect on tax avoidance. Profitability has a negative effect on tax avoidance. Capital intensity has a negative effect on tax avoidance. Institutional ownership, audit committee, ROA, and Capital Intensity partly have a negative effect on Tax Avoidance.

The Role of Taxes In Developing the Industrial Sector in Iraq for the Period (2015-2021)

The Iraqi economy contends with structural production imbalances attributable to challenges afflicting the industrial sector, thereby engendering a monolithic economic landscape bereft of diversification to address these concerns and realize developmental imperatives, it becomes imperative to formulate strategies and policies conducive to stimulating, supporting, and safeguarding the industrial sector. Thereby ameliorating the economic landscape and rectifying distortions in the production structure within this framework, taxes emerge as a pivotal instrumentality for fostering industrial sector growth, employing the tax burden index and the industrial sector's contribution ratio to the gross domestic product, the researcher endeavors to elucidate the nuanced relationship between taxes and industrial sector growth in Iraq. The study's primary objective is to comprehensively analyse the tax contribution ratio and the industrial sector in Iraq, discerning the intricate interplay between taxes and industrial growth to enhance its contribution to the gross domestic product and facilitate economic diversification. The findings underscore a nuanced equilibrium, spotlighting the instrumental role of taxes in directly or indirectly catalyzing industrial sector growth through a repertoire of strategic tools, including tax incentive policies and the exemption of imported capital goods, such as machinery, equipment, and apparatus, from customs duties. This strategic approach aims to buttress producers by alleviating the fiscal burden, reducing operational costs, augmenting profitability, fostering the adoption of cutting-edge technology, and refining methodologies intrinsic to the production process. Paper: A research paper derived from a dissertation

Investors’ Reaction: Exploring Supervisory Function and Corporate Tax Policy

Purpose: This study aims to analyze investor reactions to the supervisory function carried out by independent commissioners and audit committees, especially in supervising corporate tax policies taken by management. Theoretical framework: Corporate tax policy has the risk of tax penalties in the future and risks reducing investment returns in the future, so the role of independent commissioners and audit committees should be able to supervising management so that the tax policies taken do not harm investors. Method: 565 panel data from manufacturing companies on the Indonesia Stock Exchange 2015-2022 were analyzed with a quantitative approach and multiple linear methods using STATA. Result: This study found that independent commissioners encourage management in tax burden minimization policies, while the audit committee is not optimal in carrying out its supervisory function over corporate tax management policies. In addition, investors react to the audit committee because it is considered capable of carrying out the supervisory function of management, while investors do not react to independent commissioners and corporate tax policies. Research, Practical & Social implications: The results of this study encourage entities to increase the role of independent commissioners in carrying out supervisory functions such as the audit committee in order to get a positive response from investors which can increase company value for sustainability business. Originality/value: In this study, corporate tax policy is measured by reducing the statutory tax rate with a tax compliance ratio that is rarely used in previous studies, resulting in how much corporate tax policy minimizes the tax expense.

Can Foreign Ownership and Leverage Affect Tax Avoidance

A company in carrying out tax avoidance actions is influenced by management decisions and company ownership structure. Companies with a higher level of foreign ownership, then the determination of company policies from foreign parties tends to lead to minimizing the tax burden. Similarly, the leverage owned by the company if it owes too much to foreign companies, it does not rule out the possibility that it will affect the decision of the management to take tax avoidance actions. The purpose of this study is to examine the effect of foreign ownership and leverage on tax avoidance. Quantitative research method, with secondary data obtained from IDX in 2018-2022. The sample used was 35 data. Data analysis using multiple linear regression is assisted by SPSS data processing tools. The results showed the influence of foreign ownership on tax avoidance. While leverage has no effect on tax avoidance. However, simultaneously foreign ownership and leverage affect tax avoidance. The conclusion of this study is that if Telecommunication Companies have the potential to do tax avoidance, it is very detrimental to the country. In the digital era, almost all activities really need the internet. So that Telecommunication Companies have the potential to have large profits, if the company's profits are greater, the hope is that the taxes paid will also be greater so that tax revenues increase, and the state is able to finance nation building.

Regional features of the tax burden of IT companies in the context of increasing their sustainability

This article characterizes the dynamics of the tax burden of Russian IT-companies as a key factor in their economic sustainability. This study aims to determine regional characteristics of the level of tax burden in the field of information techno­logy in order to identify best practices with the possibility of further replication of successful experience. To achieve this goal, an analysis is carried out of changes in the tax burden in the post-COVID period compared to 2019. Particular attention is paid to the dynamics of the tax burden depending on the scale of enterprises. The results show that the trend of reducing the tax burden in the post-COVID period is not stable for all Russian regions. The low level of tax burden is associated not so much with the industry of activity (in particular, with the field of information technology), but with regional characteristics (the creation of tax preferences in certain territories). Currently, state support for business through tax methods is aimed more at supporting certain regions and not the sphere of IT. The most typical scale of enterprises in the information technology sector, demonstrating a minimal tax burden, assumes revenue from 30 to 120 mln rubles a year. Such scaling of business in this area allows not only to use tax preferences established by the current Russian tax legislation, but also to find resources for organizing effective tax planning.

Інституційне середовище банківської підтримки розвитку малого підприємництва в україні

The article is devoted to the study of the evolution of the formation of the institutional environment for the functioning of small businesses in Ukraine and the development of proposals for its improvement to stimulate bank support in the field of small business. The regulatory and legal basis for developing small entrepreneurship has been staged. A portrait profile of a small business entity in Ukraine has been created. A scheme of interaction of state institutions supporting small entrepreneurship by supplementing its infrastructural block with new institutional units has been developed. Within the framework of the existing infrastructure, it is proposed to create a Bureau of credit histories of small business entities and a Unified platform for financing small business development. The priority directions for optimizing regulatory and legal support for small businesses are substantiated. The following are defined as control points for the regulation of small entrepreneurship: approximation of business management and regulation standards to EU standards; development of financial instruments alternative to lending; digitization of financial services, etc. It is essential to direct regulatory efforts in regulating alternative banks’ activities to support financial market intermediaries (fintechs, microfinance organizations, leasing and factoring companies) and diversify funding sources (factoring, crowdfunding). Stimulating the development of microcredit in Ukraine requires a comprehensive approach, the components of which can be simplifying the mechanism of obtaining microcredit, creating conditions for the development of non-bank financial institutions, improving the legislative provision of bank microcredit, state incentives for banks to expand micro- and other types of lending; creation of cooperative banks specialized in lending to small businesses; state support for microcredit information programs; reduction of the tax burden and improvement of investment and credit support mechanisms for small businesses; expansion of the list of state preferential lending programs for small enterprises; gradual increase in the volume of microcredit to support start-ups; expanding the use of digital financial technologies. Keywords: small business, institutional environment, banking support, regulatory and legal support.

Where the money is: branch network structure and bank profitability in Switzerland

This paper investigates the impact of the geographic concentration of branch networks on bank profitability in Switzerland. Leveraging Switzerland's distinctive federalist fiscal structure, where communes set their own income tax rates, we also explore whether the tax burden of branch locations moderates this relationship. Using a hand-collected dataset of branch networks of commercial banks, we find that geographic branch network concentration positively affects bank profitability but only when banks concentrate their branches in low-tax communes. This suggests that the proximity to wealthy clients, who are more likely to reside in low-tax areas, enhances bank profitability.

Breaking the Double Tax Paradigm

The success story of economic globalization is often linked to an increased freedom of capital movement, facilitated by the existence of more than 3,000 bilateral tax treaties, the primary purpose of which is to prevent double taxation. Even the most outspoken critics of the international tax regime subscribe to the notion that double taxation is detrimental to global growth, development and welfare. Yet, they argue that, all things considered, tax treaties might not be worth signing. Based on an extensive review of the available tax policy and economics literature, this article shows that there is not enough of a normative or empirical basis for thinking that double taxation will necessarily restrict capital flows, provided that the combined effective tax burden is kept at a reasonable level. At the same time, treaties seem to provide investors with a legal certainty that is key to cross-border business activity. This article posits that there should be more emphasis on the legal certainty aspect of tax treaties and less on their limited capacity to prevent double taxation. In fact, relaxing the double tax paradigm could help to significantly improve tax treaties, with a view to preserving their role in fostering international commerce and investment. In this respect, the authors propose a simplified tax treaty model that, by allowing an agreed overlap between home-state and host-state taxes, would diminish overall implementation costs while increasing legal certainty and reducing the risk of lengthy tax disputes, thus benefiting both taxpayers and tax administrations. The article further demonstrates that this approach is superior to the current Pillar One proposal and other popular systemic reform suggestions in the literature, specifically the destination-based cashflow tax (DBCFT) and global formulary apportionment.

“Hidden price”: Energy conservation and emission reduction targets and employment growth

To achieve the “Carbon Peak” and “Carbon Neutrality” goals, the Chinese government is continuously strengthening energy conservation and emission reduction (ECER) work. However, this measure may also have an impact on employment in enterprises. To clarify its impact characteristics, we manually collect and organize prefecture-level municipal government work reports, and characterize ECER targets based on whether the government's planning terms involve ECER. This paper combines the China Industrial Enterprise Database and China Listed Company Database to empirically test the impact of ECER targets on employment growth in enterprises. We find that ECER targets inhibit employment growth in enterprises, and this effect is still significant after considering the endogeneity problems. The results of the mechanism analysis show that at the macro level, ECER targets can inhibit employment growth by exacerbating resource mismatch and weakening market competition. At the micro level, ECER targets can increase the enterprise's fixed assets investment and tax burden, and reduce the enterprise's wage, which has a negative impact on employment growth. In addition, we also find that the inhibitory effect of ECER targets on employment growth is more significant in foreign-capital enterprises, private enterprises, and enterprises in the eastern region.