Tax Concessions Research Articles

Legal and administrative elements of the construction of tax exemptions and allowances in the context of granting public support

Among the forms of public assistance of a passive nature are tax concessions and exemptions. A given form of aid can be of liquidity support, rescue and restructuring and pro-development nature for the enterprise. This form of assistance is reflected in the reduction of revenues to the state and local government budgets. Tax credits, used as investment incentives for entrepreneurs, can affect the growth of production, and in the case of new investments, the creation of new jobs or the retention of existing ones. The article presents the provisions of the tax law on real estate tax in correlation with the law on state aid, in the context of an assessment of - to what extent on the grounds of real estate tax it is possible to operate reliefs and exemptions that constitute state aid for entrepreneurs. The legal problems of providing state aid and the issues of tax procedures in the field of tax reliefs and exemptions and the calculation of the net value of state aid are presented.

Arc of avoidance: An analytical framework for analysing mining companies’ actions in the global South

Given the relationship between mineral extraction and conflict, human rights violations, and environmental degradation, there is an urgent need to examine how to mitigate harm in a more mineral intensive future. Thus far the literature has focused on two areas, the governance gaps present in the global governance of multinationals and the private governance scholarship which examines the rule-making power of mining firms. This paper argues that this story of mining firms' power is incomplete. Mining MNCs not only make rules, they also actively avoid regulations put in place to temper their impact on communities. To address this, the paper develops a chronological ‘arc of avoidance’, detailing the methods by which mining firms evade their fiscal and legal obligations to host communities. These methods include negotiation of tax concessions, tax avoidance, closing avenues of redress, and abandonment of mines without recourse. Using the case study of Paladin Energy, the paper confirms the power of large MNCs over governments and citizens of the Global South. It demonstrates that mining MNCs engage in avoidance tactics throughout the life of a mine, and that their power over host states does not weaken once investment has been made. Such tactics lead to entrenched negative outcomes for mining communities in the Global South. The findings reveal the full extent to which firms accrue the benefits and avoid the consequences of mineral extraction throughout the production process, and are of particular significance as we shift to extracting the resources required for the uptake of renewable energy.

Board attributes and sustainability reporting of selected listed nonfinancial firms in anglophone Sub-Saharan African countries: A multinomial logistic regression

Resource depletion, social inequality, and climate change are key among the global issues affecting the modern corporate world. Corporate sustainability is a major agenda at corporate boards. Stakeholders are increasingly demanding corporate responsibility in the wake of global resource depletion. Sustainability reporting has been experienced differently in different regions, with emerging economies being adversely stuck. Combating the bearing effects has been difficult due to a lack of synergy among the nations as well as a lack of harmonized corporate disclosure. Understanding the global socioeconomic and environmental concerns requires a close examination of the major determinants of sustainability reporting. Grounded on the agency, stakeholders, and legitimacy theory, this study aims to evaluate the influence of board attributes on sustainability reporting. Using a multinomial logistic regression model, the study assessed 110 nonfinancial firms listed in 10 Sub-Saharan African (SSA) countries from 2016 to 2021. The study analyzed the influence of board attributes on sustainability reporting. The result indicates that board size, board meetings, board independence, and board gender diversity have a positive influence on sustainability reporting. The finding provides policy implications and insight into the need for more representative boards with increased gender diversity and independence. Additionally, an optimal frequency of board meetings is needed to strengthen oversight, efficacy, and transparency of sustainability reporting initiatives in SSA. Larger representative board sizes could be rewarded with tax concessions.

Australian first home ownership assistance schemes: International comparison and assessment

AbstractAustralia, like most developed countries, has promoted homeownership as an express housing policy goal for many decades. Domestically and internationally, recent years have seen growing efforts to enhance access to owner‐occupation for prospective first home buyers (FHBs). FHB assistance takes many forms. Presenting a new typology of such measures, our multi‐method study investigates current approaches in Australia and in seven high‐income comparator countries. Australia stands out for its modern emphasis on demand‐side assistance (e.g., grants and tax concessions), rather than supply‐side measures (e.g., government‐developed housing for low‐cost sale). Lately, several Australian governments (federal and state) have diversified approaches to FHB assistance, particularly via shared equity and low‐deposit mortgage schemes, taking cues from international practice. While more administratively demanding, these types of assistance are considered attractive because they require little outlay or operate on a ‘revolving fund’ basis, with government potentially sharing capital gains. However, they potentially place governments even more among housing's ‘insiders’, with a material interest in continually rising prices.

Contribution of Tax Induced Foreign Direct Investment for Sustainable Development in Bangladesh

Tax incentives play a crucial role in promoting and facilitating foreign direct investment (FDI), thereby contributing to a country's overall economic development. However, Bangladesh experienced a decline in FDI-based foreign income in the first two quarters of 2018, partially attributed to a lag in FDI from the USA. Given Bangladesh's historical challenges with deficit financing post-independence, increasing self-revenue income and leveraging tax-induced FDI are imperative for achieving sustainable development goals. To develop tax incentive-based hypotheses, four investment climate factors are considered: i) Corporate Tax Rate (CTR), ii) Tax Holiday (TaxH), and iii) Tax Concession (TaxC). This research adopts an analytical and descriptive approach, employing a mixed-method research methodology to analyze data sourced from both primary and secondary sources. Data collection methods include semi-structured interviews and documentary analysis, focusing on regulatory bodies like NBR, BIDA, and BOI for tax incentive analysis, and relevant organizations such as BB, World Bank, UNCTAD, BIDS, FIAS, BEZA, and BEPZA for FDI-related documents. The impact of tax incentives on FDI inflows in Bangladesh from 2001 to 2020 is analyzed using a simple regression model. The independent variables include corporate tax rate, tax holiday, and tax concession, while controlled variables such as gross domestic product (GDP) and corruption are also considered, as they may influence FDI inflows. Statistical analysis reveals a negative influence of corporate tax rate on FDI inflows, while the tax holiday variable exhibits a positive and statistically significant relationship with FDI inflows. Furthermore, alongside the contribution of FDI, this study also examines sustainable development trends from 2016 to 2020, providing numerical insights into its attainment. Overall, this research sheds light on the importance of tax incentives in attracting FDI and its implications for sustainable development in Bangladesh.

Exploring the synergistic development strategy of vocational education and regional economy based on the separating equilibrium game model

Abstract To promote the synergistic development of vocational education and regional economy, this paper proposes to use the separated equilibrium game model to study vocational education and regional economy. Starting from the theoretical foundation of the components of game theory, the separated equilibrium game model oriented to the synergistic development of vocational education and regional economy is constructed by combining the game tree and the separated equilibrium game. According to the calculation formula for evolutionary stabilization strategies and equilibrium analysis, the case analysis of vocational education and regional economies is conducted. The results show that when W2 is taken as 2, 3, or 4, the system evolves towards antagonistic cooperation, but evolution is becoming increasingly slow. When W2=6, the two sides of the school and enterprise choose the strategy tends to (positive cooperation, positive cooperation), which indicates that in the school-enterprise cooperation, the government departments through tax concessions, capital subsidies and other incentives to improve the enthusiasm of enterprises is an effective method. This study analyzes the dispute of interests of school-enterprise cooperation in vocational education development from the game perspective. It provides the basis for the construction of regional economic synergistic development strategy.

Special Challenges and Opportunities in the (Equity) Financing of Protech Start-Ups

This paper analyzes the difficulties that PropTech start-ups face in raising capital by utilizing equity financing as a source of finance. PropTech is an intrinsic marriage of technology and real estate in a single platform, making this platform very demanding and hugely capital-intensive for procurement, adaptation to new ideas, and intensification. Current research fails to provide in-depth information on the financial circumstances of the PropTech startups, presenting a gap for research. Several startups have succeeded in striking a balance by exploring opportunities in smart partnerships and using advanced technology to accelerate processes and investor networks. Government grants and tax concessions are useful tools that can be used to lighten the financial stress and the promoting of innovations. Looking at digital trends, investments like Airbnb, WeWork, and Compass companies can guide to efficiently adapt to challenges and conserve leadership in the global markets. While equity financing presents significant opportunities and challenges for PropTech start-ups, those that effectively leverage these strategies can achieve sustainable growth and success in a competitive market. Through the implementation of the literature review, case studies, and expert opinion techniques, this research closely explores the topic of equity financing for PropTech companies. The findings suggest introducing investors into strategic partnerships they need, promoting credibility among stakeholders, providing a means of raising funds, and ease of exit strategies. Still, on the contrary, it also brings to light the challenges of ownership dilution risk, complex valuations, and high investor expectations.

The Efficiency and Firm Performance Analysis of Nigeria Manufacturing Firms: Application of Stochastic Frontier Analysis Technique

ABSTRACT: Despite several measures adopted by the government to improve the efficiency of the manufacturing firms in Nigeria, the performance of these firms is below expectation. The poor performance of Nigerian manufacturing firms has prompted concern for Nigeria’s economic prospects in the long run. This needs to be addressed because, under this scenario, most development objectives would be difficult to achieve. Therefore, there is a need for Nigerian manufacturing firms to achieve high productivity to improve their performance. This study, therefore, evaluated the level of technical efficiency and examined the determinants of technical inefficiency in Nigerian manufacturing firms. It employed panel data of fifty-five manufacturing firms quoted in the Nigeria Stock Exchange Market from 1999 to 2020. The result from the Stochastic Frontier Analysis technique showed that all inputs (capital, labor, raw materials, cost of energy and other expenses) impacted positively on firms’ output at a 1% significance level. But the impact of raw material is the highest. It was also found that the mean efficiency for Nigerian manufacturing firms is 52.74%. Finally, it was revealed that the age of the firm, total assets and management efficiency are the technical inefficiency determinants in Nigerian manufacturing firms. This implies that the efficiency level of manufacturing firms in Nigeria can be improved by 47.26%. Also, manufacturing output can be enhanced by providing adequate raw materials. Furthermore, the efficiency of manufacturing firms in Nigeria is enabled by the managerial capability and asset size of the firms. The study suggested that government should give tax concessions on the purchase of raw materials (sourced domestically and externally) to encourage availability and use to optimize production. Also, manufacturing firms should encourage skill acquisition programs through various on-the-job training programs for managers and their entire workforce to boost labor productivity and performance. In addition, policies that will encourage good education system should be adopted by the government which will help the nation to produce trained and skilled labor force. Finally, manufacturing firms should mobilize more resources for the procurement, consolidation and expansion of the size of their assets using their undistributed corporate profit. Through its regulatory bodies [such as Federal Ministry of Industries, Trade and Investment, Nigeria Chamber of Commerce and Industry and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN)], government should enforce minimal asset requirements for each sub-sector (industry) as a basis for takeoff and subsequent renewal of licence for the manufacturing firms in Nigeria.

Barriers to Implementation of Environmental Management Accounting in South African Small and Medium Enterprises for Sustainable Performance

The key aim of the study is to establish barriers to environmental management accounting (EMA) adoption by manufacturing small and medium enterprises (EMA) in Gauteng province, South Africa from an institutional theory standpoint. To attain the aim of the study 34 in-depth interviews were undertaken with manufacturing SME owners and managers on 34 SMEs. Thematic analysis was adopted to analyze interview transcripts and revealed that lack of government support, financial barriers, lack of incentives to adopt EMA, and absence of guidance to adopt EMA are acting as barriers of SMEs in South Africa from adopting EMA. As a result, the study proposes various incentives such as tax concessions and discounts on eco-materials to encourage SME EMA adoption. Also, the government should take center-stage in making available green training and amplifying awareness of environmental management within SMEs in South Africa. Overall, the study would help regulators and policymakers to align regulations and green strategies with factors that hinder EMA adoption in a ploy to overcome them.

Exploring the method of calculating the amount of overlapping enjoyment of enterprise income tax benefits

Abstract The adjustment of enterprises’ stacked enjoyment of preferences in the revision of the 2021 corporate income tax return is a highlight. This paper takes the cost of capital use model as the basis to study the maximization of the net value of capital obtained by adopting the same optimal capital accumulation, and the utility mechanism of the reduced tax rate preferences and the halved levy preferences are studied, respectively. Finally, with high-tech enterprises as the main object of empirical research, we studied the effect mechanism of superimposed enjoyment of enterprise income tax concessions on R&D and analyzed the calculation process of the amount of superimposed enjoyment of income tax concessions. The results show that to tax-adjusted income of 60 million yuan to calculated through the original method of filing method to enjoy 1 million yuan of preferences, while the use of superimposed enjoyment of tax breaks and preferences amounted to 1,335,200 yuan. In this paper, the calculation of tax benefits enjoyed by using stacking is more accurate to reflect policy requirements and maintain the tax interests of high-tech and other enterprises.

INVESTMENT HOUSING TAX CONCESSIONS AND WELFARE: A QUANTITATIVE STUDY FOR AUSTRALIA

AbstractThis article builds a general equilibrium overlapping generations (OLG) model with heterogeneous agents to study the welfare implications of investment housing tax concessions in Australia. Removing these concessions substantially reduces the landlord rate and the use of debt. There is a steady‐state welfare gain equivalent to a 0.13% increase in lifetime consumption if the additional tax revenue from removing the concessions is used to finance a lump‐sum transfer to all households. That welfare gain rises to 1.45% if the extra tax revenue is used to provide a transfer to the housing‐poor in the form of rental assistance. Over the transition, around 70% of existing households experience a welfare gain and there are important distributional effects in both cases.

Revisiting fuel tax concessions (FTCs): The economic implications of fuel subsidies for the commercial fishing fleet of the United Kingdom

Fuel forms a significant portion of the total expenditure for many commercial fishing vessels and in some cases, profitability can be dictated by fuel costs. In many nations, including the UK, these fuel costs are reduced by cost-reducing subsidies. There is evidence of growing support from various channels that public opinion is moving towards a reassessment of fuel subsidies. Analysis of the economics of the UK fishing fleet, using publicly available industry-supplied data, implies that the nominal annual value of fuel tax concessions for diesel is between £ 150–180 million per year (2009–2019). That support is largely provided to the most fuel-intensive fishing methods, such as mobile demersal trawls and dredges. Results show that, without the current fuel tax concession, several fleet segments would be deemed unprofitable. This paper outlines the current value of fuel tax concessions for fishing vessels and potential policy considerations for reform.

Summaries of Articles

Summaries of Articles

Australian initial public offerings and US venture capital: different structures for similar early-stage funding?

PurposeAustralian Securities Exchange (ASX) initial public offerings (IPOs) are an important source of early-stage capital and have also driven a substantial increase in main-board listed companies post-millennium. By contrast, Australian venture capital (VC) funding has remained largely dormant. The opposite has occurred in the US: IPOs have fallen by half, and VC funding has surged. The authors examine the reason for this divergence between ASX IPO and US VC systems that, with their supporting ecosystems, have many features in common and function similarly. The authors explore the potential factors that could explain the US VC surge vis-à-vis Australia's VC stagnation.Design/methodology/approachThe authors’ analysis is predominantly qualitative. The authors describe the Australian listing process and its similar features and functions as for the prototypical VC. The authors also describe the developments in US VC driving its recent exceptional surge and highlight that such developments have not yet materialised on the Australian scene, where early-stage IPOs have served as a substitute.FindingsThe ASX's structure and ecosystem have been critical to its success in fostering early-stage main-board listings. While the US has succeeded in alternatively growing VC, there is an increasing concern that the latter has occurred partially because valuations are stretched, tax concessions for carried-interest capital gains are too high and corporate control benefits are becoming increasingly diluted. These developments could have important implications for Australia, where VC structures are currently being reviewed.Originality/valueTo the best of the authors’ knowledge, no prior study has attempted to bridge the broad differences in IPO and VC funding trends for early-stage companies in Australia and the USA.

Tax evasion and tax amnesties in regional taxation

Italian governments have frequently chosen tax amnesties or concessions, with the twofold purpose of creating new budget resources and cancelling irredeemable debts. Such course of action constitutes a “shortcut” policy in terms of fighting tax evasion, which is a matter less popular among voters and more demanding in terms of efficiency and political continuity. This paper investigates the effects of the 2016–2019 tax concession, bringing empirical evidence based on the car tax paid to the Tuscany Region. The car tax is the main source of regional fiscal autonomy in Italy. In terms of revenue recovery, we found a net amount of only 1.6% of the unpaid taxes accrued. A difference-in-difference (DiD) analysis of the effects on compliance showed that those who took advantage of the tax amnesty in the past, when cheating again, were more likely to default on their tax debts, as compared to those who did not join the amnesty program. Therefore, our analysis provides original evidence of a very low budget recovery and confirms the results of literature according to which tax amnesties impact negatively on taxpayers’ behaviour.

Regulating Political Advocacy by Charities Liberally

In countries such as Australia, Canada, the United Kingdom, and the United States, whether certain classes of civil society groups are eligible to receive state support (by way of tax and other concessions) is primarily based on the entity’s intended purpose. Yet governments often view the advocacy, electioneering, or lobbying activities that are the means adopted by some civil society organizations to achieve their purposes, as unjustified attempts to intervene in the political process. Attempts to restrict these activities are, thus, not uncommon but raise challenges to fundamental tenets of liberal democracies. This article uses recent Australian experience as a case study to analyze such attempts through rule of law and freedom of expression lenses. It focuses on advocacy and electioneering via peaceful protest/civil disobedience activities and argues that charities have a valuable role to play as political actors and that any restrictions should meet the requirements of certainty and proportionality.

Improving the utilisation of the fringe benefits tax concession by Public Benevolent Institutions

Improving the utilisation of the fringe benefits tax concession by Public Benevolent Institutions

An evolutionary game analysis of new energy vehicles promotion considering carbon tax in post-subsidy era

This paper uses evolutionary game theory to explore an effective carbon taxation mechanism in post-subsidy era based on hoteling demand. First, an evolutionary game model is constructed to explore interplays between local governments and auto-manufacturers. Then, optimal carbon tax mechanism and parameters sensitivity are analyzed and compared in different scenarios using empirical analysis. We conclude that: (1)In subsidy phase-out scenario, static carbon tax policy is better than phasing in carbon tax policy; in subsidy withdrawn scenario, phasing in carbon tax policy can popularize NEVs in a more stable way. (2)Under the mechanism of withdrawal subsidy and carbon tax phase-in, there exist marginal diminishing effects in phase-in rate r and carbon tax rate Tc; under the mechanism of subsidy phase-out and static carbon tax, both marginal increasing effect and marginal decreasing effect are existed in carbon tax rate Tc. (3)Under the mechanism of withdrawal subsidy and carbon tax phase-in, a threshold effect is found in carbon emission trading revenue Rc, license priority for NEVs consumers η, charging pile coverage rate β, corporate income tax concession Rd, consumers' low carbon preference θ and vehicle purchase tax Tb, while there is a marginal incremental effect in them under the mechanism of withdrawal subsidy and carbon tax phase-in, and the parameters in former mechanism are more sensitive. Further, those parameters are divided into three levels according to their influential degree, in which consumers’ low carbon preference θ is at first level. Accordingly, it is suggested that governments implement appropriate carbon tax policies at different industrial developmental phase, supplemented by support policies paying most attention on vigorously promoting low-carbon consumption or subsidizing low-carbon behaviors.

The Effect of Corporate Income Tax on FDI Inflow in the Mining Sector in Tanzania

Purpose: Tanzania is one of the mineral-rich countries giving corporate income tax (CIT) concessions to encourage foreign direct investment (FDI). Tanzania's mining industry remains enticing to investors, owing to its expanding diversity. This paper assesses the impact of corporate income tax in the mining sector for the period of 1990 – 2020. The paper also sought to analyse the impact of other determinants of FDI namely, Political stability, Human capital and infrastructure on FDI inflow in the mining sector.
 Methodology: The study utilized secondary annual time series data collected from the World Bank (WB), Bank of Tanzania (BOT), and Foundation for Studies and Research on International Development (FERDI). The Autoregressive Distribution of Lags (Ardl) estimating approach was used to analyse the short-run and long-run relationship between FDI and corporate income tax as well as the aforementioned variables.
 Findings: A negative relationship between corporate income Tax and FDI inflow in the mining sector was confirmed. Thus, portraying both short-run and long-run effects of corporate income tax on FDI inflow in the mining sector.
 Unique Contribution to Theory, Practice and Policy: To encourage and increase FDI inflow in the mining sector, the government of Tanzania requires concerted efforts with relevant authorities that will ensure a fair moderation of corporate income Tax which will in turn increase tax compliance. The concerted efforts carter for factors linked with FDI inflow such as corporate income tax, political stability, human capital quality, and infrastructure. These factors align concurrently with the eclectic paradigm which is the anchoring theory of the study.
 

Studi Empiris: Tax Avoidance pada Perusahaan non Keuangan di Bursa Efek Indonesia

The purpose of this study is to obtain empirical evidence regarding the effect of the proportion of independent commissioners, audit committee, audit quality, profitability, firm size, institutional ownership and leverage on tax avoidance. Previous researchers used 5 variables, namely the proportion of independent commissioners, audit committee, audit quality, profitability, and firm size. This researcher adds 2 variables, namely institutional ownership and leverage. This study obtained research samples using purposive sampling method. There are 396 data from 132 non-financial companies listed on the Indonesia Stock Exchange for the 2017-2019 period that have met the criteria. The multiple regression method is a model of this research. The results of this study indicate that profitability and leverage have a significant effect on tax avoidance, while other independent variables such as the proportion of independent commissioners, audit committee, audit quality, firm size and institutional ownership do not have a significant effect on tax avoidance. The larger the profit generated, the company will get tax incentives and tax concessions so that it appears to be doing tax avoidance. The larger the debt the company uses as financing, the interest expense that must be paid. The higher the interest expense, the lower the profit so that tax avoidance will be lower.