Tax Default Research Articles

New Legal Basis for International Risk Assessment Procedures in Germany: ICAP, ETACA

The new section 89b of the German Fiscal Code finally introduces a legal basis for international risk assessment procedures. Under these procedures, which are designed for cooperation and transparency, the tax administrations of two or more jurisdictions must at the request of the taxpayer provide an assessment of any tax default risks for facts already realized. If the risk is assessed as low, a formal review of these facts in a subsequent tax audit may be redundant.

Tax Compliance (Active Tax Payers) and Non-Oil Tax Revenue in Nigeria: Exposition of Fiscal Exchange Theory and Expectation Proposition

The paper investigated the tax compliance (active tax payers) and non oil revenue in Nigeria in relation to fiscal exchange theory and expectation proposition. The study adopted ex post facto research design; secondary data for nineteen years (2003 - 2022) were collected from various issues of the Federal Inland Revenue Services (FIRS) statistical bulletin and annual reports. Tax compliances as regressand variable was measured with number of actual annual total non oil tax revenue in Nigeria and Tax compliances among active tax payers of company income tax (CIT), Petroleum profit tax (PPT), Capital gain tax (CGT), Value Added Tax (VAT) and Personal Income Tax (PIT) as regressors. The data was analyzed using multiple regression analysis to establish the relationship between the dependent and independent variables. The findings revealed that tax compliance have significant effect on boosting tax revenue generation and that tax default can cause significant variation in government revenue. The variable in the model is significant at the 5% critical level and the regression coefficient reveals that 72.8% of the total variation in revenue is accounted for by tax compliance with other variables in the stochastic term accounting for the remaining 27.2%. Specifically, Tax Compliance (Active Tax Payers) is significantly and positively related to Active Tax Payers on Value Added Tax (ATVAT) (1.827925 ), Active Tax Payers on Company Income Tax (ATCIT) (2.84599) and Active Tax Payers on Petroleum Profit Tax (ATPPT) (2.286043 ), while Tax Compliance (Active Tax Payers) is negatively and insignificantly correlated with Active Tax Payers on Personal Income Tax (ATPIT)( -0.236908 ) Active Tax Payers on Capital Gain Tax (ATCGT)( - 0.236908 ) . It is recommended that Federal Inland Revenue Service should open more offices across the federation to increase the ease of paying taxes, set performance targets for managers of tax offices and sanction for non-performance.

Effect of Voluntary Assets and Income Declaration Scheme (VAIDS) on Economic Growth of Nigeria

Government in recent time gave attention to tax to enhance economic growth because of the persistent dwindling proceed of oil revenue to the Nigeria economy. To address this gap, the study examined the effect of voluntary assets and income declaration scheme (VAIDs) on economic growth of Nigeria. The study employed expost facto research design using while using macro data for the period 1994 to 2019. The statistical bulletin of the central bank of Nigeria and information from National Bureau of Statistics were sourced and used alongside relevant journals. Descriptive and inferential statistics emplying multiple regressions were adopted in data analysis as the date were already validated by regulators and statutory authorities. Findings from the study revealed that VAIDs proxied by custom and excise duties, company income tax and value added tax) have significant effect on economic growth. (Adj. R2 = 0.51, F (3,21) = 9.211, p< .0.05). The study submitted that VAID was a success programme that contributed significantly to economic growth of the nation. Therefore, to increase participation and continued compliance, mechanisms must be put in place to strengthen the current tax system and also ensure participants comply with their payment of taxes even after the end of the Scheme. While the revenue generating units of the governments are encouraged to do more, the study further recommended that VAID should be a one-off amnesty programme for tax defaulters

The Legal Impact and Relevance of Using Plea Bargains to Resolve Tax Disputes in Nigeria

Governments use taxes to generate the revenue needed to provide basic facilities for society. However, taxpayers may evade tax liabilities or default, compelling tax authorities to resort to quasi-criminal litigation to recover taxes. Evidently, the process involved in prosecuting tax defaulters or recovering tax liabilities as provided for in the Personal Income Tax Act of Nigeria and as observed in a plethora of cases is often strenuous, cumbersome, and bureaucratic. Furthermore, the process is slow, and is unfriendly to taxpayers; hence, plea bargains are needed in prosecuting tax cases involving tax liabilities. In this study, online questionnaires were sent to 321 respondents (randomly selected) residing within the federal republic of Nigeria to ascertain the utility and favorability of using plea bargains to resolve liabilities. Descriptive and analytical statistics were used to analyze the collected data. The study found that plea bargains are viable prosecutorial tools for resolving tax offenses or recovering tax liabilities. Therefore, this study recommends using plea bargains owing to its speed in resolving tax offenses or recovering tax liabilities and its less bureaucratic and more amicable nature compared to quasi-criminal litigation.

IMPROVING HOLDING TAX ASSESSMENT – A CASE STUDY OF NIRALA RESIDENTIAL AREA, KHULNA

This study presents the development of a land information system for a residential area in Khulna city of Bangladesh. The system is designed to provide the Municipal Corporation an ability to assess the holding tax in an automated GIS based application, which can also assist to trace out tax delinquency and tax defaulters. This study demonstrates a case study of a database system which can be easily maintained, queried and updated than the current hard copy database. This system can be practiced by other City Corporation and Municipality in Bangladesh for raising their internal revenue income.

An Empirical Investigation into the Relationship between Electronic Tax Management System and Tax Revenue Collection Efficiency in Selected States in South West, Nigeria

Tax revenue generation in Nigeria has received contemporary discuss and debate in accounting literature and this has aroused great concern for the attainment of sustainable development. The attainment of revenue goals have been adduced to the fact that many issues and challenges faced are multiplicity of taxes, non-availability of database, difficulty in keeping proper track records of tax payers or defaulters, complexity in tax compliance and collection and non-payment of tax refunds amongst others. The study investigated the effect of electronic tax management system on tax revenue collection efficiency. The survey research design was adopted for the study and total enumeration sampling technique was adopted. A total of 2670 copies of structured questionnaires were distributed to respondents across the three selected states to illicit responses while 2199 copies were retrieved back which accounted for 82.4% response rate. Reliability ranged between 0.7 and 0.9. Data were obtained through the use of a well-structured questionnaire. Descriptive and inferential (multiple regression) statistics were used for data analysis. The findings revealed that electronic tax management system measured by Perceived ease of use, internet payment system, mobile payment system and electronic billing machine had a significant impact on the simplicity of filing tax return of tax payers (Adj R2 = 0.113, F-stat = 68.343, p &lt; 0.005). The study concluded that electronic tax management system impacted tax revenue collection efficiency. The study recommended that tax policy makers should ensure that the electronic tax system is designed in such a way that it will make the filing of tax return very simple and will motivate tax payers to pay their taxes and skillful personnel should be made to be in charge of the tax management system.

Summaries of Articles

Summaries of Articles

Feature selection using evolutionary algorithms: a data-constrained environment case study to predict tax defaulters

In this paper, a novel method is introduced to predict tax defaulters from the given data using an ensemble of feature reduction in the first step and feeding those features to a proposed neural network. The feature reduction step includes genetic algorithm (GA), particle swarm optimisation (PSO) and ant colony optimisation (ACO) in the performance analysis to determine the best approach. The second stage deals with experiments on the architecture of a neural network for appropriate predictions. The results indicate improvement in tax defaulter prediction on using the feature subset selected by PSO. This research work has also successfully demonstrated the positive influence on the usage of linear discriminant analysis (LDA) to perform dimensionality reduction of the unselected features to preserve the underlying patterns. The best results have been achieved using PSO for feature reduction with an accuracy of 79.2% which is a 5.4% improvement compared to the existing works.

Feature selection using evolutionary algorithms: a data-constrained environment case study to predict tax defaulters

Feature selection using evolutionary algorithms: a data-constrained environment case study to predict tax defaulters

Feature Transformation for Corporate Tax Default Prediction: Application of Machine Learning Approaches

Applications of machine learning (ML) and data science have extended significantly into contemporary accounting and finance. Yet, the prediction and analysis of taxpayers’ status are relatively untapped to date. Moreover, this paper focuses on the combination of feature transformation as a novel domain of research for corporate firms’ tax status prediction with the applicability of ML approaches. The paper also applies a tax payment dataset of Finish limited liability firms with failed and non-failed tax information. Seven different ML approaches train across four datasets, transformed to non-transformed, that effectively discriminate the non-default tax firms from their default counterparts. The findings advocate tax administration to choose the single best ML approach and feature transformation method for the execution purpose.

Deterrent tax fraud in nigeria: a causal factor and conceptual review

Deterrent as punishment to tax fraud is an age long tool correcting tax offender and ensuring prompt response to payment of tax levies, as it were from inception tax fraud is astronomically on the increase rather than declining. The aim of this paper was to assess the role of deterrent on tax fraud in Nigeria. The study attempts to review components of tax frauds applicable to deterrent as punishment on tax defaulters or culprits. The paper presents detailed analysis of tax evasion, avoidance and causes of tax fraud with possible reasons responsible for taxpayer declines to file in tax obligations as oppose to willingness to pay. Specifically, it supervene major inherent problems and lukewarm attitudes of government inability to mitigate tax levy into responses and outcomes. Hence, demystifies credible and genuine reasons for or toward tax revenue realizations, responses and outcomes. Moreso, the paper identifies basis for future research, expanded the scope of study and highlighted relevance arguments among reviewed related theoretical issues using a causal factor and conceptual approach thereby involving survey of literature to bring relevance issues to the fore as oppose to the aforementioned nomenclatures. Essentially, various tax penalties ensuring defaulters is punishable relative to the proportion of offenses involved were discussed. Thereafter, pass on to overhaul prior studies, gaps in reviewed prior studies and domesticate the study on relevant deterrent school of thoughts. It therefore, concludes that Tax fraud may not have an end in Nigeria, if those saddled with the responsibility of tax all-encompassing, inclusiveness, delivering tax-welfare to taxpayers are seen not transparent, accountable, sincere, sensitive to the plight of tax payers, and devoid of skirmishes as well as translating taxes revenue into responsibility. However, propose that deterrence is not anylonger the way to go, having tossed both sides of the divide, exigency of time have to take precedence; and allows civility, novelty, automation and all-inclusiveness muster and remediate tax fraud in Nigeria.

Tax Default Prediction Using Feature Transformation-Based Machine Learning

This study proposes to address the economic significance of unpaid taxes by using an automatic system for predicting a tax default. Too little attention has been paid to tax default prediction in the past. Moreover, existing approaches tend to apply conventional statistical methods rather than advanced data analytic approaches, including state-of-the-art machine learning methods. Therefore, existing studies cannot effectively detect tax default information in real-world financial data because they fail to take into account the appropriate data transformations and nonlinear relationships between early-warning financial indicators and tax default behavior. To overcome these problems, this study applies diverse feature transformation techniques and state-of-the-art machine learning approaches. The proposed prediction system is validated by using a dataset showing tax defaults and non-defaults at Finnish limited liability firms. Our findings provide evidence for a major role of feature transformation, such as logarithmic and square-root transformation, in improving the performance of tax default prediction. We also show that extreme gradient boosting and the systematically developed forest of multiple decision trees outperform other machine learning methods in terms of accuracy and other classification performance measures. We show that the equity ratio, liquidity ratio, and debt-to-sales ratio are the most important indicators of tax defaults for 1-year-ahead predictions. Therefore, this study highlights the essential role of well-designed tax default prediction systems, which require a combination of feature transformation and machine learning methods. The effective implementation of an automatic tax default prediction system has important implications for tax administration and can assist administrators in achieving feasible government expenditure allocations and revenue expansions.

On para-penal evolution of administrative tax sanctions on the example of additional tax liability and default interests (Polish and Italian comparative analysis)

In recent decades administrative tax penalties in Italy evolved in para-penal direction. This means they have acquired some of the principles and features typical for criminal law. In the meantime administrative tax penalties in Poland were developed significantly and, so, doubts on mutual relation of criminal and administrative sanctions emerged. Comparative analysis in terms of the phenomenon noted in Italy might help to solve this problem. So far, the Polish administrative tax penalties have not evolved in para-penal direction as Italian ones. Yet, there are signs of similar tendencies.

Interrogating the Impact of Voluntary Asset and Income Declaration Scheme (VAIDS) on Tax Administration in Nigeria

This paper examined the impact of the Federal government of Nigeria’s tax amnesty programme tagged “Voluntary Asset and Income Declaration Scheme (VAIDS) on tax administration in Nigeria. This task is premised on the global reality of governments facing challenges funding developmental projects and other government paraphernalia due to paucity of funds as a result of tax evasions and tax avoidances. In most developing countries such as Nigeria, this tax evasions and avoidances have serious repercussion on the economic growth and development strides of the nation. To avert this menace, the federal government of Nigeria in line with some other countries of the world, created a tax amnesty window called Voluntary Assets and Income Declaration Schemes (VAIDS) to beat tax defaulters at their game and boost revenue generation towards generating the needed funds for developmental projects. For the purpose of this examination, data were generated through the secondary sources of data collection and analyzed with the content analysis. From the analysis, the paper found among others that VAIDS has impacted positively on revenue generation by expanding taxpayer’s data base and also enhanced the identification of tax defaulters. However, poor adoption of information and communication technology (ICT) and the inadequate publicity among others are the constraining factors to VAIDS achievement of its US$1bn target. Based on the findings, the paper recommends among others, proper institutionalization of ICT in data management for tax registration, assessment and collection processes and enforcing the penalties associated with not complying with VAIDS mercy window.

CRITICAL SUCCESS FACTORS TO TAX ADMINISTRATION EFFICIENCY IN NIGERIA: EVIDENCE FROM BAUCHI STATE BOARD OF INTERNAL REVENUE

This study investigates the determinants of tax administration efficiency in Nigeria. The Nigerian tax system is faced with challenges, such as loss of revenue through high level of tax defaulters from both the legislative arm of the government and public institutions, corruption and financial irregularities and limited government administrative capability. Therefore, current study examines the influence of autonomy of the State Board of Internal Revenue (SBIR), use of information and communications technology, public enlightenment, strong auditing practice, motivation and incentives and perceived corruption on tax administration efficiency in Nigeria. A total of 124 questionnaires were collected out of 144 questionnaires that were administered. The study revealed that there is a significant positive relationship between tax administration efficiency and: autonomy of board of internal revenue, information and communications technology and public enlightenment. However, findings from the study revealed that there is insignificant relationship between tax administration efficiency and strong audit practice and motivation and incentives and perceived corruption. Based on the findings above, the study recommended that government should put an effective measure in place to collect taxes from tax defaulters across the different groups of the economy.

The Troubled Story of the Hungarian Advertisement Tax: How (Not) to Design a Progressive Turnover Tax

The provisions of the Hungarian Advertisement Tax stirred up many legal debates regarding the potential breach of EU law, including State aid rules and EU fundamental freedoms, respectively, as well as the violation of the non-discrimination provision of double tax conventions. The implications of these legal questions go beyond the Hungarian tax system and have special relevance on international and EU levels. This article analyses the compatibility of progressive turnover-based taxes with EU law that is of paramount importance now when Member States unilaterally introduce similarly designed digital taxes. Furthermore, the article also sheds light on the application of the non-discrimination clause of double tax conventions and the EU fundamental freedoms to procedural rules designed to enforce taxes on taxpayers who are likely not to be physically present in the taxing jurisdiction. Turnover taxation, digital tax, progressive tax rate structure, advertisement tax, tax treaty non-discrimination, state aid, registration requirement and default penalty, EU fundamental freedoms.

A study on the impact of income tax default to tax revenue in sri lanka

A study on the impact of income tax default to tax revenue in sri lanka

Knock, Knock: The Taxman\u2019s at Your Door! Practice Sense, Empathy Games, and Dilemmas in Tax Enforcement

Tax administrators are empowered by the state to secure compliance with tax obligations. Enforcing compliance on the ground is complex, and street-level administrators often engage in the “art of the possible,” leading to dilemmas in the field. This paper examines tax administrators’ practices with regard to Jamaican property tax defaulters with outstanding tax liabilities in excess of 3 years. Drawing on interviews with tax administrators and other key agents, we find that tax administrators reposition themselves from objective enforcers to empathizing officials engaging in schemes of action, doing what they can do rather than what they should do. This is a practical-sense approach to securing compliance. We identify two forms of empathy, assimilated and cynical, and conclude that administrators’ empathetic identification with defaulters does not necessarily arise solely from concern for social cohesion, or inter-subjective compassion, but also sometimes from self-interest.

The impact of GDPR on European Name & Shame tax defaulter lists

This research analyses and compares tax defaulters’ lists in Europe from the legal perspective arising from the introduction of the General Data Protection Regulation. We examined various regulatory systems which reflect a cross section of these ‘Name & Shame’ lists in Greece, Ireland, Portugal, Spain and the United Kingdom. Our findings indicated some legal aspects that contravene the GDPR rules. As a solution we propose a minimum standard model that allows for the publication of tax defaulter information without impinging on citizens’ fundamental rights.

Efeitos do programa de Nota Fiscal eletrônica sobre o aumento da arrecadação do Estado

Resumo O objetivo deste artigo é verificar se a implantação do programa de Nota Fiscal eletrônica (NF-e) gerou como consequência algum incremento na arrecadação do Estado de Goiás. Para tanto, utilizaram-se testes de médias e estimação de regressões difference-in-differences. Os resultados indicaram que a média de arrecadação no Estado de Goiás é estatisticamente superior no período posterior à implantação da NF-e e que o aumento da arrecadação das empresas obrigadas a emitir NF-e foi maior do que o daquelas que não são obrigadas. Assim, apesar do foco principal da NF-e não ser o aumento da arrecadação, pode-se observar que a institucionalização de um programa para padronização e compartilhamento dos documentos fiscais incluiu melhorias nos processos de fiscalização da administração tributária, aumentando a arrecadação do Estado por meio da redução da inadimplência.