Efficient Tax Research Articles

Tax-efficient practices for businesses

Regardless of the sector a business operates in or the size of the organisation, it needs to be run taxefficiently. There are, thankfully, many opportunities ready to be legally exploited and Helen Thornley offers guidance on the steps that can be taken to improve your organisation's tax efficiency

Inter-Dependency and Inter-relationship Among Tax Revenue, Infrastructure and Human Capital Development in Nigeria: Small Scale Macroeconometric Model

Recently, there has been increased calls for human capital development across the African economics. The role of human capital to economic growth and development cannot be overemphasized. Infrastructural development and efficient tax system are veritable tools for promoting human development. When human development is stunted, infrastructural development and tax revenue also shrink. This paper examined the inter-relationship and interdependency among tax revenue, infrastructure and human development in Nigeria for the period 1980- 2021. This paper adopted the simultaneous equation modeling approach and a system of equations where tax revenue, infrastructure and human development are taken to be exogenous. From the result, temporary 10 percent increase in value added tax revenue has higher effect on human capital development , real GDP and broad money supply. In contrast, permanent increase in value added tax revenue has higher effect on government spending on social and community services(including health and education) and inflation rate than the temporary 10 percent increase in value added tax revenue. Hence, to increase human capital development in Nigeria, temporary tax revenue shock is sufficient. The government should diversify its revenue base and expend more on health and education in addition to building a strong institutional framework to ensure the efficacy of government spending on both health and education. Keywords: Infrastructure, human capital, macroeconometric model, tax revenue, Nigeria JEL Codes: H54, J24, F41, H24 DOI: 10.7176/RHSS/13-6-04 Publication date: March 31 st 2023

Efficiency of additional income tax in hydrocarbon production

Efficiency of additional income tax in hydrocarbon production

Tightening tax policy and changes to tax efficiency on the example of companies listed on the Warsaw Stock Exchange

The article presents an analysis of changes in the tax efficiency of companies listed on the Warsaw Stock Exchange. After 2017, some changes to the tax law aimed at tightening the regulations on an unprecedented scale were introduced. The research conducted showed that since 2018 there has been a decrease in tax efficiency measured with effective tax rate (ETR) and current effective tax rate (CETR). On average, in 2018–2019, the efficiency measured with CETR dropped by 17.7%, the median by 14.8% compared to the previous years. In 2018 and 2019, the value of the CETR was the highest in the entire analyzed period, i.e. from 2012 to 2019. At the same time, the propensity of companies to create deferred tax assets is declining, and the effective tax rate is also growing. The changes mainly concern companies with average tax efficiency, large entities forming capital groups, and companies implementing capital investments. The article presents a discussion on the observed trends and formulates directions for further research.

Uniform, efficient and independent Ramsey taxes across markets

In a perfectly competitive market and in multi-product monopoly with linear demands and costs, the socially optimal taxes are Ramsey independent taxes (RIT), which are independent of each other, have a simple structure, reduce all products proportionally, and affect consumers and firms in similar ways. Under imperfect competition, while not optimal in general for both social welfare and consumer surplus objectives, RIT nevertheless retain attractive uniform effects in all markets. In asymmetric Cournot and Bertrand oligopolies, the socially and consumer-efficient taxes are surprisingly complex even in simple settings. Postulating a third objective of taxation as the average of social welfare and consumer surplus restores the optimality of RIT. Finally, another important property is that RIT impose equal corresponding marginal costs across all types of markets, as required for economy-wide efficient taxation.

Approaches on the Efficiency and Necessity of Communication Tax in terms of Local Tax Nature

Yerel hizmetlerin üretim ve sunumunu gerçekleştiren yerel yönetimlerin, üstlenmiş oldukları hizmet ve harcamaları yerine getirebilmeleri için mali yönden yapılarının güçlü olması gerekmektedir. Yerel yönetimlerin mali kaynaklarının süreklilik ve verimlilik özelliklerine sahip olması ise mali kaynaklarının etkinliğini sağlayıcı kavramlardır. Bu açıdan yerel yönetimlerin en önemli gelir kaynağı vergilerdir. Yerel yönetim vergi gelirleri içinde yer alan haberleşme vergisi, 1981 yılından itibaren Belediye Gelirleri Kanununda yer alarak uygulanmaya başlanılmıştır. İlk uygulandığı 1981 yılından günümüze haberleşme kaynakları ve haberleşme teknolojisi büyük bir değişime uğramasına karşın, kırk bir yıllık uygulama sürecine sahip olan haberleşme vergisinin kapsam ve uygulama şeklinde hiçbir değişime uğramamıştır. Gerek Türkiye’de ve gerekse dünyada büyük bir değişim, çeşitlilik ve ivme kazanmış olan haberleşme kaynak ve teknolojisi, haberleşmeyi insan yaşamında en önemli kullanım ve buna bağlı olarak en önemli harcama unsuru durumuna getirmesine karşın, Türkiye’de uygulanan haberleşme vergisi yerel yönetimlerin gelir unsuru olarak gelişim ve önem kazanamamıştır. Haberleşme vergisi yerel yönetimlerin düzenli ve sürekli olan gelir kaynaklarından biri olmasına karşın, yerel yönetimlerin toplam gelirleri içindeki payı son derece düşük düzeyde bulunmaktadır. Çalışmada haberleşme vergisinin etkinliği ve gerekliliği incelenerek öneriler ile yeni bir yaklaşıma ilişkin önermeler yapılmıştır.

Corporate income tax competition and efficient tax base equalization

The literature on tax competition argues that the representative tax system (RTS), which is a standard form of tax base equalization, can internalize interregional externalities due to capital mobility. Although this conventional view holds when per unit tax on capital is imposed, it does not hold when corporate income is subject to tax. This paper proposes an efficient tax base equalization system under which each region’s tax base is evaluated by the average factor return of all regions, not by each region’s factor return (as in RTS). By investigating the nature of externalities arising from non-cooperative tax policy, we explain the workings of our “average-return” tax base equalization system.

Free Trade and Tax Efficiency in the West African Economic and Monetary Union: what can we learn for the AFCFTA?

The aim of this paper is to examine the effect of free trade on the tax efficiency of West African Economic and Monetary Union (WAEMU) countries. Specifically, the objective is, on the one hand, to determine the tax efficiency levels of the various taxes, and, on the other hand, to determine the influence of the common external tariff and trade openness on the tax efficiency of the various taxes in WAEMU countries. Using panel data over the period from 1980 to 2019, a stochastic tax frontier model is estimated to determine tax efficiency scores. A censored Tobit model is then used to assess the effect of free trade on the tax efficiency of countries. The results show respective average tax efficiency scores of 75.494%; 3.355%; 69.312% and 60.336% for total tax, direct tax, indirect tax and tax on foreign trade in WAEMU. In addition, the common external tariff and trade openness positively influence the tax efficiency of countries. However, the interaction between free trade and structural transformation, the quality of tax administration and income inequality reduce the tax efficiency of taxes. Decision-makers need to urgently take into consideration the structural transformation of economies, and the improvement of the efficiency of tax administrations in order to benefit from the application of the AfCFTA.

Аналіз фіскальної ефективності податку на доходи фізичних осіб та військового збору в місцевих бюджетах областей

The aim of the article is a comprehensive analysis of the fiscal efficiency of personal income tax in the revenues of consolidated local budgets of both the regions of Ukraine and the city of Kyiv; identification of factors and trends that cause changes in its volume and structure. The article analyzes the tendencies of changes in the receipt of the personal income tax and military fee on the income of individuals to the budgets of different levels, determines the change in their structure; an analysis of the receipt of the personal income tax and military fee on personal income to the local budget is carried out by the components – both in general and in relation to the local budgets of the regions and the city of Kyiv; tendencies of changes in the volume and share of personal income tax paid by tax agents from the taxpayer’s income in the form of wages and financial provision of military personnel in the regional context to local budgets are analyzed; structural changes in personal income tax as a fiscally significant tax in the formation of local budget revenues have been identified. The factors influencing the change in the volume and structure of personal income tax revenues are substantiated, among which the key one is the turbulent environment in Ukraine caused by a full-scale war, relocation, destruction of the material and technical base of business or temporary loss of business activity. This led to job losses, a decrease in wages, migration of the able-bodied population to other countries and, accordingly, affected the amount of personal income tax paid by tax agents from taxpayers’ salaries. The increase in personal income tax revenues in 2022 was due to an increase in the rate of enrollment in local budgets from 60.0% to 64.0% and an increase in personal income tax on financial provision of military personnel. Other components that form the personal income tax are insignificant and occupy less than 10%, while there is no increase, due to the weakening of tax control and the ongoing tax evasion by both taxpayers and tax agents, as well as partial shadowing of business.

Налоговый и таможенный мониторинг: сравнительно-правовой анализ

The subject of the study is the legal regulation of tax and customs monitoring. The purpose of the work is to improve the efficiency and quality of tax and customs control to ensure the prevention of violations of legislation and to promote the lawful behavior of non—governmental entities in the public field. The article highlights the features of both types of monitoring, substantiates the specifics of their legal regulation in terms of increasing the effectiveness of state functions in the field of tax and customs regulation. The definition of monitoring is given and differences in the nature of its regulation are established: in tax legislation monitoring is fixed as a form of control, while in relation to customs monitoring its place in the customs control system is not defined. The signs of self-regulation or joint regulation of the control and supervisory interaction of the state in the form of a tax authority and a non-governmental entity (taxpayer) are highlighted. To achieve the objectives of this study, methods of system analysis, synthesis, classification, comparative legal and formal legal methods were used. Based on the analysis of the legal regulation of tax and customs monitoring, conclusions are drawn about their general principles and regulatory trends.

Tax administration: essence, problems and development prospects

The existence of any state and the implementation of its functions are directly related to the need to form revenue sources of the state budget. In all countries of the world, tax revenues are the basis for providing the state with financial resources. The use of effective tax administration is due to a number of reasons: the reluctance of some taxpayers to fully pay their tax obligations, the instability of tax legislation, and the presence of arrears in budget revenues. The problem of filling the budget is acute for the economy in conditions when extensive methods of increasing tax revenues have actually been exhausted. An increase in the tax burden can lead to a decrease in entrepreneurial activity, the inability of business entities to timely update and introduce new technologies that are more advanced and equipment into production. All of the above contributes to strengthening the activities of state regulatory bodies to combat tax debts, take measures against tax evaders. In this regard, not only new forms of tax administration are being introduced, but attempts are also being made to introduce a system for assessing the effectiveness of the tax services themselves. The creation of such a system will make it possible to disseminate the best practices of the most efficient tax authorities and, in general, will contribute to improving the quality of tax administration and increasing tax revenues to the budget.

TAX SYSTEM STRATEGIES, THEIR ANALYSIS AND WAYS OF IMPROVEMENT IN REPUBLIC OF ARMENIA

Tax system strategies generally indicate the set of mechanisms needed to create an efficient tax system. In this context, the analysis of the strategies of the tax system is aimed at the discussion of the correct definition of strategic goals and the possibilities of their implementation. By analyzing the strategies of the RA tax system, the omissions and errors are revealed, which should be taken into account in the process of developing tax system strategies. It is necessary to improve the strategies of the tax system, because as a result it will be possible to develop such goals. In turn, the implementation of the strategy may contribute to the formation of an effective tax system. In this regard, the performed analyzes and studies show that one of the directions for improving the strategies of the tax system is the objective and fair evaluation of the functions of the tax system. The formation of an objective and effective evaluation system of the functions of the tax system will allow to understanding to what extent the performed functions contribute to the realization of the goals of the tax system by implementing such functions, as a result of which the efficiency of the tax system will increase.

Study of impact of VCF tool and effectiveness of PPP model for urban development

Land has been one of the most important sources for revenue to the local bodies, which is subject to value addition through infrastructure creation. Of late, value capture financing has become an important option for mobilizing infrastructural development finance by local urban bodies. Urban development cannot take place without construction of good roads, ensuring quality water supply, ensuring uninterrupted good quality electricity, provision of streetlights, development of drainage system etc. in a city.The present paper is an attempt to study the urbanization process through land development and ensure efficient tax collection by the State through involvement of private agencies and proper assessment of taxes on households. After introduction of self-assessment taxation process in 2015-16 it has been noticed that there is quantum jump in the collection of tax revenue, which has resulted in accelerating the process of urban development in major districts of the State. In the present paper, Ranchi Municipal Corporation are being considered for the study.

Analisis Efektivitas, Efisiensi dan Kontribusi Pajak Daerah dalam Peningkatan Pendapatan Asli Daerah (PAD) Kabupaten Bondowoso

This study aims to determine the effectiveness, efficiency, and contribution of regional taxes in increasing Regional Original Income (PAD) in Bondowoso Regency. The source of the data used in this study is secondary data in the form of a Budget Realization Report (LRA) which consists of targets, realizations and collection costs from hotel taxes, restaurant taxes, street lighting taxes, and Bondowoso Regency Original Revenue (PAD). This study uses a descriptive method with a qualitative approach and processes data using an analysis of effectiveness, efficiency and contribution. The results of the research show that hotel taxes, restaurant taxes, and street lighting taxes are very effective and very efficient in increasing Regional Original Income (PAD). Then the contribution results show that hotel taxes, restaurant taxes, and road lighting taxes are very less contributing to the increase in Regional Original Income (PAD) of Bondowoso Regency.

Regional Native Income (Pad) Towards Regional Development In Tegal Regency

This research is based on the decline in the growth of Regional Original Income (PAD) in the 2017 and 2021 Fiscal Years. As a source of regional financing, PAD revenue should continue to increase. The purpose of this study was to determine the level of efficiency, effectiveness and contribution of local taxes in increasing local revenue in Tegal Regency in 2017-2021. This study uses descriptive quantitative analysis techniques. The source of data used in this study is secondary data, namely data obtained indirectly through intermediary media such as other people or archive documents of the Regional Revenue Service (Dispenda) of Tegal Regency. The data used is a report on the realization of Tegal Regency's regional income for the 2017-2021 fiscal year. The average regional tax efficiency of Tegal Regency in 2017-2021 is 84% classified in the criteria of being quite efficient. The average level of effectiveness of the Tegal Regency regional tax in 2017-2021, which is 96.05%, is classified in the Ineffective criteria. The average regional tax contribution rate of Tegal Regency in 2017-2021, which is 454%, is classified as very good.

Factors Explaining Tax Compliance

The aim of the article: The aim is to examine factors explaining tax compliance identified in the Economy to design an efficient tax compliance system. Methodology: In order to achieve the formulated aim, the paper provides an economic literature review on tax compliance related to the efforts of governments to encourage taxpayer compliance while minimizing the cost of a tax administration’s activity. The paper presents a brief laying out the economics of tax evasion. Them, it focuses on critical summaries of what has been learned. Results of the research: The different factors identified indicate that tax compliance is a complex problem, with evident social costs and a significant impact on tax administration decisions. The tax compliance system minimizes the uncertainty and encourages the adoption of a series of voluntary mechanisms for cooperation between taxpayers and the tax administration.

Non-resource revenues and the resource curse in different institutional structures: The DIGNAR-MTFF model

Numerous studies have examined the resource curse using different perspectives. This study investigates how the resource curse occurs in three countries with different institutional structures using a new model. The DIGNAR-MTFF model introduced and presented in this article is a combination of the DIGNAR model and the FMM-MTFF model. This model includes a consistent framework for industrial production, the inflow of intermediate goods, public investment inefficiencies, learning-by-doing externalities in foreign and intermediate goods sectors, and absorptive capacity constraints. In this research, the Input-Output Table data for Saudi Arabia, Mexico, and Norway in 2015 have been used. A simplified three-sector version of the Input-Output table compares the model's output for countries. The model is used under a specific scenario with different oil revenue cycles. The results for Saudi Arabia, a country with a specific institutional structure characterized by high dependence on oil revenues, show that the effects of abundant resources on non-resource incomes are severely negative indicating that Saudi Arabia experienced the Dutch disease with more intensity. The Dutch disease was less severe in Norway and Mexico, which have broader tax systems based on different institutional structures. The model's results show the role of an efficient tax system in overcoming natural resources' revenue cycles and the independence of the economies from these revenue cycles thus avoiding the resource curse.

ANALISIS EFEKTIVITAS RETRIBUSI DAN PAJAK DAERAH TERHADAP PENINGKATAN PENDAPATAN ASLI DAERAH (PAD) KABUPATEN MAGELANG TAHUN 2016-2019

The objective of this study to investigate and assess the efficacy of local taxes and punishments in boosting the Regional Original Income (PAD) in Magelang Regency. This descriptive study takes a quantitative approach to research, therefore it is a quantitative study. We make use of secondary data that includes information on plans/targets as well as actual local tax revenues, regional levies, and Regional Original Income (PAD). In addition to primary data, secondary data collected by BPPKAD Magelang Regency was used in this study. This is accomplished by measuring and analyzing the efficacy of local and regional taxes on Regional Original Income (PAD). Magelang Regency's local taxes, regional levies, and regional original income (PAD) are the primary focus of this analysis. This research shows that the regional tax share of regional original income (PAD) is, on average, 111.63 percent efficient, making regional taxes very efficient according to the criteria used to classify regional tax efficiency. The regional levy component on Regional Original Income (PAD) has an efficiency of, on average, 78.76% between 2016 and 2019, according to the classification of regional levy effectiveness criteria.

Is Revenue Neutrality in Carbon Taxation Possible in Practice? Lessons from the Canadian Experience

While the potential economic efficiency, equity, and political acceptability benefits of a revenue-neutral carbon tax have been well studied, a deeper question remains about the feasibility of revenue neutrality in practice. This article provides perspective on this issue by assessing different definitions of revenue neutrality and presenting an in-depth discussion of the motivations for the adoption of revenue-neutral carbon taxes. Two examples of carbon taxes and revenue recycling implemented in Canada are examined: British Columbia's revenue-neutral carbon tax (a carbon tax with offsetting tax cuts) and the Canadian federal government's fuel charge and climate action incentive tax credit (a carbon tax and dividend). The BC case serves to highlight the inherent difficulties of assessing revenue neutrality owing to uncertainty about what would have occurred in the absence of the tax. As time passes following initial implementation of the tax, it becomes increasingly difficult to determine whether, and to what extent, government revenue, income tax rates, the overall tax structure, and the tax base might have differed had the tax not been adopted. The federal example suggests that a carbon tax and dividend policy would be better able to ensure revenue neutrality.

A Holistic Approach to Creating High Income Portfolios That Are Risk–Return Efficient and Tax Aware

Retirees and other investors may prefer to use dividends from equities and interest from fixed income to fund their spending needs. This mental accounting phenomenon of spending the portfolio’s income without drawing down the invested principal makes them seek high income–producing asset classes. These investors, either directly or via advisors, adopt static high income portfolios as an investment strategy, often ignoring risk–return efficiency and tax efficiency principles. In this article, the authors introduce a methodology to systematically construct high income portfolios through an expected utility of wealth maximization approach while allowing for the incorporation of an investor’s income preferences. However, because asset return expectations are conditional on asset valuations, the authors find that popular static high income portfolios that are created on an ad hoc basis—by substituting broad market exposure with high-yielding assets—by design are not optimal. More importantly, the authors find that high income portfolios are tax inefficient when it comes to high tax bracket investors, making their use only appropriate when taxes are not a primary concern—for example, for low- to moderate-income investors or in a tax-deferred account.