Tax Function Research Articles

DIRECTIONS FOR IMPROVING EFFICIENCY OF THE TAX SYSTEM ON THE BASIS OF OPTIMIZATION

The effectiveness of tax administration is investigated in countries such as the Netherlands, Sweden, Norway, Estonia, Switzerland, Germany, Denmark, New Zealand and the United States, Ukraine. The principles of efficiency of the tax system that are entrusted to it are characterized. In order to assess the effectiveness of the tax system in a particular economic model it is proposed to use indirect macroeconomic indicators, as well as important indicators of the efficacy of the tax system, namely internal characteristics, which are markers of the potential for the implementation of tax functions. An important indirect indicator of the effectiveness of the operations with the mobilization of payments and collection and the computerization of operations with the support, as well as the activity of the robot of the country, is also active in the entry into the Plan of the BEPS. Their implementation of the procedure for the development of the efficiency of tax administration by the gentry of changing the number of pardons when the declarations are folded, in a short hour at the last time the economy of the costs of the working hour and evil.

THE ECONOMIC BASIS OF WEALTH AND ITS TAXATION

The purpose of this paper is to examine the current problems of wealth, which is due to the current steady trends of increasing wealth and the increasing number of wealthy people. The aim of the paper is to define the essence, prerequisites for the emergence and development of wealth, as well as to reflect the historical aspects of the evolution of wealth and its present state. The topic of the article is conditioned by the necessity to reveal modern stratification of social strata by the level of wealth, formation of society's wealthy class and its growth, processes of wealth creation and multiplication. At the same time, the purpose of the article is to study wealth as an object of taxation. In this connection, the economic essence of wealth tax and prerequisites for its introduction were considered, the specifics of functioning of wealth tax in the market economy were determined, and the most important features of functioning of wealth tax were revealed. Methodology. A correct analysis of the social structure of society in terms of material well-being makes it possible to assess the efficiency of the economy and the quality of public policy in the system of creation and distribution of public income, public goods and wealth. Without the results of these calculations, fatal errors arise in the choice of state priorities of socio-economic policy and in making optimal decisions in the financial sphere. The study is based on the comparison of wealth tax data in different countries. Results. The question and modern specificity of wealth is explored. The value of wealth to society and the state is determined. Wealth tax is an effective fiscal instrument of the state in the distribution of state revenues. Wealth tax exists in many countries in various forms. Practical implications. Possibilities of increasing welfare and increasing wealth are considered. An adequate assessment of wealth and well-being will allow the state to conduct a balanced and effective socio-economic and financial policy to stabilize society and adopt a stable social order. The financial essence of the wealth tax and the prerequisites for its introduction were studied. The specifics of functioning of wealth tax in the market socially oriented economy are considered. Value/originality. It was found that wealth is a complex, multifaceted category, which can be characterized as a specific feature of the socio-economic structure of society, which determines its state, results, dynamics and trends of development. Wealth characterizes the ability to achieve a positive result (effect) in the market conditions of management and use of socio-economic potential available in the society, which indicates the level of its civilizational development. The features of functioning of wealth tax in different countries of the world are considered. The use of wealth tax as a fiscal tool in the tax system of the state was proposed.

Problematical Issues of Functioning of the Environmental Tax in Ukraine

Problematical Issues of Functioning of the Environmental Tax in Ukraine

On increasing the degree of progressiveness of the income tax in Russia

Income tax fulfills not only fiscal, but also social and regulatory function in the economy. Currently, the main burden of paying income tax in Russia is borne by workers with low and middle incomes. In order to increase the social function of the income tax, it is necessary to continue reforming it in order to achieve greater progressiveness. The overall progressiveness of income tax depends on the structure of all tax categories, exemptions and deductions, and not only on the difference between the maximum and minimum rates. As shown in the article, Russian tax legislation does not provide for a lower income threshold that is exempt from income tax, and the amount of tax deductions for children does not provide meaningful support to families. When changing the parameters of income tax, an integrated approach is important, taking into account the possible consequences in the form of a drop in income of regions especially sensitive to this type of tax.

When Harmful Tax Expenditure Prevails over Environmental Tax: An Assessment on the 2014 Mexican Fiscal Reform

This article examines the role of environmental taxation in mitigating environmental problems and contributing to sustainability in Mexico. It focuses on environmental tax revenues and tax expenditures since the 2014 Public Financial Reform (PFR), according to pro- or anti-environmental orientation. The research carried out combines the study of the regulation of the selected tax instruments, their classification and the empirical analysis of the tax revenues and tax expenditures associated with the different taxes over the periods of validity of the taxes and benefits studied, using the databases of the CIAT and the Mexican SHCP. A critical analysis addresses the weak environmental function of environment-related taxes (IEPS, ISAN…), as well as the late implementation and reduced impact of the carbon and pesticide taxes introduced in 2014. The evolution of tax incentives and expenditure is thoroughly examined by examining both environmental measures, which have evolved positively but within a very reduced level, and the most prevalent tax expenditure measures, with harmful impacts to the environment. Based on the results obtained, long-term structural changes in the Mexican tax system are suggested. As for the short to medium term, profound changes in tax expenditure are proposed to eliminate of those tax benefits harmful to the environment, introduce of tax benefits for circular activities (e.g., repairing, reusing and remanufacturing) and broaden the carbon tax base and rates. The conclusions include recommendations for moving towards a systemic green tax reform that assists the transformation towards a sustainable economy.

THE GENESIS OF THE SOCIAL FUNCTION OF TAXES

The article is devoted to the substantiation of the existence of the social function of taxes. The relevance of the study is based on the fact that taxes levied on individuals should be simultaneously elements of the tax and social policy. The social function is identified, as a rule, only with the redistribution of income between rich and poor citizens. The study reveals other aspects of the social impact of taxes. The author not only gives a definition of the social function of the tax, but also reveals the mechanism of its implementation in foreign practice. In the course of the research, general methods of cognition and private scientific methods of cognition (tabular and graphical method) were used.

Desigualdad y sacrificio equitativo en la tributación por deciles de hogares en México

Tax functions are calculated with equitable sacrifice for aggregate federal taxes and for income tax to the added value and special on production and services separately using micro data from the National Survey of Household Income and Expenditure for 2018. Although there are differences in magnitude between the inequality aversion coefficient for IT, VAT and STPS taxes in Mexico; the Mexican tax system does not currently follow the principle of equitable sacrifice. The results demonstrate that the coefficient of aversion to inequality is very high in Mexico, and this should be interpreted as the desire of society towards fairer taxation.

Taxation in Democratic Czechoslovakia and the Independent Czech Republic

The taxation system in communist Czechoslovakia was based on the redistributive, regulative, and fiscal functions of taxes. After the Velvet Revolution in November 1989, it was crucial for the economy and economic development to change the tax system. To achieve this, new politicians decided for the slower transformation of Czechoslovakian tax law. Most of the tax acts that were valid in socialist Czechoslovakia remained in force after the Velvet Revolution; however, they were amended in 1990 with regard to the aim of the tax reform being prepared for 1993. In August 1992, the decision to split Czechoslovakia was announced. It was more of a historical coincidence that the independent Czech Republic’s foundation in 1993 was connected with complex tax reform. The reform’s primary aims were the link between tax revenues and gross domestic product; tax justice and fair competition; possible foreign investments and general openness to the European and international markets; elasticity and effectiveness of the tax system; and reduction of social criteria in taxation. The tax reform of 1993 in the Czech Republic is one of the most complex tax reforms globally. Most of the acts adopted at the end of 1992 are still effective. This article aims to introduce the developments in terms of taxation in democratic Czechoslovakia and the independent Czech Republic to international readers. Tax system, tax reform, Czechoslovakia, Czech Republic, Velvet Revolution, nullum tributum sine lege, income tax, property tax, VAT.

Mechanism Design for Demand Management in Energy Communities

We consider a demand management problem in an energy community, in which several users obtain energy from an external organization such as an energy company and pay for the energy according to pre-specified prices that consist of a time-dependent price per unit of energy as well as a separate price for peak demand. Since users’ utilities are their private information, which they may not be willing to share, a mediator, known as the planner, is introduced to help optimize the overall satisfaction of the community (total utility minus total payments) by mechanism design. A mechanism consists of a message space, a tax/subsidy, and an allocation function for each user. Each user reports a message chosen from her own message space, then receives some amount of energy determined by the allocation function, and pays the tax specified by the tax function. A desirable mechanism induces a game, the Nash equilibria (NE), of which results in an allocation that coincides with the optimal allocation for the community. As a starting point, we design a mechanism for the energy community with desirable properties such as full implementation, strong budget balance and individual rationality for both users and the planner. We then modify this baseline mechanism for communities where message exchanges are allowed only within neighborhoods, and consequently, the tax/subsidy and allocation functions of each user are only determined by the messages from their neighbors. All of the desirable properties of the baseline mechanism are preserved in the distributed mechanism. Finally, we present a learning algorithm for the baseline mechanism, based on projected gradient descent, that is guaranteed to converge to the NE of the induced game.

DETERMINANTS OF TAX CAPACITY AND TAX EFFORT IN SOUTHERN AFRICA: AN EMPIRICAL ANALYSIS

ABSTRACT Literature posits that numerous economic and institutional factors limit the amount of taxes that a country can raise. Against this background, the substantive aim of this study was to assess the determinants of tax capacity and tax effort in the SADC. A multi-step procedure was followed to estimate determinants of tax capacity and tax effort using stochastic tax function and unbalanced panel data for 13 SADC countries.1 1 The SADC countries included Angola, Botswana, Eswatini, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Tanzania, Zambia and Zimbabwe. The study disentangled the error term to estimate the random effects separately from tax effort to capture the time-invariant country-specific effects. Further, tax effort was classified as persistent (long-run) and transient (short-run). The study was able to estimate the determinants of tax effort and to rank each member state or country according to its tax effort. The quantitative analysis indicate that financial deepening, economic development and trade openness influence tax capacity, while corruption and inflation influence tax effort. The SADC region has low persistent tax effort, implying that improving tax administration has superseded tax policy reforms. This result is augmented by the fact that tax legislation efforts were largely successful in tax administration but rather limited given tax policy.

Types and Functions of Taxes in a Market Economy

The purpose of this article is to explain the role and importance of taxes in a market economy based on economic analysis. There are also economic considerations about the types of taxes, and the importance of the functions of taxes in today’s market economy has been scientifically demonstrated. The role of taxes and types of taxes in the regulation of the economy, the results of economic measures taken to introduce taxes in the economic growth of the country are presented in statistics. Through an in-depth analysis of the role of tax functions in the economy, we can identify them as a key factor in ensuring the country's budget. The large-scale work carried out in our country to ensure greater transparency of tax policy determines the relevance of this sector for today's market economy.

Бюджетна ефективність податкового стимулювання інноваційної діяльності

The article is devoted to the topical issues of determining the budget effectiveness of the use of tax incentives for innovation. The conceptual difference between “budgetary effect” and “budget efficiency” has been defined. A reasonable criterion of the budgetary effect, which is proposed to calculate as the difference between financial results of innovation and expenditures (temporary budget losses) to stimulate innovation. The method of justifying the budgetary effect of tax incentives for innovation by applying an increased standard of write-offs on the cost of spending on scientific and scientific and technical works has been proposed. The proposed methodology uses a recursive model for calculating tax revenues starting with the development of innovative products, which occurs as a result of the reinvestment by the subject of innovation in the first stage – savings from tax cuts, in the second and subsequent stages – the said savings and part of the increase in profits. The increments of investment resources of the subject of innovation and budget revenues are determined taking into account the factor of time of their receipt by the method of discounting. The budgetary effect is proposed to assess during the regulatory period of return on investment. The article contains a logical illustration of the recursive model of tax revenues and the calculation formula. Based on the data of the innovative enterprise, the indicators of the budget effect, the internal rate of budget revenue and the payback period of its losses, which arise due to the introduction of an increased rate of write-off for the cost of scientific and scientific-technical works have been calculated . It is recommended when making decisions on the feasibility of tax incentives for innovation to take into account the stimulating function of taxes, which is manifested in increased motivation of entrepreneurs to innovate. Keywords: taxes, tax policy, innovation, budget efficiency.

Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive

Background and aimsDespite the European Union (EU) Tobacco Tax Directive (TTD), a lack of convergence in EU tobacco prices promotes high levels of cross-border shopping and down-trading from factory-made (FM)...

Фискальные функции воеводской канцелярии Прикамья в 1720–1780-х годах

Introduction. The article discusses the fiscal policy of the voivodship office of Prikamye in the 1720s – 1780s. The financial aspects of the activities of local institutions in the Russian state in the 18th century were considered by historians from different points of view (a poll tax reform, the impact of taxes on the development of economy, an increase in the arrears). The problem of the functioning of the voivodship office of Prikamye in the collection of tax arrears in this territory has not yet received consideration in historiography. Methods and materials. The problematic chronological method made it possible to identify the main problems in the process of implementing the fiscal functions of the voivodship power and administration and to trace them in dynamics. The method of comparative analysis was used when comparing the information on income books. Analysis. During the study period, the local office was experiencing a shortage of personnel and faced resistance from the local population in performing its tax functions. The author analyzed such methods of collecting taxes on core fees, such as sending decrees and reminders of debts, maintaining soldiers and staff to work with taxpayers in different parts of the study area, as well as pressure on worldly elected people to collect arrears. Results. Despite the shortage of personnel in the staff of the office, local governors actively collected taxes and arrears, and also participated in the increase in the number of taxpayers (recorded salary) and, accordingly, state revenues. Analyzing the materials of the funds of the Russian State Archive of Ancient Acts and the State Archive of Perm Region, the author of the article comes to the conclusion that the voivodship office of Prikamye effectively performed its fiscal functions as a whole.

Foreign experience in income taxation of companies

The subject of this research is the rules of corporate income taxation foreign countries existing in foreign countries, the experience of implementation of which is valuable for further development of the Russian legislation. The current state of tax systems is viewed from the perspective of implementation of the baisc tax functions: fiscal and regulatory. The importance of corporate profit taxation in formation of the income base of the budgets of the budgetary system of the Russian Federation justifies special attention to the existing mechanisms for distinguishing tax revenues between budgets of bot different levels and same level. In the context of state regulation of the economy, analysis is conducted on the tax incentive instruments and preferential tax conditions intended for stimulating innovative activity of the companies. The scientific novelty lies in summarizing the experience of foreign countries in corporate income taxation, determining the leading  practices, and formulating recommendations for their implementation in Russia. The conducted research reveals the trends in reforming tax legislation of the developed countries aimed at stimulation of entrepreneurial activity. Sustained reduction in corporate income tax rates, shift away from progressive scale, and implementation of new tax incentives contribute to lowering of fiscal burden on businesses and create favorable conditions for the economic development. The author develops recommendations for the improvement of corporate profit taxation in the Russian Federation: 1) For increasing the validity of division of tax revenues between regional budgets, it is suggested to change the procedure for calculating the tax payable by separate banks units. In calculation of the share of taxable profit for each bank unit, it is recommended to take into account labor costs, amount of loans issued and deposits raised. 2) The comparative analysis of the Russian and foreign experience of tax incentives demonstrated the shortage of instruments intended for commercialization of innovations in the Russian Federation, which substantiates the need for implementation of preferential taxation of income from use of the objects of intellectual property.

RETROSPECTIVE ANALYSIS OF THE TAX SYSTEM REFORM OF UKRAINE

Abstract. The article analyzes the historical periods of development of the taxation system in Soviet times and during the independence of Ukraine. The stages of transformation of the country’s taxation system and the deduction of the development of the national taxation system are outlined. It was found that during the years of independence there were five transformations of the tax system in 1991, 1995, 1999, 2011 and 2015, respectively. The preconditions of each of the specified stages of realization of transformation of system of the taxation are analyzed. Among the key preconditions for transformational changes in certain periods are: rapid deterioration of key macroeconomic indicators, implementation of laws and regulations on the establishment of the tax police and the transformation of the State Tax Administration into a central executive body as a controlling body for legal entities and individuals, changes in the composition and mechanisms of tax calculation, chaos and invalidity of the system of tax benefits, changes in the legalization of the wage fund and in the system of compulsory state social insurance. The functions of taxes as defining concepts of formation of the tax system of the country that were in each period defined above are investigated. The types and role of tax relief as a tool of state tax regulation and stimulation of socio-economic processes are considered. The assessment of the process of transformation of the tax system identified the existing criteria for reform, including diversity, complementarity and consistency, compromise and evolution, the depth of transformation and innovation of the tax system of Ukraine. It is proved that the tools of transformation of the implementation of the taxation system of Ukraine used in these processes did not always correspond to the peculiarities of the socio-economic situation of the country and the tax policy of the state goal and set of tasks of economic strategy. Existing shortcomings in the Ukrainian taxation system hinder economic growth and lead to high economic shadowing. Thus, the application of these tools in the process of transformation of the tax system has partially solved the existing problems, a significant number of identified tasks currently remain unresolved. Keywords: taxation system, taxes, tax deductions, the state budget, taxation. JEL Classification E62 Formulas: 0; fig.: 0; tabl.: 1; bibl.: 18.

ОПОДАТКУВАННЯ ВІТЧИЗНЯНИХ СІЛЬСЬКОГОСПОДАРСЬКИХ ТОВАРОВИРОБНИКІВ: ОСОБЛИВОСТІ, ПРОБЛЕМИ I ПЕРСПЕКТИВИ

Анотація. Проаналізовано рівень, динаміку і структуру податкових надходжень від сільськогосподарських товаровиробників за видами економічної діяльності підгалузей АПК i видами податків. Доведено, що сільськогосподарські товаровиробники є тими суб’єктами господарювання, які формують податкову базу доходів місцевих бюджетів. Найвагомішими серед податкових платежів сільськогосподарських товаровиробників є три податки (податок на доходи фізичних осіб, податок на майно та єдиний податок). Тому, розробляючи напрями вдосконалення оподаткування сільськогосподарських товаро­виробників, основну увагу варто зосередити на таких факторах, як земельні ресурси і додана вартість як об’єктах оподаткування, оскільки відносно трудових ресурсів та їхніх доходів сільськогосподарські товаровиробники виступають фактично лише податковими агентами. Досліджено особливості оподаткування сільськогосподарських підприємств України за загальною системою і спрощеною системою оподаткування у формі єдиного податку IV групи на сучасному етапі. Надано критичну оцінку наявних критеріїв, об’єктів і бази оподаткування для платників IV групи єдиного податку щодо відповідності ідеям створення спрощеної системи оподаткування. Визначено переваги і недоліки функціонування єдиного податку IV групи і запропоновано шляхи вдосконалення механізму справляння податків з агропідприємств для створення сприятливого податкового середовища. Такі заходи мають суттєво вплинути на діяльність сільськогосподарських виробників, зміцнити їхні позиції на ринку і посилити їхню конкурентоздатність. Реалізація розроблених заходів дасть змогу підвищити ефективність системи оподаткування сільськогосподарських підприємств, посилити регулятивну функцію податків і наповнюваність місцевих бюджетів, створити сприятливий клімат для впровадження інновацій і залучення інвестицій. Ключові слова: сільськогосподарські товаровиробники, оподаткування, податки, переваги, недоліки, удосконалення, заходи. Формул: 0; рис.: 1; табл.: 4; бібл.: 11.

WEALTH: THE ECONOMIC PREREQUISITES OF TAXATION

The purpose of the paper is to study the economic issues of wealth, which is the rationale and basis for the introduction of a wealth tax. This is due to current sustainable trends in wealth growth and an increase in the number of wealthy individuals. The aim is to determine the economic content, preconditions for the emergence and spread of wealth, to reflect the historical aspects of the development of wealth and its current state, to determine market conditions for the availability of wealth. At the same time, the goal is also the economic justification of wealth from the standpoint of the possibilities of its taxation. The topic of the article is due to the need to reveal the modern market infrastructure for the formation and growth of wealth, its economic status in the context of tax opportunities. In this regard, the economic essence of wealth as a potential subject of taxation is considered, the specifics of the functioning of the wealth tax in a market economy, the most important features of the functioning of the wealth tax are determined. Methodology. Economically adequate and objective justification of wealth in terms of the effectiveness of market conditions for its formation and growth allows us to assess the effectiveness of the economic system and the possibilities of public policy in the context of its taxation. This partially ensures the redistribution of public revenues, public goods and wealth. The survey is based on a theoretical generalization and analysis of empirical data on the market economy, wealth generation and its taxation. Results. The issue of wealth and its economic nature is studied. The importance of wealth for society and the state is determined. The economic specifics of wealth for its taxation are substantiated. Practical implications. Market requirements and opportunities for the formation and increase of wealth are studied. Adequate assessment of the preconditions for taxation is carried out. On this basis, the content of the wealth tax and the preconditions for its introduction are studied. The specifics of the functioning of the wealth tax in a market socially oriented economy are considered. Wealth taxation is considered from the standpoint of economic, social and fiscal efficiency. Value/originality. It was found that wealth – a comprehensive, multi-faceted category, which can be characterized as a specific feature of the socio-economic structure of society, which determines its condition, results, dynamics and development tendencies. Wealth characterizes the ability to achieve a positive result in market conditions of managing and using the existing social and economic potential in the community, as evidenced by its level of civilization development. The peculiarities of the functioning of the wealth tax in different countries of the world are considered. The using of the wealth tax as a fiscal instrument in the state tax system is suggested.

Preference responsibility versus poverty reduction in the taxation of labor incomes

We study the tax schemes that maximize social welfare functions built on axioms of responsibility for one’s preferences (the requirement that the social welfare function should treat identically agents with the same wage, independently of their preferences) and poverty reduction. We find zero and negative marginal tax rates on low incomes at the optimum and bunching at the income level of the most hardworking minimum wage households. When preferences are iso-elastic, we derive the optimal tax formula, which we calibrate to the US economy. Our formula approximates the shape of the current US tax function for households with at least one child. This result suggests that a fairness-based approach, and these axioms in particular, can help close the gap between the recommendations of optimal tax theory and actual policies.

The Effect of Understanding Taxation Regulations, Tax Rates, Tax Sanctions, Tax Socialization, Fiscus Services and Online Services on The Level of Compliance with MSME Taxpayers

The tax function is very important for development. The largest contributor to state income is taxes. MSMEs is a business group with a sizeable number in Indonesia. The large number of MSMEs actors has made the Government pay serious attention to the development of MSMEs. This study aims to examine the effect of understanding tax regulations, tax rates, tax sanctions, tax socialization, tax services and online services on the level of compliance of general public taxpayers. The population in this study is MSMEs in Cilegon. The sample of this research is MSMEs in Cilegon. The research methodology stage began by collecting data through distributing questionnaires to MSMEs actors in the Cilegon area, followed by data analysis. This research data is primary, the data were analyzed using validity and reliability tests and multiple linear regression.