Tax Instruments Research Articles

O EMPREGO DE INSTRUMENTOS FINANCEIROS E TRIBUTÁRIOS E O PRINCÍPIO DA NEUTRALIDADE TRIBUTÁRIA

The study aims to reexamine the use of financial and tax instruments in social and economic regulation and its relation to the tax neutrality principle.

Nothing special about an allowance for corporate equity: Evidence from Italian banks

This paper analyzes the impact of reduced tax incentives for equity financing on banks' regulatory capital ratios under the Basel III regime. We are particularly interested in a recent interest rate cut in the Italian corporate equity allowance, which reduces the relative tax advantage of equity financing. The results show that banks respond to this increased tax disparity by significantly reducing their regulatory capital while at the same time reducing their risk-taking. The decline in capital is more pronounced for small banks and outweighs the initial capital gains from the introduction of this tax instrument. Our results challenge the use of equity allowances, in that financial stability gains persist only as long as costly tax subsidies remain intact and diminish as the size of the subsidy is reduced.

State Regulation of Investment Growth and Renewal of Fixed Assets: Applicable Tax Instruments

State Regulation of Investment Growth and Renewal of Fixed Assets: Applicable Tax Instruments

Analysis of Value Added Tax Revenue in Indonesia from 1990 to 2022

In enhancing welfare and advancing Indonesia, the government plays a crucial role in promoting economic cooperation and implementing effective fiscal regulations, one of which is through optimizing revenue from the taxation sector. Value Added Tax (VAT) is a key tax instrument that serves as an important source of state revenue. As a significant tax instrument, VAT revenue plays several crucial roles, including supporting the state's fiscal revenue, funding infrastructure development, and providing public services. Therefore, this study aims to analyze the factors influencing VAT revenue in Indonesia. This research uses time series data covering the period from 1990 to 2022. The analytical method employed is the ECM (Error Correction Model) analysis to examine both long-run and short-run effects. The independent variables used in this study include Government Consumption, C-Efficiency, and Import Tariffs. Meanwhile, the dependent variable is VAT revenue in Indonesia. The results of this study show that government consumption and C-efficiency has a positive and significant impact on VAT revenue in both the long-run and short-run. Meanwhile, the import tariff variable negatively and significantly impacts long- run revenue, but has no effect in the short run.

Fiscal Tools for Promoting Efficient Economic Growth

Contemporary crisis phenomena, including financial, structural, political, and social aspects, underscore the need for effective fiscal policy to ensure the resilience and development of the country. Additionally, there are currently complex challenges related to the war, such as infrastructure destruction, business shutdowns, and mass migration, which have significantly impacted the country’s economy and require additional financial resources for recovery. This situation necessitates the search for new sources of income and the optimisation of existing resources, highlighting the importance of effective tax regulation to overcome economic challenges during conflict. This scientific article aims to determine the role of fiscal policy in ensuring effective economic development, as well as the importance of tax instruments and their efficiency in promoting economic growth and optimising financial resources. In the research process, literary sources were analysed, and statistical data was scrutinised to evaluate the dynamics of state revenues and expenditures and the impact of tax receipts on the state budget. The study emphasises the importance of tax instruments for economic development and meeting the country’s financial needs. The efficient use of tax instruments facilitates the collection of sufficient revenues to fund social and economic needs. The study highlights the importance of employing the necessary tax instruments to ensure the country’s effective economic development. In martial law conditions, mobilising fiscal reserves and activating tax instruments become critical strategies for ensuring financial stability and supporting the economy. However, the successful implementation of these measures requires the improvement of the organisational structure and administration. A balanced approach to tax burden, a conducive environment for business, and the development of new revenue sources are critical in ensuring financial stability and supporting economic growth during conflict.

Path to Green Economy: Analyzing Innovation, Investment and Taxation in Kazakhstan

The concept of a green economy has gained significant attention, aiming to achieve sustainable development without environmental harm. This study examines Kazakhstan's transition to a green economy, focusing on indicators such as green innovation, investment in environmental protection, and green taxes. Despite Kazakhstan's commitment to a carbon-neutral economy by 2060, significant challenges were identified. The methodology involved three steps: descriptive analysis of green economy indicators for 2016–2022, correlation analysis to identify significant relationships, and trend forecasting for 2023–2025 using a linear regression model. This approach provided a thorough examination of the green economy's current state and future projections. Over the study period, the number of organizations engaged in environmental innovation and their activity levels have decreased. Investments in environmental protection showed initial growth, but declined in recent years. Conversely, there has been an increase in environmental taxes, reflecting the government’s focus on tax instruments to promote sustainable development. Correlation analysis revealed complex interdependencies, indicating that higher investments and taxes are often associated with lower levels of green innovation activity. Projections for 2023-2025 suggest a further decline in green innovation indicators unless significant policy measures are taken. The study underscores the need for a balanced approach that encourages green innovation while maintaining robust investment and tax bases.

Taxation and Income Inequality in ASEAN Countries

Research Originality: This study contributes to literature by investigating the impact of taxation on income inequality, with a specific focus on Southeast Asian countries.Research Objectives: To investigate the impact of taxation on income inequality in Association of Southeast Asian Nations (ASEAN) countries.Research Methods: A panel data model focusing on ASEAN from 1998 to 2021 was used, and a two-stage least squares (2SLS) estimation method, incorporating fixed effects and instrumental variables was used. Tax instrument comprised two components, namely tax ratio, reflecting volume of tax; and tax structure, representing direct, indirect, and income taxes.Empirical Results: The results showed that tax ratio, direct tax, and income tax reduced income inequality in Southeast Asia. However, the magnitude of the impact should be more significant. Prioritizing education and improving the quality of workforce could effectively reduce income inequality, as shown by Singapore's success in this area.Implications: This study had significant implications for ASEAN policymakers, as it offered valuable insights into designing and implementing taxation policies to reduce income inequality and promote economic development across the region. JEL Classification: D63, H20, H23How to Cite:Alexander, A., Gitaharie, B. Y. (2024). Taxation and Income Inequality in ASEAN Countries. Etikonomi, 23(1), 397 – 414. https://doi.org/10.15408/etk.v23i2.32352.

The relationship of tax instruments and performance indicators of companies to ensure the environmental component of sustainable development in Russia

The article lists the categories that can be considered as taxation instruments. It is proposed to regard tax burden as the main instrument of tax policy for realising sustainable development of the country. It is concluded that in practice the consequences of its increase and decrease can be difficult to predict. One of the reasons lies in the fact that financial decisions of companies are influenced not so much by the size of the tax burden as by the change in profitability provoked by it. The comparison of the tax burden and profitability indicators for all sectors of the Russian economy has been conducted. The correlation of the profitability (profitability of goods sold and profitability of assets) and the tax burden indicators by industries of the Russian economy has been calculated. The results are ambiguous: it is concluded that there is no connection between the environmental friendliness of the type of activity and the interdependence between the industry indicators of the tax burden and profitability. It has been found that not only the tax burden, but also the level of profitability are differentiated by industry. The classification of economic activities by the degree of environmental friendliness is proposed: directly affecting the environment, associated with the impact on it, associated with indicators of environmental safety, activities that have no direct connection with the environment.

Ensuring the Effectiveness of Tax Instruments in the Management of Public Finances of the Region

The article analyzes the main trends in the transformation of the tax parameters of the region using the example of the Republic of Bashkortostan. Key factors determining the dynamics of tax revenues to the consolidated budget of the region and the total tax burden in the republic are identified, the financial stability of the consolidated budget of the Republic of Bashkortostan is assessed. The article proposes the main directions for increasing the effectiveness of tax mechanisms in the region, taking into account the principles and criteria for ensuring the effectiveness of regional public finance management. В статье проводится анализ основных тенденций трансформации налоговых параметров региона на примере Республики Башкортостан. Выявляются ключевые факторы, определяющие динамику налоговых поступлений в консолидированный бюджет региона и совокупной налоговой нагрузки в республике, проводится оценка финансовой устойчивости консолидированного бюджета Республики Башкортостан. В статье предлагаются основные направления повышения результативности налоговых механизмов в регионе с учетом принципов и критериев обеспечения результативности управления региональными общественными финансами.

Correction to: Unemployment and endogenous choice on tax instruments in a tax competition model: unit tax versus ad valorem tax

Correction to: Unemployment and endogenous choice on tax instruments in a tax competition model: unit tax versus ad valorem tax

Impact of tax policy on the development of agrarian enterprises and organisations

The purpose of this study was to analyse the role of tax policy in the agricultural sector to determine its impact on innovative development, investment decisions, and competitiveness of enterprises in this area. The study performed a comparative analysis of various aspects of tax regulation, review of taxation instruments, consideration of special tax regimes in such countries as the USA, Germany, France, Spain, Poland, and Kyrgyzstan. The study investigated various aspects of tax regulation that have direct and indirect impact on the functioning of the agricultural sector. The role of tax policy in stimulating investment and development in agriculture by providing tax incentives and subsidies for investment in innovative technologies, process mechanisation, and research was examined. Special tax regimes aimed at supporting agricultural enterprises were analysed, and examples of tax policies in different countries, including the USA, the European Union, China, India, and Kyrgyzstan, were provided. The state of agricultural development in Kyrgyzstan was reviewed, and the main challenges, government support measures, and the main land tax rates across the country were identified. The key point was to develop recommendations for improving the tax system to stimulate agricultural development derived from the synthesis method. This involves the introduction of tax exemptions and investment incentives, differentiation of tax rates depending on segments and regions of agriculture, stakeholder consultations, simplification of tax administration, and attraction of foreign investment through special tax regimes. Concrete examples were also given of large agricultural enterprises in different countries where improved tax policies can contribute to the development and efficiency of their operations

Особенности налогообложения разработки минерально-сырьевых ресурсов: мировой и отечественный опыты

Building a balanced system for obtaining a fair share of resource rents is one of the central objectives for the governments in the countries, rich in mineral resources. The special attention is paid to the high-margin projects on extraction of the hydrocarbon raw materials. Thus, the state share in the exploitation of its natural resources includes a variety of components, type and scope of which are determined by the specific conditions of a mining project. The article reviews the main tax instruments used in development of the mineral deposits, also considers the main trends in development of the international tax systems and their reflection in the Russian practice. It is shown that the main directions of the fiscal policy include simplification and striving for simplicity of administration, transparency in contracts between investors and governments, focus on transfer price issues, transition from gross royalties to taxation of economic results. Peculiarities of the budget policy in Russia determine development of agreements between the governments of the mining regions and mining companies aimed at the infrastructure and social facilities development, as a form of indirect natural rents for the development of the territories and local communities.

Fiscal revenue mobilization and digitally traded products: Taxing at the border or behind it?

The unprecedented growth of trade in digitized products has been underpinned by the World Trade Organization (WTO) moratorium on customs duties on electronic transmission, which effectively guarantees the tariff-free nature of this trade. Some countries fear that the current rules inefficiently constrain their policy space and hurt their revenue potential, and have argued for scrapping the moratorium. We examine the optimal role for domestic and border tax instruments in this context. We show that, independently of the future trajectory of trade in digitized products, broad-based nondiscriminatory value-added taxes are preferrable to tariffs both from an economic efficiency and from a revenue standpoint. These taxes are also easier to implement and administer. In this context, the moratorium is a valuable commitment device which can help to effectively channel developing countries’ tax reform efforts in a more efficient direction. This transition would require further investment by the global community in modernizing the tax and customs infrastructure of developing countries to adequately meet revenue needs in the digital era.

Prospects for the use of preferential taxation of individuals to achieve environmental sustainability in Russia

Within the framework of this article, the issue of achieving sustainable development goals is problematized, special attention is paid to the study of the possibilities of preferential taxation to ensure environmentally responsible behavior of individuals, as a significant facet of a proactive approach to solving environmental problems. The importance of the participation of the state and society in achieving the goal through the provision of tax preferences is emphasized. To achieve this goal, the following tasks were solved: the place of environmental responsibility in the system of general responsibility of individuals was studied; the role and methods of the state in the system of encouraging environmentally responsible behavior and consumption of the population are outlined; An assessment is made of the prospects for the use of environmental preferences in the taxation system for individuals. The study revealed that at the same time, environmental tax instruments are practically not used in Russia at the moment. Directions for the development of environmental tax preferences are proposed through the dissemination of the practice of applying zero tax rates for transport taxes, the introduction of environmental tax deductions, and the adjustment of investment tax deductions for taxes for individuals.

Monitoring of the BEPs actions plan implementation in the context of fiscal regulation: scientific substantiation of the methodology

Since January 2017, Ukraine has joined the OECD's Inclusive Framework and committed itself to implementing the BEPS Minimum Standard. The national tax system is similar in structure to the tax systems of developed countries. At the same time, the country's recognition of generally accepted standards for combating aggressive tax planning requires significant adaptation of the legal framework. Monitoring of the legislative process of implementing the BEPS Action Plan is an important area of further development of state regulation in the tax area and an effective means of achieving the proper quality of tax legislation and creating a modern and efficient tax system. The regulatory assessment of the state of national legislation will facilitate a detailed understanding and analysis of possible positive effects, achievement of results in the fight against tax evasion and base erosion, and avoidance of legal conflicts and contradictions. Monitoring the legislative process of implementing the BEPS Action Plan measures allows us to identify the necessary areas for improving the national legislative system and track the positive and negative effects of the application of legislative norms. Monitoring of regulatory legal acts is a tool for the development of future-oriented legislation, as it involves the study of legislation to obtain information necessary for assessing, forecasting, controlling and formulating recommendations for improving the regulatory framework and ensuring its optimal condition. As a member of the OECD Inclusive Framework, Ukraine has implemented the BEPS Action Plan Minimum Standard through significant adaptation of the national tax legislation and its approximation to the provisions of international tax instruments. Monitoring of the legislative process of implementing the BEPS Action Plan is an important area of development of state regulation in the tax area and an effective means of achieving the proper quality of national tax legislation and further development of an effective tax system.

TAX REVENUE OF THE BUDGETS OF TERRITORIAL COMMUNITIES OF THE REGION

The article examines both theoretical and practical aspects of forming the budgets of regional territorial communities, highlighting that local budgets are primarily composed of tax revenues. Due to decentralisation processes in Ukraine, territorial communities have been consolidated, making the united territorial communities the primary units of local self-government. Consequently, the mechanisms for forming these budgets have evolved, with tax revenues becoming the main financial resource for local governments, enabling them to fund their functions. The article emphasises that the approaches to forming local budget revenues have changed significantly under martial law, with many financial laws being amended. The article analyses the changes to the legislation that affected the formation of local budgets' tax revenues in martial law conditions. It analyses legislative changes that have impacted the formation of local budget tax revenues during this period. A comparative analysis is provided, focusing on the formation of tax revenues for local budgets in the Odesa region before and after the imposition of martial law. This includes examining the main national and local taxes contributing to these budgets. The article specifically highlights the tax revenues of the territorial communities in the Odesa region, demonstrating how these revenues have fluctuated in recent years. As a result of the conducted analysis, it was established that since the beginning of the war, income from most tax revenues has decreased. The main factors of influence on the change in tax revenues of the budgets of territorial communities of the region under martial law conditions are substantiated. The paper reveals that most tax revenue streams have decreased since the onset of the war. It explores the key factors influencing these changes and the primary reasons for the region's decline in local budget revenues. The article underscores the necessity for new approaches to forming local budget tax revenues, emphasising the need to address taxation issues and effectively utilise budgetary and tax instruments.

Can policy instruments enhance the benefits of nature-based solutions and curb green gentrification? The case of Genova, Italy

New policy solutions are necessary to make cities more liveable in a future that will be hampered by climate change, urbanization, landscape fragmentation and overall overexploitation of limited resources and space. There is an aspiration to continue to integrate Nature-Based Solutions (NBS) into global agendas to cope with climate change and urbanization due to their multiple benefits and co-benefits. Nevertheless, socio-economic and especially negative impacts of NBS are rarely considered and integrated into policy literature. Hence, the objective of this study is to address this gap by simulating three different policy instruments to mitigate green gentrification and enhance the impact of co-designed NBS in Genova. For that purpose, the spatially explicit hedonic pricing simulation model SULD (Sustainable Urbanizing Landscape Development) was used to simulate a linearly decreasing property tax to high-income households, a property tax subsidy provided to low and middle-income households and a zoning buffer policy around the NBS implementation area. Results show that all policy instruments have the ability to curb green gentrification, however the property tax subsidy led to added urban expansion, fostering urban sprawl. Both the zoning buffer and the property tax had better overall socio-economic and land use impacts by curbing green gentrification, posing little impact on low-income households and maintaining urban contraction, even though this contraction was smaller for the property tax instrument. Hence, it can be concluded that a policy mix including information, planning and economic instruments may be most effective to enhance the impact and mitigate green gentrification of NBS.

Divisions among the poor: A survey experiment of tax preferences in liberalizing Brazil

Despite globalization’s distributional impacts, we know little about (potentially differential) tax preferences of trade winners and losers, especially within social classes. We assess tax burden preferences to sustain public good provision using a vignette experiment with randomized tax instruments in the context of a liberalizing economy. More specifically, we analyze data from an original, randomized household survey of 1008 individuals in Sao Paulo State, Brazil, in 2019. We study preferences for increases in personal income, value-added, or corporate income taxes to improve funding for the universal health care system after Brazil adopts its free trade deal with the European Union. Findings reveal that the trade-losing poor support progressive taxes, whereas the trade-winning poor favor regressive instruments. By dividing the poor, globalization may create a barrier against more progressive fiscal strategies in emerging economies.

Impact of real property tax tools of Sulu Provincial Assessor’s Office: employees’ perspectives

The effect that real property tax instruments at the Sulu Provincial Assessor's office have on Sulu local government entities is the subject of this study. One hundred respondents were included in the study; most were middle-aged (26–39), with over half of them being employed full-time. Employees were highly in agreement about these technologies' efficacy, according to the survey, with tax mapping activities and computerization through electronic methods obtaining "Strongly Agree" ratings. For the Schedule of Market Value category, on the other hand, the rating was "Agree," indicating a somewhat lower but still favorable opinion of the fairness and accuracy of property assessments. When the tools were categorized based on gender, age, or work position, the study also did not find any discernible variations in the degree of impact of the tools. When the data was sorted by duration of employment, there were notable distinctions, indicating that employees with varying tenures had differing perceptions. The study found that respondents, independent of demographic variables, had a higher degree of agreement about the perceived impact and effectiveness of different real property tax instruments. The study's conclusion emphasizes how crucial it is to take into account the various backgrounds and experiences of staff members when assessing how well the Sulu Provincial Assessor's office's real property tax tools work.

The Role of the Local Government in Fostering Entrepreneurship – Evidence from Municipalities in the Kraków Metropolitan Area

Abstract Subject and purpose of work The study was conducted in the municipalities of the Kraków Metropolitan Area. It aims to identify models for supporting local entrepreneurship and assess their effectiveness. The effectiveness of the models was evaluated by measuring the diversity and changes in the number of enterprises in the area. We also presented entrepreneurs’ opinions on their satisfaction with specific policies. Materials and methods: Secondary ( literature and statistical data) and primary data sources were used in the paper. The primary source was a survey among entrepreneurs. The survey research to assess the performance of entrepreneurship policy involved 21 municipalities. We apply a mixed-method approach here (comparative indicator analysis, cluster analysis and Kruskal-Wallis tests). Results: The research demonstrated that the policy involving entrepreneurship support through tax instruments (reduced local tax rates) does not contribute significantly to providing entrepreneurship-fostering conditions. The study revealed that the level of entrepreneurship may be affected more by the expenditure policy, such as the municipality’s efforts to establish special economic zones, organise training, establish business information points, etc. Conclusions: Local governments (LG) that are attractive to investors (such as easily available infrastructure and proximity to markets) should adopt high property-tax rates. The tax is undervalued in peri-urban municipalities (compared to property value) and does not burden the business. Second, LG should focus on hard projects. They should intensify spatial planning and land management to ensure space for business to grow. It will entail conflicts and balancing the needs of diverse social groups, but it must be done to stimulate local socioeconomic development.