Tax Measures Research Articles

The Fundamental Right to Fair and Equitable Treatment in the Cross-Border Recovery of Taxes within the EU: A Need for a Common Minimum Standard

This article examines the application of the EU fundamental rights protection standard in the context of cross-border recovery of taxes within the European Union. It argues that, when the Tax Recovery Directive is applicable, the standard of protection is adequate due to the principle of conforming interpretation requiring that secondary law is interpreted in line with primary law. However, we also contend that any fundamental rights violation at the level of the initial procedure for establishing the tax claim in the requesting Member State cannot be remedied whenever that procedure is in an area outside the scope of EU law (most of the direct tax measures). At the same time, the outcomes of such a procedure are subject to mutual recognition in other Member States. Therefore, and in order to strengthen the principle of mutual trust within the Union, the article proposes introducing a piece of secondary legislation that spells out a minimum standard of protection of taxpayers’ rights.

New Legislative Tool for Introducing EU-Wide Windfall Taxes

In this note, the authors describe and comment on the Commission’s proposal to introduce a new regulation implementing emergency measures with the aim of mitigating high energy prices and the risk of supply shortages in Europe, as agreed to by the European Council on 30 September 2022. The authors also examine the legal compatibility of the planned EU windfall tax measures, comparing them to the existing Hungarian windfall taxes.

The role of taxation measures in the management of harmful products, services, and practices in Iran: a qualitative study.

Levying a tax on harmful products, services, and practices can affect consumer choices, effectively preventing diseases and reducing health care costs. The goal of this study was to investigate the role of taxation as a powerful financial tool in the management of harmful products, services, and practices to maintain and improve public health and preserve the financial sustainability of the health care system. This qualitative study was conducted in 2020-2021. In order to collect information for this study, semi-structured interviews were conducted. Using purposive and snowball sampling methods, 38 managers, policymakers, economists, and key experts were interviewed. Data were analyzed using the content analysis method. The transcribed interviews were further imported into MAXQDA for classification, and relevant codes were extracted. In this study, 6 main themes and 19 subthemes were labeled. The main themes included 1) objectives, effects, and requirements of the taxation of harmful products, services, and practices, 2) definition, instances, elasticity, and grading of harmful products, services, and practices, 3) Problems in controlling harmful products, services, and practices, 4) controlling harmful products, services, and practices, 5) traffic violations and accidents, and social harms, and 6) tax revenue use and the share of health care. The effects of taxing harmful products include reduced access to these products, reduced demand for harmful products, and the promotion of public health. Harmful products, services, and practices have major health and financial implications for individuals, families, and society. To improve public health, the demand for these products and services can be controlled through taxation measures to push consumers toward less harmful alternatives.

Fiscal state aid law as a tool against harmful tax competition in the EU: déjà vu?

Abstract The theme of this article is the relationship between harmful tax competition measures and prohibited fiscal State aid. The aim of this article is to present a targeted examination of the use of State aid rules against national tax measures, eg tax schemes and tax rulings, following the adoption of the EU Code of Conduct for Business Taxation in 1997. The fiscal State aid decisions and judgments to be covered are divided into two parts: the first fiscal aid wave of the (early) 2000s and the second (ongoing) fiscal aid wave, which most notably includes the Apple, Fiat, Starbucks, and Amazon cases. It is argued that an important factor connecting the two fiscal State aid waves is the link they share with the EU’s fight against harmful tax competition.

Best Practices for Reducing the Informal Sector of the Economy Through Tax Measures

he article summarizes the key ideas reflected in the reports of international organizations, scientific literature, as well as the experience of foreign countries on the use of tax measures to reduce the size of the informal sector of the economy. The experience of different countries is used to illustrate the features of individual measures. The choice of countries is primarily related to the extent to which their experience is relevant for the purpose of analysis. Therefore, the authors are not li­mited to the OECD and CIS countries, but also consider the experience of other countries where the size of the informal sector of the economy is especially large and where legislators are making attempts to reduce the informal economy sector including the BRICS countries and Latin American countries. The study found that foreign countries have accumulated extensive tax tools to combat the «shadow» economy. The main one is to reduce the tax burden on economic entities in order to get out of the shadows. Promising directions of its improvement are formulated.

OPPORTUNITIES AND LIMITATIONS OF THE ACTIVITIES OF THE AUTHORIZED BODY TO INITIATE THE BANKRUPTCY OF A TAX DEBTOR

Purpose of the study. The article examines current trends and current problems of the activities of the Federal Tax Service of Russia in the status of an authorized body to initiate the bankruptcy of a tax debtor in order to recover tax debts. From the standpoint of the synthesis of theoretical approaches and arbitration practice, the prerequisites for initiating a bankruptcy case for a tax debtor have been studied; the research discloses groups of tax debtors to which it is advisable to apply measures to prevent bankruptcy and groups to which such measures are not applicable; the place of the mechanism of bankruptcy of the taxpayer in the general system of settlement of tax debts is shown; the main problems in initiating the bankruptcy of a tax debtor and measures taken by the authorized body to protect the interests of the Russian Federation as a creditor are identified on examples of the analysis of judicial practice in the processes of bankruptcy of legal entities. Conclusions. In the context of the development of forms and methods of pre-trial settlement of tax debts, the bankruptcy mechanism becomes an extreme measure of its settlement, which, in some cases, is an incentive for the tax debtor to move to the settlement agreement process before the introduction of the first bankruptcy procedure, and, in other cases, becomes an impulse for the authorized body to the formation and implementation of a well-thought-out constructive strategy and tactics for the effective implementation of the procedures used in bankruptcy cases of the debtor. The results of this study create the basis for the subsequent improvement of the organizational and economic mechanism of the activities of the authorized body for the protection of state interests in the bankruptcy of debtors.

Policy Forum: Tax Expenditures—Lessons from the Elimination of Ontario's Tuition and Education Tax Credits

Stanley Surrey and others have highlighted tax expenditures as being hidden forms of spending that can evade the type of analysis and scrutiny applied to direct spending programs, allowing inefficient and inequitable programs to persist. But there is only limited empirical evidence on differences in the persistence of similar programs in a tax measure compared to a direct spending form. The conversion of Ontario's education and tuition tax expenditures into a direct form of spending via the existing student aid program provides an interesting case study. As discussed in this article, although the tax credits had never been the subject of a value-for-money audit, the student aid program was reviewed in 2018 shortly after the changeover, to hearty criticism of its distributional effects despite its being less regressive than the tax credit versions. This led to substantial cuts in the program, in line with views on the persistence of tax expenditures.

Tax Planning Using Interest – An Organised Chaos for Those Interested

Taxation of interest is one of the most complex areas of tax in South Africa. Various provisions apply to interest, with some regulating the inclusion of interest in gross income, others allowing for the deductibility of interest incurred, others limiting the amount of interest that is deductible and yet others providing for anti-avoidance tax measures using interest. This makes tax planning using interest to be a technically intense exercise, time consuming and often costly. This article critically analyses the provisions applicable to interest and highlights the circumstances in which they apply as well as the results of their application. It also illustrates instances of the overlaps in the application of these provisions.

The Effect of Taxation on Dairy Processing Cooperatives in Morocco: A Qualitative Research

Being at the heart of the social and solidarity economy, cooperatives contribute greatly to the socio-economic development of countries. Moreover, this entity is not opposed to the realization of a lucrative activity, as the profits made are mainly devoted to their social finality. In addition, in order to fully ensure its socioeconomic function, the cooperative requires an institutional, legal and fiscal framework that guides and supports its activity, and also ensures its protection against commercial companies. However, following the growth of their activity, certain governments introduced a set of reframing the tax legislation, under the argument to establish tax fairness and to restore fair competition between cooperatives and lucrative businesses. Therefore, this submission to taxation has aroused reticence on the part of the cooperatives proclaiming that the public authorities have not taken into account their social contribution. Hence, these tax measures raise the question of their legitimacy and their effect on the growth of the cooperative’s activity, especially at the commercial, financial, and social levels. Thereby, to provide an answer to this problem, qualitative research was conducted to approach the effect of taxation on the growth of dairy processing cooperatives in Morocco.

A comparative study on the tax and fee reduction policies for sustainable development: Empirical analysis from the world’s three major economies in tackling COVID-19

The global COVID-19 epidemic in 2020 has caused a significant drop in many countries’ employment rates and economies. Numerous countries have implemented a number of tax and fee reduction policies in response to the COVID-19 epidemic. This essay analyzes the tax and fee policies and results of the three largest economies in the world—China, the United States, and Japan—in response to COVID-19 between 2020 and 2021. We will first compare the effects of tax and fee reduction policies horizontally across China, the US, and Japan. The second step is to compare the effects of tax and fee reduction policies. According to the study, China, the United States and Japan have each implemented separate tax and fee policies in response to COVID-19. The United States primarily provides corporate income tax, personal income tax relief, and increased social welfare and subsidies that reduce the tax burden of enterprises, stimulate the vitality of enterprises, increase the disposable income of residents, stimulate consumption, and thus promote economic growth; Japan primarily provides income tax, consumption tax and business tax relief to reduce the cost of consumption for residents, increase corporate profits and cash flow, restore economic growth and stabilize employment. China primarily provides tax relief for VAT, corporate income tax and social security funds. It indirectly lowers the selling price of products, reduces the operating costs of enterprises, increases personal disposable income, stimulates consumption, promotes the growth of business performance and plays a certain role in curbing inflation. Based on the empirical analysis of the impact of different tax and fee reduction policies on the economy and employment in China, the United States and Japan, it is of some relevance for other countries. Therefore, in response to COVID-19 or major emergencies, each country can formulate targeted tax and fee reduction measures based on its own national conditions to support economic growth and stable employment.

Is environmental tax an enabler of circularity: new insights from the unique database.

This paper provides answers to the question that the environmental tax enables the circular economy. By employing six diverse measures to reflect circularity (namely the amount of municipal waste, the number of circularity patents, the amount of circular material used, the rate of recycling waste, the rate of recycling biowaste, and the rate of recycling e-waste) and four measures of environmental tax (namely total environmental tax revenue, energy tax revenue, pollution and resource tax revenue, and transportation tax revenue) of European countries, our article provided a comprehensive analysis of the nexus between environmental tax and circularity performance. A panel-corrected standard errors (PCSE) model and a feasible generalized least square estimates (FGLS) model are employed to study this association, while the dynamic fixed effects (DFE) estimator is applied to the autoregressive distributed lag (ARDL) method to measure both the short-run and long-run effects. Our study reveals the heterogeneous effects of an environmental tax on circularity. Taxing on the energy sector, the polluted sector, and transportation stimulate the process of circularity. Notably, our estimation results reveal that environmental tax can enable European countries to transit to a circular economy, especially in the long term. Our findings are critical for economists and policymakers in using the tax as an effective tool to promote a country's circularity performance.

An inclusive trend study of techno-economic analysis of biofuel supply chains

Biofuels have gained much attention as a potentially sustainable alternative to fossil fuels to tackle climate change and energy scarcity. Hence, the increasing global interest in contributing to the biofuel supply chain (BSC), from biomass feedstock to biofuel production, has led to a huge amount of scientific production in recent years. In this vein, techno-economic analysis (TEA) of biofuel production to estimate total costs and revenues is highly important for transitioning towards a bioeconomy. This research aims to provide a comprehensive image of the body of knowledge in TEA evolution within the BSC domain. To this end, a systematic science mapping analysis, supported by a bibliometric analysis, is carried out on 1104 articles from 1986 to 2021. As a result, performance indicators of the scientific production within the target literature are presented to explain how this literature has evolved. Besides, thematic trends and conceptual structures of TEA of biofuel production are discovered. The results show that (i) biofuel production and consumption need promotion through tax measures and price subsidies, (ii) the development of cost-competitive algal biofuels has faced many challenges over recent years, and (iii) TEA of algal biofuels to identify commercial improvements and increase the economic feasibility is still lacking, which calls for more in-depth investigations. Consequently, current challenges and future perspectives of TEA in the BSC domain are rendered. The provided insights enable researchers and decision-makers involved in BSCs to (i) capture the most influential contributors to the field and (ii) identify major research hotspots and potential directions for further development.

Effect of cigarette prices on cigarette consumption in Ghana

IntroductionNoncommunicable diseases are on the rise globally, with tobacco consumption being a major risk factor. Reducing tobacco consumption is an important step towards reducing the incidence and prevalence of many noncommunicable diseases. Tax and price measures have been proposed as tobacco control tools. This study investigated the link between cigarette prices and cigarette consumption in Ghana. MethodsAnnual time series data for the period 1980–2016 were used. The data came from diverse sources, including WHO, World Bank, and tobacco industry documents. Dynamic Ordinary Least Squares (DOLS), cointegration techniques, and three-stage least squares (3SLS) were used to analyze the data. ResultsAfter controlling for education, income, and population growth, we estimated that the price elasticity of cigarette demand is between -0.35 and -0.52 and statistically significant at 1% level. In the short run, the price elasticity is -0.1. Another variable that significantly reduced cigarette consumption during the period was education, with an elasticity between -1.7 and -2.7. ConclusionCigarette demand in Ghana is influenced by cigarette prices and education. We conclude that tobacco taxes that significantly raise retail prices of cigarettes and higher education (including health education) will help reduce cigarette consumption.

Валютные эффекты применения налоговой политики

The article examines the Russian experience in the field of currency regulation and the instruments that affect the exchange rate of the Russian ruble in crisis conditions. It is justified that the dynamics of the Russian ruble exchange rate depends primarily on the influence of four factors: the state of the economy of the issuing country, state monetary and financial policies, price dynamics of international commodity markets, and instability of the global monetary and financial system. It was established that the Russian ruble exchange rate also depends on the volume of foreign currency purchases by the population; a tendency for an increase in demand for foreign currency on the part of the population during the expectations of the Russian Federation (RF) national currency devaluation with a decrease in world oil prices was revealed. Based on an analysis of the currency policy of the Russian Federation, the authors come to the conclusion that curbing the weakening of the Russian ruble in the face of a decrease in the supply of foreign currency in the domestic market is carried out mainly through foreign exchange interventions and offer additional measures aimed at reducing demand on foreign currency through the introduction of tax instruments. Such measures will reduce the dependence of the ruble exchange rate on the volume of foreign currency inflows into the country, which will increase the efficiency of the Russian monetary policy and, as a consequence, the stability of the Russian economy to external adverse factors. In addition, six additional effects were revealed from the implementation of the proposed tax measures, which will strengthen the financial system of Russia. The proposed tax instruments can be applied in other countries, and the resulting increased demand for precious metals affects the global financial system up to its substantial transformation.

Community-Based Tourism Management during the Coronavirus Pandemic along the Andaman Coast of Thailand

The spread of the coronavirus pandemic from the end of 2019 until the present has drastically changed the trends in the tourism service industry around the world, also in community-based tourism in Thailand. This qualitative research article aimed to explain community-based tourism management during the coronavirus pandemic and includes multiple case studies in five communities of five provinces (Phangnga, Phuket, Krabi, Trang, and Satun provinces) along the Andaman coast of Thailand, which creates an understanding of the characteristics of community-based tourism management for application in specific situations. The data were collected from January to March 2022 via online in-depth interviews and online focus group discussions, with ten key informants and community-based tourism entrepreneurs (two representatives from each). Then, the data were verified using triangulation and analyzed by using content analysis. The results revealed that the community-based tourism management in the Andaman coastal area of Thailand was based on the communities’ cultural and natural resources. The tourism operation during the coronavirus 2019 pandemic was focused on building confidence and safety for tourists, namely: 1) characteristics of vaccinated tourists entering the communities and preferred quality tourists; 2) communities’ readiness for receiving tourists — service staff was regularly checked for coronavirus, renovations were done, and tourism activities were designed to be appropriate in a pandemic situation; 3) public relations and communication of the communities’ good image were pursued; 4) community development sought to achieve the standard of the Thailand Safety and Health Administration; 5) a surveillance system was established to monitor community situations. However, recommendations based on this research are that the government should support community-based tourism operations through tax measures, financial projects allocated to the communities, and technology to promote tourism on various platforms. Results from this research can be applied to community-based tourism entrepreneurs, especially in other areas of Thailand.

Taxation of the Agricultural Sector in the System of Ukraine’s Economic Policy Implementation and its Digitalization

Introduction. The agricultural sector is a strategically important segment for ensuring the country's national security. New challenges rightly require appropriate responses. All means of regulating the state agrarian sector, first of all, should be aimed at ensuring its successful development and effective functioning. The development of the agrarian sector of Ukraine requires the solution of institutional problems of agrarian production Studying literary sources indicates that state economic policy is implemented, primarily, through the mechanisms of tax policy, which has notes permanent changes in recent years.
 Aim and tasks. The aim of this article is to research the taxation of the agricultural sector in the system of Ukraine’s economic policy implementation and its digitalization. A secondary aim would be to single out the advantages and disadvantages of the taxation system and to create recommendations on choosing a taxation system for subjects of the agrarian sector.
 Results. The taxation of the agricultural sector in the system of Ukraine’s economic policy implementation and its digitalization are researched. Such stages of legal regulation of agricultural protection tax relations as formation (establishment), relative permanence, reformation, and post-reformation (post-reform stage) are defined. The agricultural protection tax measures in terms of VAT taxation during the period are performed. The advantages and disadvantages of the taxation systems of agricultural sector entities are singled out. Recommendations on choosing a taxation system for subjects in the agrarian sector are formed. The structure of the "Manager" module in the program "BAS AGRO. Accounting" is shown.
 Conclusions. Each of the tax systems that can be used by subjects of the agrarian sector has its own advantages and disadvantages. It is necessary to take into account the conditions under which a specific enterprise operates. The performed analysis of the evolution of the tax legislation in terms of taxation of the agrarian sector indicates a reduction in agro-protective actions by the state. At the stages of formation (establishment) and relative permanence of legal regulation, the introduction and effective use of tax policy, in particular the fixed agricultural tax and the special VAT taxation regime, were observed. During the reform and post-reform stages, the agricultural protection measures outlined above, which were quite powerful and effective at the time, were significantly minimized. The actual adaptation of information technologies to the needs of agriculture is one of the best new technologies in the agricultural sector.

Reducing Sugar Intake in South Africa: Learnings from a Multilevel Policy Analysis on Diet and Noncommunicable Disease Prevention.

High sugar intake contributes to diet-related excess weight and obesity and is a key determinant for noncommunicable diseases (NCDs) in low- and middle-income countries (LMICs). The World Health Organization (WHO) gives specific advice on limiting sugar intake in adults and children. Yet, to what extent have policy ideas on sugar intake reduction originating at the global level found expression at lower levels of policymaking? A systematic policy document analysis identified policies issued at the African regional, South African national and Western Cape provincial levels between 2000 and 2020 using search terms related to sugar, sugar-sweetened beverages (SSBs), and NCDs. Forty-eight policy documents were included in the review, most were global and national policies and thus the focus of analysis. A policy transfer conceptual framework was applied. Global recommendations for effectively tackling unhealthy diets and NCDs advise implementing a mix of cost-effective policy options that employ a multisectoral approach. South African country-level policy action has followed the explicit global guidance, and ideas on reducing sugar intake have found expression in sectors outside of health, to a limited extent. As proposed in this paper, with the adoption of the SSB health tax and other policy measures, South Africa’s experience offers several learnings for other LMICs.

Country Note: Retroactive Taxation, Investor-State Dispute Settlement, and India: Life Comes a Full Circle

After amending the Income Tax Act (IT Act) in 2012 to impose taxes retroactively on indirect transfers involving non-residents, India recently nullified this law. Towards the end of 2020, two investor-state dispute settlement (ISDS) tribunals under the India-Netherlands and India- United Kingdom bilateral investment treaties (BITs) found India’s retroactive tax in breach of India’s BIT obligations. These arbitral defeats incited India to eliminate the infamous 2012 retroactive amendment to the tax laws. This article documents and analyses the sordid saga of nine long years by explaining the origin, evolution, and culmination of India’s retroactive tax misadventure. Considering the increasing number of instances for which foreign investors use the ISDS mechanism to challenge the host state’s sovereign taxation measures as BIT breaches, the ISDS rulings against India, especially by the tribunal in Cairn Energy v. India, assumes significance. A more comprehensive reading of the tribunal’s reasoning in Cairn Energy v. India elucidates that, while taxation measures are indeed an integral part of the state’s sovereign right to regulate, it has to be exercised reasonably and proportionately when furthering a public purpose. The exploitation of the power to tax disproportionately may prove to be detrimental to the state. India, retroactive tax, ISDS, BIT, Vodafone, Cairn

Article: Abuse of Law by a Member State When Designing a Tax Measure

When Member States design tax measures, they have to comply with EU law. In this article the question is discussed whether a Member State has the liberty to intentionally design a domestic rule so that it falls outside the scope of the freedom of capital and prevent scrutiny in respect of third states by the Court of Justice of the European Union (CJEU). This question is investigated by using two Dutch rules as a case study. The author argues that the legislature walks a thin line. On the one hand there is a risk that the legislature is circumventing the application of the fundamental freedoms in an abusive way while on the other hand using an arbitrary criterion in a rule to distinguish between comparable cases could lead to the conclusion that a Member State has implemented a selective tax measure and thus granted state aid. The author concludes that the Dutch liquidation loss rule infringes EU law. Abuse of law, Liquidation loss, Withholding tax, State aid, Sincere cooperation, Freedom of capital

Pillar Two – What Actions Should Banks Be Taking Now?

The concept underlying Pillar Two is relatively straightforward; a globally consistent 15% minimum tax regime. The reality is one of the most complex international tax measures ever implemented. Some of this complexity is driven by design and policy and it is important that banks are assessing the potential impact of the regime: this includes consideration of whether there is a risk of top-up tax as well as focussing on meeting reporting and compliance requirements.