Tax Penalties Research Articles

Tax Evasion and Company Survival: A Brazilian Case Study

Enterprises face significant growth and survival challenges in highly competitive markets. Many companies fail to meet their tax obligations, which deprives society of essential resources and often results in tax penalties. This article examines whether companies that receive tax fines for evasion have a longer or shorter life expectancy compared to those that consistently comply with tax regulations. To analyze survival rates, the Kaplan–Meier estimator and Cox regression model were applied, considering factors such company size, sector, location, and tax evasion fines. The study included data from 11,297 firms established in 2017, in Rio Grande do Sul, Brazil. The findings indicate that companies fined for tax evasion had a higher survival rate (69%) compared to those without fines (38%) by 2023. This suggests that fines might serve as a corrective measure, helping companies realign and improve their chances of survival. Additionally, the study shows that medium-sized enterprises face significant challenges, possibly due to exceeding the limits of a simplified tax regime. This study highlights the importance of continued research across different regions and countries to validate these findings and enhance tax administration strategies.

Leveraging AI-Driven financial literacy and tax compliance solutions to foster economic growth in underserved communities and small businesses

Underserved communities and small businesses face significant challenges in financial literacy and tax compliance, both of which are critical to economic stability and growth. Limited access to financial education and the complexities of tax systems create barriers that hinder these groups from fully participating in the formal economy. This review explores the potential of leveraging artificial intelligence (AI) to address these challenges by providing innovative solutions that enhance financial literacy and simplify tax compliance. AI-driven platforms can offer personalized financial education, using machine learning algorithms to identify knowledge gaps and provide tailored resources to users. Through gamification and interactive tools, AI can make financial education more engaging and accessible, especially for individuals with limited formal education. Furthermore, AI-powered virtual assistants and chatbots can guide users through essential financial decisions, improving budgeting, credit management, and savings habits. In the realm of tax compliance, AI solutions can automate bookkeeping, tax filings, and other administrative tasks, reducing human error and lowering the compliance burden on small businesses. Predictive analytics can assist in tax planning by forecasting liabilities and helping businesses make informed decisions that minimize tax penalties and maximize cash flow. These advancements empower small businesses and entrepreneurs by enabling better financial management, fostering trust in the financial system, and facilitating access to funding opportunities. By integrating AI-driven financial literacy and tax compliance solutions, underserved communities and small businesses can unlock their economic potential, contributing to broader economic growth and financial inclusion. However, challenges such as data privacy, digital access, and regulatory concerns must be addressed to ensure equitable implementation of these technologies. The review concludes that with careful consideration of these factors, AI can be a powerful catalyst for sustainable economic development. Keywords: Leveraging AI-Driven, Financial Literacy Tax Compliance Small Businesses

Effects of royalty payment on petroleum profit tax evasion: evidence from the Nigerian non-renewable energy sector

AbstractThe impact of the tax regime on the non-renewable energy sector has been neglected in the current literature. The sector is reported to be at the heart of most oil and gas producing economies. Considering the immense contributions of this sector, the present study investigated the effects of royalty payments on petroleum profit tax evasion in Nigeria’s non-renewable energy sector. A survey, in the form of a questionnaire, was used to collect data from 312 oil and gas companies; while SPSS and PLS software were used to analyze the data. The results indicate that there is positive and significant relationship between tax rate, detection probability, and penalty, and petroleum profit tax evasion. Additionally, the result shows that there is a significantly negative relationship between royalty payment and petroleum profit tax evasion. The findings have significant policy implications for the non-renewable energy sector across the globe. The findings confirm the fact that higher tax rate, detection probability, and penalty, have a direct impact on petroleum tax evasion. The findings also call on policymakers to reconsider the level of royalty rates to a more reasonable level so as to reduce the extent of petroleum tax evasion among the oil and gas companies.

Optimizing environmental regulation policies for digital transformation in energy enterprises in China: An evolutionary game theory approach

In response to the global consensus on achieving carbon reduction, China has introduced a series of policies aimed at accelerating the digital transformation of energy enterprises. However, these policies have revealed shortcomings such as deficiency in regulation methods and insufficient integration of regulation with technologies. This study applies evolutionary game theory (EGT) to evaluate the impacts of different environmental regulatory policies on the digital transformation and verifies the effectiveness of the theory in policy optimization. Utilizing modified real-world data, the study quantitatively examines the effects of alterations in various parameter combinations on players' strategic choices. The results indicate that: (1) increasing the regulatory intensity above 0.8, the carbon tax rate and penalties can promote the digital transformation, stimulating the low-carbon development in energy sector; (2) an interesting finding is that tax incentives such as carbon tax refund ratio can exacerbate enterprises’ reliance on government compensation, thereby slowing down their transition process; (3) this study highlights the optimal service provision intensity for technological service providers (TSP) is 0.9, which can expedite system evolution towards the ideal state and foster the construction of a favorable digital regulatory environment. The study provides valuable references for optimizing regulatory policies and promoting digital transformation to realize the decarbonization goal.

The Trump Tax Penalty and Its Impact on the Economy

The Tax Cuts and Jobs Act (TCJA) was signed into law by former President Donald J. Trump in 2017.The law took effect on January 1, 2018.The law permanently cut the corporate tax rate to 21% and temporarily lowered individual tax rates. Evidence in this paper will demonstrate how an older married couple on Social Security and a modest pension actually incurred higher federal income taxes during the years 2018- 2021 as a result of TCJA. Paying higher federal income taxes as a result of TCJA is the Trump Tax Penalty.

PENGARUH PENGETAHUAN PAJAK, SISTEM PEMBAYARAN ONLINE DAN TINGKAT PENGHASILAN TERHADAP PENERIMAAN PAJAK BUMI DAN BANGUNAN DENGAN SANKSI PAJAK SEBAGAI VARIABEL MODERASI

PBB is a tax whose revenue and arrange are carried out by the local government. The PBB revenue that does not even reach the target is currently a concern for the Serang Regency Government. This study aims to determine the effect of tax knowledge, online payment systems and income levels on tax revenues. And then to determine the moderating effect between tax knowledge, online payment systems and income levels on PBB revenues. The method used quantitative with a causal associative approach. The population are taxpayers who get SPPT as many as 410,478. The samples was determined by the Solvin formula as many as 100 respondents. The data analysis method used Moderated Regression Analysis using SmartPLS 4.0. Based on the results, the t-value is greater than 1.96 and the significance value of p-values is less than 0.05 so that partially tax knowledge, online payment systems, and income levels have a positive and significant effect on PBB revenue and the role of tax penalties can increase the influence of tax knowledge, online payment systems, and income levels have a significant effect on PBB revenue. So the conclusion is tax knowledge, online payment system, and income level have a significant effect on PBB revenue. Tax penalties are proven to positively moderate the influence of the three independent variables on PBB revenue.

Tax Audit, Tax Penalty, Religiosity and Tax Compliance

The purpose of this paper was to investigate the impact of tax audit and tax penalty on tax compliance and examine the moderating effect of religiosity on the associations between tax audit and tax penalty with tax compliance in Pakistan. In this study, 400 questionnaires were distributed by using convenience sampling to actual as well as potential taxpayers of Pakistan, after which a total of 247 useable questionnaires were deemed suitable for analysis. Partial least squares structural equation modelling (PLS SEM) was devised using SmartPLS software to validate the measurement model and structural model and the predictive relevance of the study’s model. The findings showed that tax audit and tax penalty were positively associated with the level of tax compliance. They also demonstrated the moderating significant effect of religiosity on the relationship between tax penalty, tax audit and tax compliance. Tax authorities and policymakers in developing majority societies in developing countries and in other South Asian countries, especially in Pakistan may use the results to focus their interest on the formulation of policies founded on the outcomes of the study to strengthen revenue collection. This study extended the deterrence theory in the context of tax compliance by studying tax audit and tax penalty as well as the proposed moderating effect of religiosity in the purview of deterrence theory on tax compliance. The study explored the potential effect of these significant factors of tax compliance among actual as well as potential taxpayers in socio cultural context of Pakistan. Moreover, the suitability for the use of PLS-SEM as a statistical tool in investigating the above-mentioned relationships was also discussed.

THE EFFECT OF TAX SANCTIONS, VEHICLE TAX AMNESTY, AND E-SAMSAT ON THE MOTORISED VEHICLE OF THE TAXPAYER'S COMPLIANCE

Taxpayer adherence refers to an individual's willingness to comply with tax laws and regulations. Meeting the obligation of paying motor vehicle taxes is a significant responsibility for individuals who own vehicles. The main objective of this research is to gather real-life evidence on how tax penalties, PKB amnesty, and E-SAMSAT impact the compliance of motor vehicle taxpayers in Denpasar City. Non-probability sampling, specifically accidental sampling, was used to select 100 participants based on the slovin formula. Data was collected through questionnaires, and multiple linear regression analysis with the SPSS software was used to test the hypotheses. The findings indicate that tax penalties, PKB amnesty, and E-SAMSAT all contribute positively to the compliance of motor vehicle taxpayers in Denpasar City.

Analisis Kualitas Pelayanan, Pengetahuan Dan Pemahaman Wajib Pajak Yang Mempengaruhi Tingkat Kepatuhan Wajib Pajak

This study aims to analyze the factors influencing the compliance of motorcycle taxpayers in Surabaya. Taxpayer compliance is crucial for increasing local tax revenue, which contributes to regional development. The study employs a qualitative method with a survey approach, where data are collected through questionnaires distributed to motorcycle owners in Surabaya. The independent variables analyzed include tax knowledge, taxpayer awareness, perceptions of tax services, penalties and fines, and trust in the government. The data analysis is conducted using multiple linear regression to determine the effect of each variable on taxpayer compliance levels. The results indicate that tax knowledge, taxpayer awareness, and perceptions of tax services have a significant positive impact on taxpayer compliance. These findings suggest that to improve taxpayer compliance, the government should focus on enhancing tax education, improving the quality of tax services, and building public trust in the tax system

Perbandingan Penyelesaian Keberatan dan Banding Pajak di Amerika Serikat, Australia dan Indonesia

The research was conducted using normative legal research methods, which were carried out through literature research and literature studies and the approach used in conducting this research was a statutory approach and a conceptual approach, to elements in the tax law system. The research found that the position of the Fiscus in Indonesia which has absolute power in determining the amount of tax and decisions on taxpayer objections according to Law Number 28 of 2007 does not provide fair legal certainty and does not reflect the principle of equal legal position as stipulated in Article 27 paragraph (1) of the 1945 Constitution, because of the risk of tax penalties of 30% to 100% due to defeat in objections and appeals. Unlike the United States, which has three tax courts with FOI principles, and Australia, which provides neutral mediation through the ATO and internal and external settlement channels, Indonesia needs to improve fiscal justice by fulfilling taxpayers' rights such as the rights to information, guidance, hearing, appeal, certainty, privacy, and confidentiality. The principles of fairness, effectiveness, and ease of administration are important to increase tax capacity and ensure taxpayers can carry out their obligations properly.

Perception on Tax System Structure, Tax Compliance Costs and Tax Compliance Behaviour in Yemen

This study considered the tax system structure into tax penalty, tax rate, and tax audit, and then examined their effects on tax compliance behaviour among small and mediumsized enterprises (SMEs) in the manufacturing sector of Yemen. Also, the tax compliance cost in Yemen was considered as a mediating factor in the tax system structure and tax compliance model. The study used a survey questionnaire to collect data based on previous studies. The study empirically found a strong positive and significant association between the tax rate, tax penalty, and tax audit and manufacturing SME tax compliance behaviour in Yemen. Whereas tax compliance cost is negatively related to tax compliance behaviour. For the mediation effect, only the relationship between two factors, that is tax rate and tax penalty with tax compliance behaviour were mediated by of tax compliance costs. While no evidence for the mediating effect of tax compliance costs on the relationship between tax audit and the tax compliance behaviour is found. By referring to Deterrence Theory, this study has contributed by extending the tax literature through a framework that examined tax compliance cost as a mediator in the association between manufacturing SME tax compliance behavior in Yemen and the structure of the Yemeni tax system.

Tax avoidance and tax evasion: current insights and future research directions from an emerging economy

PurposeThis study aims to identify factors affecting tax avoidance and tax evasion in Bangladesh and propose a future research agenda.Design/methodology/approachThis paper reviewed 423 articles published between 2010 and 2023 using a systematic literature review (SLR) approach.FindingsThe review classified the factors into three categories, namely individual taxpayers, corporate taxpayers and tax administration. Income level, tax penalty, tax morale, inefficient tax return system and tax assessment process are associated with the individual’s tax avoidance and tax evasion activities. Profitability, corporate governance and financial restrictions are key factors influencing corporate taxpayers’ involvement in tax avoidance and tax evasion. Factors related to tax administration include lack of social interaction, distrust of national officials, complexities of policies, politicisation of tax authority, lack of political stability, incompetent auditing, insufficient recording, lack of administrative cooperation, lack of accountability, insufficient counselling and compromising in tax prosecution cases.Practical implicationsThis paper provides tax regulators with insights to improve regulations and lessen tax avoidance and tax evasion activities.Originality/valueThis paper is the first attempt to provide guidance for academics when examining tax avoidance and tax evasion in Bangladesh.

Nudging for prompt tax penalty payment: Evidence from a field experiment in Indonesia

We conduct a randomised controlled trial in Indonesia to evaluate the effect of three intervention letters on tax penalty compliance behaviour. Over 10,000 individual taxpayers are randomly assigned to receive either a deterrence, information, or simplification letter, or no letter. Our results indicate that simplification, which makes paying a penalty less burdensome administratively by providing billing codes to pay the penalties, yields the highest probability of timely settlement, increasing compliance by 32% compared to the control group. Deterrence also positively impacts penalty compliance, increasing timely settlement rates by 27%. The least effective intervention is the information letter. Although associated with a 10% increase in timely settlement, this effect is statistically insignificant at the 10% confidence level. Our results suggest that strategic messaging by tax authorities in developing countries can be a cost-effective tool for improving tax penalty payment compliance.

Assessing Individual Taxpayer Compliance: Does Service Quality Moderate Tax Knowledge and Tax Penalties?

The objective of this study is to assess the impact of tax knowledge and tax penalties on the compliance of individual taxpayers, with service quality acting as a moderating variable, at the Mulyorejo Pratama Tax Service Office. The study population consisted of all individual taxpayers who were registered at the Surabaya Mulyorejo Pratama Tax Office. The study utilized a sample of 100 respondents from a population of 47,115 personal taxpayers. The sample was drawn from the Surabaya Mulyorejo Pratama Tax Service Office in 2018. The questionnaires are distributed using the incidental sampling technique. The data collection in this study was carried out utilizing a questionnaire. The study employed the Partial Least Square (PLS) analytic technique, utilizing the warpPLS 6.0 program. The findings indicated that having knowledge about taxation had a positive impact on personal taxpayer compliance. However, the imposition of taxation penalties did not have any effect on personal taxpayer compliance. Additionally, the moderation of service quality was unable to influence the relationship between tax knowledge and personal taxpayer compliance. However, it was found that service quality moderation had a significant effect. It diminished the impact of tax penalties on the compliance of individual taxpayers.

Research on the Legal Relationship between Tax Treatment and Tax Penalty under the Background of Judicial Remedies

The diversity of tax processing decisions and tax penalty decisions, as well as the complexity of taxpayers seeking remedies, have sparked many controversies in practice and theory. There have been cases where some taxpayers file lawsuits against tax penalty decisions in order to revoke tax processing decisions. The courts have different opinions on this matter, and long-term coexistence of different opinions will hinder the unity of tax enforcement standards and the maintenance of tax management order. This article is divided into four parts. Through legal analysis of the problems exposed in the administrative penalty case of "Jushantang" Pharmaceutical Group, unique ideas are provided for the controversial practical issues, effectively promoting the prompt resolution of conflicts and social harmony and stability. The first part of this article introduces the concept and types of judicial remedies, as well as the legal basis of tax treatment and tax penalties. The legal relationship between tax treatment and tax penalties under the background of judicial relief is the research object of this article. After reasonable division, the basic theory of judicial relief is clarified, and the legislative and practical status of tax treatment and tax penalties is explored, providing theoretical support for this study. The second part elaborates on the administrative penalty case of "Jushantang" Pharmaceutical Group, extracts the core issues in the case, and raises the issue of the correlation between tax processing decisions and penalty decisions through this case. The following text will conduct a legal analysis around related administrative acts. The third part provides specific solutions to the core issues extracted from the case, by abolishing the "pre tax payment" rule and constructing an administrative self correction system to solve the problems from a legislative perspective, providing taxpayers with more comprehensive relief channels. At the same time, in judicial practice, the exercise of taxpayer relief rights is guaranteed through the court's judicial recommendations and the Supreme Court's issuance of guiding cases, and the issue of judicial disputes is resolved from the source. The fourth part draws the conclusion of the article. This article believes that due to the complexity of tax dispute relief channels and the diversity of practical situations, it is not advisable for some taxpayers to file a lawsuit against tax penalty decisions to revoke tax processing decisions, which is a way to avoid the "double pre emptive" relief rule. In response to this, the "pre tax payment" rule should be abolished, the threshold for taxpayers to seek legal remedies for tax disputes should be lowered, and the conditions for legal remedies should be relaxed.

Tax Audit, Tax Penalty and Tax Compliance: A Case Study of Pakistan

Tax Audit, Tax Penalty and Tax Compliance: A Case Study of Pakistan

Analysis of Administrative Penalty for Late Issuing Tax Invoices in Indonesia: A Comparative Study from Vietnam

This study analyzes and compares the administrative penalty for late issuing tax invoices between Indonesia and Vietnam. The existence of a penalty has not been a driving factor for taxpayers to fulfill their tax obligations. Article 14 paragraph (4) General Provisions and Tax Procedures Law regulates the tax penalty for late issuing tax invoices, the same as for those who do not issue invoices. The administrative penalty needs to be analyzed more and compared with other countries' practices. VAT penalty cannot necessarily increase the compliance of taxable entrepreneurs. This research uses primary and secondary data sources for the qualitative method. The results of this study indicate that tax penalties should be designed by looking at the level of taxpayer error. Vietnam has no administrative penalty for the late issue of tax invoices but differentiates more penalties for tax invoices according to the level of violation. Tax penalties in Indonesia should be designed by considering the level of taxpayer violation, as Vietnam regulates. Administrative penalties for late tax invoices should not be the same as those imposed on taxpayers who did not issue tax invoices. The study recommends that tax authorities re-design the administrative penalties policy regarding tax invoice violations.

Unveiling Perspectives on Carbon Tax in the Carbon Emissions Industry

The pressure of climate action becomes more crucial, especially to achieve the goals outlined in the Paris Agreement. In the Paris Agreement, Malaysia has committed to reducing greenhouse gas emissions across the economy by 45% in 2030. Malaysia has taken proper action to ensure the reduction of carbon emissions. Still, it only focuses on tax incentives and motivations toward a clean environment without involving tax penalties for the emitters. Policymakers worldwide are now changing to tax-based policies to lessen carbon emissions. Malaysia is also expected to implement the carbon tax soon. This study aims to determine Malaysia's crucial carbon emission sector and investigate the perception of implementing a carbon tax in Malaysia. This study uses desk research and questionnaires to collect data from the industry, the Inland Revenue Board of Malaysia, and the public. This study has successfully identified key sectors responsible for significant carbon emissions and gathered respondents' perceptions towards implementing a carbon tax. The implications of the study are also highlighted.

PENGARUH KESADARAN WAJIB PAJAK, SANKSI PAJAK, PENGETAHUAN PERPAJAKAN DAN PELAYANAN FISKUS TERHADAP KEPATUHAN WAJIB PAJAK KENDARAAN BERMOTOR DI KABUPATEN ACEH TENGGARA

Taxes are the main source of government and state revenue used to finance government spending and national development. This research aims to examine the effect of taxpayer awareness,tax penalties, tax knowledge, tax service quality to the taxpayers compliance of motor vehicles in District Southeast Aceh. The population used in this study is taxpayers who own motorized vehicles registered at the SAMSAT Office in Southeast Aceh Regency. The number of samples in this study were 100 respondents with the sampling method using the Simple Random Sampling technique. The data used in this study is primary data from the result of distributing questionnaires. The test method uses the Valadity and Reliability test, Classical Assumption test, and Multiple Regression Analysis with the SPSS for Windows Version 25 program. The results of this study found that the variables of Taxpayes Awareness, Tax Sanctions, Tax Knowledge and Fiscus Services have a positive and significant effect on Motor Vehicle Taxpayer Compliance in District Southeast Aceh. With the result of this study it is hoped that the Southeast Aceh District SAMSAT office will continue to improve its performance so that people have confidence in paying taxes

Investors’ Reaction: Exploring Supervisory Function and Corporate Tax Policy

Purpose: This study aims to analyze investor reactions to the supervisory function carried out by independent commissioners and audit committees, especially in supervising corporate tax policies taken by management. Theoretical framework: Corporate tax policy has the risk of tax penalties in the future and risks reducing investment returns in the future, so the role of independent commissioners and audit committees should be able to supervising management so that the tax policies taken do not harm investors. Method: 565 panel data from manufacturing companies on the Indonesia Stock Exchange 2015-2022 were analyzed with a quantitative approach and multiple linear methods using STATA. Result: This study found that independent commissioners encourage management in tax burden minimization policies, while the audit committee is not optimal in carrying out its supervisory function over corporate tax management policies. In addition, investors react to the audit committee because it is considered capable of carrying out the supervisory function of management, while investors do not react to independent commissioners and corporate tax policies. Research, Practical & Social implications: The results of this study encourage entities to increase the role of independent commissioners in carrying out supervisory functions such as the audit committee in order to get a positive response from investors which can increase company value for sustainability business. Originality/value: In this study, corporate tax policy is measured by reducing the statutory tax rate with a tax compliance ratio that is rarely used in previous studies, resulting in how much corporate tax policy minimizes the tax expense.