Tax Policy Research Articles

Análisis Bibliométrico sobre la Auditoría Tributaria en Web of Science

The objective was to carry out a bibliometric analysis on the Tax Audit in Web of Science, 2024. 177 documents were analyzed with the following filters: keywords ("audit", "tax audit" and "taxation"), original open access articles, in English, Spanish and Portuguese between 2005-2024. VOSviewer was used to analyze categories of co-citations, co-occurrences and co-authorships. It is revealed that 98.3% of the articles are in English; Accounting Review stands out with about 463 citations and a total link strength of 21,110; the keywords "taxation" (53 mentions and 162 strong links) is the most popular; and England (56 documents) is the country with the highest production. It is concluded that research on Tax Audit tends to have increasing relevance in recent years and the phenomenon is related to tax policy and tax compliance. Finally, it is necessary to promote international collaborations and strengthen research production in less represented countries.

Does tax refund policy boost executive compensation?

Tax reforms have a profound impact on corporate compensation. While existing research has extensively examined the effects of tax cuts and breaks on corporate compensation, the relationship between tax refunds and executive compensation remains largely unexplored. To address this gap, this paper employs a difference-in-differences approach to investigate the causal effect of China’s value-added tax credit refund policy on executive compensation. The findings reveal that the tax refund policy increases executive compensation, primarily by enhancing net income, which lays the financial foundation for higher executive compensation. These effects also exhibit heterogeneity across corporate regions, life cycle stages, ownership structures, and executive categories. This paper is the first to explore the relationship between tax refunds and executive compensation, providing valuable insights into how external tax policies influence corporate internal incentive structures.

Unearthing hidden agendas: carbon emissions and corporate tax strategies

Purpose This study aims to investigate the relationship between carbon risk and tax avoidance practices among American firms. Design/methodology/approach The research examines 854 American firms over the period from 2015 to 2021. A two-stage least squares regression technique with instrumental variables is used to address potential endogeneity concerns. Findings The study shows that an increase in carbon risk is associated with higher tax avoidance, particularly through Scope 1 and Scope 2 emissions. These findings are robust across various metrics used to measure carbon risk and align with the insights derived from agency theory. Research limitations/implications Although focusing on American firms provides a consistent regulatory context, it may limit the generalizability of findings to other contexts. The study’s implications suggest that policymakers and managers should consider the interplay between environmental and tax policies in their decision-making processes. Originality/value This study contributes to the literature by extending the understanding of determinants of corporate tax avoidance by introducing carbon risk as a significant factor. The results provide valuable insights for stakeholders into the evolving dynamics of corporate environmental and fiscal responsibilities.

Widening the price gap: the effect of the Netherlands' 2020 tax increase on tobacco prices.

The public health impact of a tobacco tax increase depends on the extent to which the industry passes the increase onto consumers, also known as tax-pass through. In 2020, the Netherlands announced tax increases aimed to increase the retail price by €1 per 20 factory-made cigarettes and €2.50 per 50 grams of roll-your-own tobacco. This study examines the pass-through rate after the tax increase, and whether this differed by type of tobacco and brand segment. Self-reported prices of 117 tobacco brand varieties (cigarettes=72, roll-your-own=45) pre- and post-tax increase were extracted from the 2020 International Tobacco Control (ITC) Netherlands Surveys (n=2959 respondents). We calculated the tax pass-through rate per variant, examining differences between type of tobacco and brand segments. On average, cigarette prices increased by €1.12 (SD=0.49) (112% of €1) and roll-your-own prices by €2.53 (SD=0.60) (101% of €2.50). Evidence of differential shifting across segments was found, with evidence of overshifting in non-discount varieties. The average price of discount varieties increased with €0.20 less than non-discount varieties. Similarly, the net-of-tax price decreased in discount varieties (cigarettes=-€0.02; roll-your-own=-€0.05), but increased in non-discount varieties (cigarettes= +€0.14; roll-your-own= +€0.20). Despite the large tax increase, the industry increased prices in line or above the required level. Through differential shifting, the price gap between discount and non-discount varieties has widened, which may reduce the public health impact of the tax increase. Measures aimed at reducing price variability should be strengthened in taxation policy, such as the European Tobacco Tax Directive. We found that the industry used differential shifting after a significant tobacco tax increase in the Netherlands. Prices increased more than required in higher-priced products, but not in lower-priced products. This pattern was found both for factory-made cigarettes and roll-your-own tobacco. Through differential shifting, the industry undermines the potential public health impact of tobacco tax increases, by offering a relatively cheaper alternative, which discourages people to quit or reduce consumption. The revision of the European Tobacco Tax Directive (TTD) provides an opportunity to address the widening price gap - both between and within product segments - across the European Union.

Peran Wajib Pajak Kendaraan Bermotor Atas Kebijakan Pemutihan Pajak dan Pajak Emisi Karbon di Kabupaten Karawang

Tax whitening policies and motor vehicle carbon emission policies are one of the things that need to be considered, where the tax whitening policy must be seen as to the effectiveness of the policy and the carbon emission tax must be structured so that it can be accepted by the public. This research was conducted with the aim of knowing, analyzing and explaining the tax whitening policy and vehicle carbon emissions tax policy in Karawang Regency. This research uses a qualitative research approach with descriptive analysis methods. Research data was taken through field observations, interviews and literature studies. Based on the results and discussion, it was found that the effectiveness of the Vehicle Tax Reduction Program in Karawang, which is carried out regularly every year and socialization is carried out through various media, has succeeded in creating enthusiasm and community participation. This positive response can be seen from the increase in tax revenue and active taxpayer participation during the tax whitening period. If the vehicle carbon emissions tax policy is implemented in Karawang Regency, it has the potential to reduce pollution levels by 10%. However, taxpayers have had little response to this policy because it will increase the amount of responsibility for paying vehicle tax. The conclusion confirms that the tax whitening program is effective in achieving tax revenue objectives and stimulating community participation. The carbon emissions tax policy still needs to be thoroughly disseminated to the public so that the main objectives of the policy are conveyed well.

Optimal Sin Taxation and Market Power

We study how market power impacts the efficiency and redistributive properties of sin taxation, with an empirical application to sugar-sweetened beverage taxation. We estimate an equilibrium model of the UK drinks market, which we embed in a tax design framework to solve for optimal sugar-sweetened beverage tax policy. Positive price-cost margins for drinks create inefficiencies that lower the optimal rate compared with a perfectly competitive setting. Since profits mainly accrue to the rich, this is partially mitigated under social preferences for equity. Overall, ignoring market power when setting tax policy leads to welfare gains 40 percent below those at the optimum. (JEL D62, H21, H23, H25, L13, L25, L66)

Taxation in the context of high informality: Conceptual challenges and evidence from Sub‐Saharan Africa

AbstractThe terms ‘informal sector’ and ‘shadow economy’ are in vogue but remain conceptually fuzzy in what they measure or mean. They are used in tax research and policy but with many assumptions, leading to poorly designed policies that lead to further immiseration of those who derive their livelihoods informally. Focusing on Sub‐Saharan Africa, I critically interrogate the current conceptualisation of informal economic activities and how they are thought to relate to taxation. Critically, I use existing estimates of informality and taxation data to demonstrate the need to cast the tax net wider than the usual bias toward visible subsistence informality. I show that informality is not novel among many factors negatively associated with tax revenue mobilisation, especially in its broader historical context. I then show that technology adoption can play a role in mitigating taxation challenges associated with informality. However, the role of technology remains limited if not embedded in and supported by improving government institutions, which, though protracted, show higher outcomes on taxation. Since the terms ‘informal sector’ and ‘shadow economy’ describe diverse economic activities, conceptual diversity is not necessarily problematic, but precision is necessary when these terms are brought to tax research, including frank discussions on data quality issues and when the concepts need to be generalised or restricted to context.

EXPLORING ETHICAL PERCEPTION OF TAX AVOIDANCE AMONG ACCOUNTING STUDENTS

Research Purposes. This study examines the influence of Love of Money, Machiavellian, and Distrust to Fiscus, as well as Religiosity as a moderator on Ethical Perception of Tax Avoidance. Research Methods. This quantitative research collects primary data through online questionnaires. Respondents in this study included 117 accounting students from 26 universities in DKI Jakarta Province, who were selected using a purposive sampling technique. The data in this study were analyzed using the PLS-SEM method with the help of SmartPLS 4.0 software. Research Results and Findings. This study's results indicate that Machiavellian positively influences the Ethical Perception of Tax Avoidance. Meanwhile, the Ethical Perception of Tax Avoidance is not influenced by the Love of Money and the Distrust to Fiscus, and Religiosity also does not moderate it. The findings of this study are expected to enrich the literature related to the influence of Machiavellian on the Ethical Perception of Tax Avoidance and recommend to the Government and Universities to consider Machiavellian factors when formulating taxation and education policies.

The impact of new VAT enforcement on financial performance: Evidence from Saudi Arabia non-financial listed companies using the event study and ARMA model

This paper examines the influence of the new 15 % Value Added Tax (VAT) enforcement on non-financial listed companies in Saudi Arabia. By comparing financial data from 2019, before the VAT implementation and the COVID-19 pandemic, with data from 2020, during both the VAT increase and the pandemic, the research aims to uncover the consequences of this tax policy change. Utilizing charts, tables, and an event study analysis approach with the Autoregressive Moving Average (ARMA) model, we investigated key financial indicators such as Shareholders' Equity (SE), Total Income (TI), Total Revenues (TR), Net Income (NI), Total Expenses (TE), Other Changes in Operating Activity (COA), and Cash at the End of the Period (CEP). The findings reveal significant financial impacts, highlighting companies' challenges due to the increased tax burden. Shareholders' Equity dropped from an average of 11.55 million to 4.57 million, and Total Income and Total Revenues decreased from approximately 1.73 million to 316,234 and from 1.95 million to 331,605, respectively. Net Income sharply declined from 406,109 to 74,624, and Total Expenses decreased from about 1.18 million to 223,495. Other Changes in Operating Activity shifted from a negative mean of −168,936 to a positive 523,520, and Cash at the End of the Period fell from 1.99 million to 666,663. These results suggest that the VAT increase has significantly strained companies' financial performance, emphasizing the need to consider such tax reforms carefully, particularly in developing countries. The study concludes that while the VAT increase aims to enhance government revenues, it imposes substantial financial strain on companies, potentially leading to long-term economic repercussions. Policymakers should consider these implications and implement practical measures to optimize the VAT system and support business resilience in the face of such reforms.

Research on the group effect of new energy vehicles from different policy perspectives

Abstract Policies play a pivotal role in fostering the growth of new energy vehicles. This paper delves into the benefits and risks associated with the development of new energy vehicles under varying policy landscapes. Firstly, the intricate relationship between the competition and growth of new energy vehicles and internal combustion engine vehicles is captured through the application of the extended Lotka-Volterra model. Secondly, a simulation flow diagram is constructed, taking into account the actual mediums of policy impact and drawing insights from diverse research methodologies. This flow diagram enables a comprehensive evaluation of environmental benefits, health risks, and traffic pressure. Finally, a critical evaluation of the actual impact of policies on new energy vehicles is conducted, along with an exploration of the root causes of potential policy paradoxes. The findings reveal that a standalone infrastructure support policy, research and development support policy, or carbon tax policy can, in certain periods, lead to an increase in carbon emissions and traffic pressure. Although the driving restriction policy does not exert negative impacts on the environment, health, and traffic at the national level, it can result in a surge in the total vehicle population. Therefore, it is imperative to adopt a combination of policies to mitigate the potential risks associated with any single policy.

Tax incentives and corporate digital transformation: Evidence from China’s accelerated depreciation policy

Corporate digital transformation is a significant path for industrial upgrading and sustainable development. This study employs China’s accelerated depreciation (AD) policy as a quasi-natural experiment to explore the impacts of tax incentives on the digital transformation of enterprises. Using panel data of China’s listed companies from 2010 to 2019, we find that AD policy significantly promotes firms to engage in digitization practices through the channels of firm investment and firm innovation. We also find that the policy effects are more pronounced for firms with a higher level of digitization, firms with stronger financial constraints, non-state-owned enterprises, and firms located in East China. Moreover, we also present a positive relationship between digital transformation and firm performance. Our study supplements the literature on the determinants of digital transformation and provides insights into how tax policy shapes firms’ incentives to be more digitized.

Evaluating the carbon emission reduction in construction and demolition waste management in China

Construction and demolition waste reduction (C&DWR) is an important measure to protect the environment and promote sustainable development in the construction sector. The present policy in China remains a lack of emphasis on carbon tax and penalty for reducing construction waste. This paper proposes a construction and demolition waste (C&DW) management model to identify the waste reduction effects of various policies in China. It simulates the effects of single policies and combined policies on waste reduction and carbon emission by using the approach of integrating system dynamics and grey model theory. The results reveal that: (1) Penalties can effectively reduce the amount of illegal dump waste and carbon emissions from illegal dump waste, with an appropriate penalty value (in Chinese CNY) suggested as ∈160,320. (2) Subsidies can vastly increase the amount of waste recycled and a carbon tax can reduce carbon emissions; the recommended values are suggested as subsidies ∈30,45 and carbon tax ∈40,70. (3) Compared to other policies, the combined policy of penalty–waste disposal charging fee–subsidy–carbon tax (160, 60, 45, 70) achieves the greatest environmental benefits in terms of reducing waste and carbon emission. (4) Governments should improve waste minimization incentive policies and gradually introduce trials for a carbon tax policy, encourage the use of digital governance combined with blockchain technology to regulate C&DW. These findings provide valuable insights for policymakers to develop effective waste reduction strategies and promote sustainability through the implementation of C&DWR theories.

Создание особых экономических зон после моратория: причины, тенденции, закономерности

Improvement of the investment climate is one of the main priorities of the Russian tax policy, in which special economic zones (SEZ’s) play a significant role. The pace of their creation has increased significantly in recent years. The main idea, as always, is to attract investment. However, the more such zones appear, the more obvious becomes the gap in defining the strategic role of the SEZ regime, which has already been introduced in dozens of Russian regions, but still lacks a clear conceptualization. Moreover, the revival of interest in SEZ’s contrasts sharply with the recent moratorium on their creation. Such dramatic changes have underlying motives, the understanding of which is necessary to avoid a superficial view of investment attraction policies. Since they are currently of particular importance for ensuring macroeconomic stability, the purpose of the article is to identify the problems that may hinder the effective application of the SEZ regime in Russia. On this basis, the article systematizes the prerequisites for lifting the moratorium, establishes patterns and explains trends in the creation of SEZ’s, as well as gives proposals for the development of the concept of economic zoning.

State cigarette taxes, smoking cessation, and implications for the educational gradient in mortality

BackgroundRecent studies suggest that state policy, such as cigarette tax policy, is associated with variation in the educational gradient in mortality. However, it is unknown whether state cigarette taxes moderate the educational gradient in mortality directly by incentivizing smoking cessation. MethodsThis study uses 20 years of survey data from the Panel Study of Income Dynamics (N = 89,127 person-years; 751 deaths) merged with administrative data to examine the potential for a single state policy, cigarette taxes, to moderate the education-mortality association through influence on smoking cessation. ResultsIn mortality analyses, higher cigarette taxes are associated with a weaker educational gradient in mortality among smokers and overall. Smoking cessation analyses show higher state cigarette taxes increase the odds of quitting only for low-educated smokers, such that each $1 increase in taxes results in an additional 0.4 to 1 life years for low-educated smokers. For more educated subgroups, the association between state cigarette taxes and smoking cessation is confounded by broader temporal trends. DiscussionState cigarette taxes have potential to weaken the educational gradient in mortality by attenuating educational disparities in smoking cessation, however their direct effect is only on low-educated smokers. The findings help demonstrate how fundamental cause associations are contingent on state policy and vary over time.

Tax Policy Uncertainty and Investment in Tax Planning: Firm-Level Evidence

Tax Policy Uncertainty and Investment in Tax Planning: Firm-Level Evidence

The Role of AI and Machine Learning in Optimizing Taxation Policies for Rural Development and Infrastructural Upgrades

The Role of AI and Machine Learning in Optimizing Taxation Policies for Rural Development and Infrastructural Upgrades

Effect of Economic Policies on Income Inequality: A Comparative Study of Switzerland and Bolivia

Purpose: The aim of the study was to examine the effect of economic policies on income inequality: a comparative study of Switzerland and Bolivia. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Switzerland, with its advanced economy, implements progressive tax policies, robust social welfare programs, and equitable education systems, contributing to relatively low income inequality. In contrast, Bolivia, a developing nation, faces challenges in reducing income inequality due to less effective economic policies, limited social safety nets, and a larger informal sector. The study underscores that while Switzerland's policies effectively mitigate income disparities, Bolivia's efforts are hindered by structural economic issues and policy limitations. Unique Contribution to Theory, Practice and Policy: The Kuznets curve theory, the human capital theory & the social stratification theory may be used to anchor future studies of climate change on risk management practices in agriculture in Switzerland. From a practical perspective, the study provides actionable insights for improving the design and implementation of economic policies. The study offers several policy recommendations for both developed and developing economies. Policymakers in Switzerland should consider revising tax policies to address the increased burden on higher-income individuals and improve the overall equity of the system.

기회형 창업자와 생계형 창업자의 인식을 반영한 창업생태계 활성화 방안: IPA 및 추세 분석

This study aims to explore activation strategies for the Korean entrepreneurial ecosystem by reflecting the perceptions of both opportunity-driven and necessity-driven entrepreneurs. Using Importance-Performance Analysis (IPA) and trend analysis, we evaluate key components of the entrepreneurial ecosystem and analyze the perception differences between the two types of entrepreneurs. The results indicate significant differences in how opportunity-driven and necessity-driven entrepreneurs perceive the importance and performance of startup support policies, providing valuable policy implications. Specifically, opportunity-driven entrepreneurs highly evaluated the performance of funding and government support programs, whereas necessity-driven entrepreneurs emphasized the importance of social safety nets and tax policies. Based on these perception differences, this study proposes improvement strategies for the entrepreneurial ecosystem, aiming to enhance the survival rate of startups and promote sustainable growth. The findings offer critical policy insights to better support the diverse needs of entrepreneurs.

The Impact of Tax Incentives on the Growth of Small and Medium-Sized Enterprises: A Comparative Study Based on Industry

Tax incentive policies have been widely used as a crucial tool to promote the development of Small and Medium-sized Enterprises (SMEs), but their effectiveness varies across different industries and policy types. This study utilizes a comprehensive panel dataset from 2015 to 2023 to investigate the impact of Value-Added Tax (VAT) and income tax incentives on the growth of SMEs in China. Through fixed effects model analysis, we find that both VAT and income tax incentives significantly enhance SMEs' sales revenue and total asset growth. However, the magnitude of these effects differs substantially across industries, with high-tech and information technology service industries benefiting the most. Our industry comparison analysis reveals that the effectiveness of tax incentives is closely related to industry-specific characteristics, such as research and development (R&D) intensity and capital requirements. These findings provide key empirical evidence for optimizing SME tax policies and suggest that a more nuanced, industry-specific approach to tax incentives is needed. This study not only contributes to the literature on SME growth and tax policy effectiveness but also offers important insights for policymakers to refine SME support systems in the context of rapid technological change and economic transformation.

Fiscal and Tax Policy of Bogd Khanate of Mongolia (1911–1919)

Abstract As a result of the prolonged struggle for national independence, the Mongolian people, who endured over two centuries of oppression under Manchurian rule, regained sovereignty in 1911 and established the Republic of Mongolia. During this period, significant economic, social, and political reforms were initiated, laying the groundwork for the national financial system. This article examines the social, political, and economic landscape during the Bogd Khanate of Mongolia. Research into the tax and financial policies implemented during this period was conducted using historical documents and sources. Within the framework of Mongolian governmental financial policies, five ministries were established, accompanied by the enactment and implementation of various regulations about finance, taxation, and customs. Efforts were made to enhance state revenue; however, the accumulation of debt owed to foreign moneylenders and merchants, coupled with the taxation burden on Mongolian citizens, including payments to domestic nobles and religious institutions, exacerbated poverty and economic hardship among the populace. In June 1915, the autonomy of Mongolia, as stipulated in the treaty between Russia, Mongolia, and China, was abolished in 1919, resulting in the reassertion of foreign control over Mongolian governance.