Tax Rebate Research Articles

Implications of Corporate Dividend Policy on Corporate Taxation:

Corporate dividend policy is related with corporate tax liability. Tax liability of companies may vary depending on the payment of dividend. Effective corporate dividend policy can reduce corporate tax liability. Thus, effective corporate dividend policy can help corporations maximize shareholders’ wealth by reducing effective tax rate. Tax liability may increase or decrease depending on the dividend payment of a company. The objective of this study includes justifying the implications of Corporate Dividend Policy on Corporate Taxation in case of listed pharmaceuticals companies in Bangladesh. In this study 6 listed pharmaceuticals companies in Bangladesh have been included and it has been found that when those companies paid dividend at prescribed level as per corporate tax law, they got tax rebate on their regular tax rate. Thus, after deducting the tax rebate those companies paid tax liability at reduced rate and this eventually lessened effective tax rate. Companies may ensure payment of dividend in away, so that retained earnings can be used for future investment opportunities as well as the tax burden becomes logical. They should make balance between dividend policy and tax liability to maximize the wealth of shareholders

Can policy measures foster plug-in electric vehicle market diffusion?

Plug-in Electric vehicles (PEV), both as battery electric vehicles (BEV) and plug-in hybrid vehicles (PHEV) have noteworthy potential to reduce global and local emissions. Governments around the world have implemented monetary and non-monetary policy measures to foster PEV market diffusion. However, empirical estimates of their effectiveness are scarce. Here, we analyse data on PEV sales from Europe and the US with the policy measures active in these countries, e.g., direct subsidies, tax rebates, and public charging infrastructure. The aim of the present paper is to contribute empirical evidence to the discussion of policy aided market evolution of electric vehicles. We find income, gasoline prices and both direct and indirect subsidies to positively influence PEV adoption.

Channel Selection in a Gray Market Setting: Considering the Export Tax Rebate

This paper examines the influence of gray market on manufacturer’s channel selection when considering the export tax rebate. A two-country, three-stage model is used to investigate manufacturer’s optimal operation strategy. We get the equilibrium outcomes through a Stackelberg game in different scenarios. The results show that the Company U may have incentive to encourage gray market if market demand ratio and product differentiation satisfied some condition. In a gray market setting the manufacturer prefers external sales channel with the two-part tariff contract first, a direct channel second, and external sales channel with wholesale price contract third. The study also shows that the policy of the export tax rebate will enhance manufacturer’s profit and increase sales volume of gray market goods. In the extension, if manufacturer selects the direct channel, he can achieve optimal profit by giving decision power to sales department to determine retail quantity. Because the transfer price given by the manufacturer can convey signals of domestic market competition.

Revisiting estimation methods of business zakat and related tax incentives

Purpose Available zakat accounting standards as well as the laws governing business zakat suggest that the adjusted net working capital or the adjusted growth capital of a business may be regarded as the base for computation of its zakat liability. The apparent consensus follows from the fiqhi prescription of imposing zakat on urud al-tijarah or the inventory of goods available for trade. Some contemporary scholars however question the rationale underlying this method and argue that the objectives of the Shariah are better met by seeking recourse to alternative methods of zakat determination for business organizations. There is therefore a need to revisit the issues and subject them to fresh scrutiny in terms of economic rationality and consistency. Design/methodology/approach The paper examines the arguments of the “orthodox” school as well as those of some contemporary scholars on alternative methods of computing business zakat. It also undertakes a comprehensive review of the laws of zakat as they are related to businesses and the related accounting pronouncements along with their underlying rationale. As the issue of incentivizing zakat payment is an important one, and it is often linked to provision of tax benefits, the paper examines a few suggestions in this regard. Findings On examination of specific suggestions – specifically, of treating earnings as zakat base – to scrutiny in terms of economic rationality and consistency, the authors argue that the “orthodox” position is not only consistent but also makes enormous economic sense. Further, the issue of incentivizing zakat payment and that of lack of harmonization between business zakat accounting and taxation need not be and should not be resolved by making changes in the former because the same has a sound Shariah basis. It can be easily resolved, if need be, by making changes in methods of taxation (tax deduction or tax rebate) and base them on specific items in the balance sheet or the income statement. Practical implications The paper provides useful insights to policy makers who are concerned about the huge gap between actual and potential collection of zakat and are considering tax reforms for incentivizing business zakat mobilization. It highlights the diversity in practices relating to zakat computation and related taxation across Muslim countries. Originality/value The paper searches for and observes consistency and compatibility between the orthodox Shariah-legal position and several accounting and taxation-related policies relating to business zakat. The policy prescriptions are expected to rejuvenate and strengthen the global zakat sector.

Revisiting Event Study Designs

A broad empirical literature uses event study research designs for treatment effect estimation, a setting in which all units in the panel receive treatment but at random times. We make four novel points about identification and estimation of causal effects in this setting and show their practical relevance. First, we show that in the presence of unit and time fixed effects, it is impossible to identify the linear component of the path of pre-trends and dynamic treatment effects. Second, we propose graphical and statistical tests for pre-trends. Third, we consider commonly-used static regressions, with a treatment dummy instead of a full set of leads and lags around the treatment event, and we show that OLS does not recover a weighted average of the treatment effects: long-term effects are weighted negatively, and we introduce a different estimator that is robust to this issue. Fourth, we show that equivalent problems of under-identification and negative weighting arise in difference-in-differences settings when the control group is allowed to be on a different time trend or in the presence of unit-specific time trends. Finally, we show the practical relevance of these issues in a series of examples from the existing literature, with a focus on the estimation of the marginal propensity to consume out of tax rebates.

The Impact of Tax Rebate on Used Car Market: Evidence from Thailand

AbstractTax incentives are one of the most important fiscal tools at the government's disposal that can be used to influence the economy. Often, policies are targeted to spur investment in durable goods. In this article, we focus on the impact that a primary‐market tax incentive has on the secondary market for durable goods – specifically, the automobile market. Using a first‐car tax rebate scheme implemented in Thailand in 2011 as a natural experiment, we find that the policy reduces the listing prices of used cars in the tax‐eligible category by 6.75% to 10.31%.

Nursing.standard.com.

1 Nurses who have taken part in Widening Access Training scheme courses may be eligible for national insurance and tax rebates. One nurse received a rebate of £6,000, according to Moneysavingexpert.com . Read more: rcni.com/tax-rebate.

Nurses' tax rebate claims on the rise.

Last week Nursing Standard reported on how potentially thousands of nurses and other healthcare staff could be in line for rebates if they overpaid contributions while studying on Widening Access Training (WAT) scheme courses.

The Progressive Value Added Tax (Fiscal Policy) As a Tool of Inflation Targeting: The Theory for Inflation: Is a Higher Inflation Target Plausible by Overcoming Most of the Costs of Inflation and Deflation?

Premised upon taxable income the regressive Value Added Tax or Goods and Services Tax through VAT/GST Tax Returns would become progressive in nature with a CPI adjusted cost of living allowance tax credit or rebate that solves the purchasing power of income index and the Fisher Equation allows up to a 15% inflation target without the costs of inflation?

The feasibility of medical office building green upgrades from an owner/lessor perspective

Purpose – The purpose of this paper is to exam the financial impact on the owner/lessor who is considering a partial energy upgrade to an existing medical office building. The owner who leases the building using a triple net lease does the upgrade prior to leasing the building, with the expectation of earning higher rents. How much should the owner who leases the property spend for a given rent per square foot increase? Design/methodology/approach – The empirical study highlights the impact of key financial variables on the dependent variable medical office construction spending put in place in the USA. The independent variables prime interest rate, cost of natural gas per therm and electricity cost per KWH, resale building prices are significant variables when predicting medical office construction spending. A case study using a cost-benefit model is developed. It inputs corporate income tax rates, incorporates a debt service coverage ratio, prime interest rate, analyzes investment tax credit (ITC) and rebate scenarios and varies the level of rental income and energy savings. The case study results provide insight into which factors are enabling higher net construction spending when considering a green energy retrofit project. Both the regression model and the case study model focussed on the owner of a building who rents medical office space to tenants using a triple net lease. The owner/lessor paradigm analyzes revenue enhancements, the tax implications of having these savings and benefits associated with borrowing when financing the green retrofit. The availability of low cost borrowing, increases in the ITC percent and rebates and increases in rent per square foot have an impact on potential energy upgrade spending. Findings – The empirical model finds the independent variables to be significant. Utility cost, resale value of office buildings, the prime interest rate, business bankruptcy court filings and unemployment rate fluctuations adequately explain movements in medical office building spending for the years 2000 through 2015 yielding a R2 of 73.8 percent. The feasibility case study indicates that the energy saving levels and ITCs not income tax rates are the primary drivers for a partial energy retrofit. Research limitations/implications – Market incentives are a function of the cost of energy. If the cost of energy drops, then the profit incentive to conserve energy becomes less important. The role of tax credits, rebates, property tax reductions and government directives, then become primary incentives for installing energy upgrades. The owner of an empty building assumes all of the operating costs normally paid by a tenant under a triple net lease. This possibility was not included in the replacement cost-benefit model used in this paper. Practical implications – The feasibility of doing an energy upgrade to an existing building requires that a cost-benefit analysis be undertaken. The independent variables that are significant when doing a regression model or proxies for these variables are incorporated into a present value model. The results in Table V can be used as an initial template for determining how much to spend per square foot when doing an energy upgrade. The square foot amounts can be applied to different size office buildings. The corporate income tax rate or a personal income tax rate has minimal impact on energy construction upgrade spending. Social implications – More energy efficient office buildings reduce the amount of greenhouse gases released into the atmosphere. Energy efficient buildings also conserve on scarce fuel reserves. ITCs and rebates limit the role of government in directing decisions to do energy upgrades. The market mechanism to some degree can help encourage energy conservation through asset upgrades. Originality/value – The paper incorporates an empirical model which is a form of technical analysis to examine independent variables that explain medical office building spending with a case study structured on expected revenues and costs which takes a fundamental approach to understanding the relationship between the dependent variable and its independent variables. The regression model combines factors that impact the demand for energy efficient medical buildings from an owner/lessor perspective which includes resale values of existing buildings, business bankruptcy filings and unemployment rates. Supply independent variables include the prime interest rate and electricity per KWH and natural gas per therm. The regression model found these variables to be significant. The case study uses the same independent variables or close proxy variables to determine the maximum financially feasible per square foot spending that can be invested in energy upgrades.

Trade policy and industrial policy in China: What motivates public authorities to apply restrictions on exports?

This paper investigates the motives behind China's fiscal policy targeting exports. It relies on detailed data at the product level over the period 2002–2012. We analyze two major export fiscal instruments: export tax and export VAT rebate. Our results suggest that while pursuing many objectives simultaneously, Chinese policy used the two instruments in a complementary way with the aim of achieving their industrial policy and strategic objectives. Some are officially stated objectives such as promoting technology or environmental protection, while others do not appear in official documents, such as subsidizing downstream sectors. We also observed that China managed these instruments dynamically to address temporary shocks, for example to temper rising food price or to support strategic sectors sensitive to price competitiveness in the middle of the financial crisis.

The Anti- Tax Avoidance Legislation and the Operations of Multinational Companies in Ghana: The Way Forward for the Multinational Companies

Many companies seek to minimise their tax obligation through tax planning. Tax planning is a combination of tax avoidance and tax compliance used to exploit the ‘loop-holes’ within the tax laws. Multinational companies, in addition to this, exploit differences in tax jurisdictions through transfer pricing, income splitting and thin capitalisation to their advantage. These practice either to, was consider as tax–avoidance in the past but with the passage of new legislation known as anti-tax avoidance legislation in Ghana in 2015. These activities by Multinational companies: tax rebates, reliefs, exemptions and tax holidays prescribed in the tax laws in order to minimise tax liabilities by the multinational companies are still legal. The paper demonstrates that, despite the new legislation, the multinational companies can still minimize their tax liabilities through the difference in tax rates at different tax jurisdictions using intellectual property. The difference between tax avoidance and tax evasion is a thin line and very grey and care must be taken especially with this anti-tax avoidance legislation passed in Ghana. The paper concluded that, the quest by the multinational companies to maximise their profit through minimising their tax liabilities cannot end with the passage of legislation only, but also through compulsion by tax authorities and enhanced audit regulation and audit practices in the country. This is the only way to assist the revenue agencies to maximise revenue else it will amount to nothing.

Does U.S. Pressure Lead to Changes in China’s Exchange Rate?

:The role of external political pressure in the appreciation of the Chinese renminbi against the U.S. dollar since 2005 has been the subject of debate. While Chinese authorities maintain that only domestic considerations have played a role, whether the appreciation has also been the result of the exercise of international monetary power by the United States has been examined using three different approaches. The results have been contradictory with the weight of studies finding against U.S. pressure having an effect on the exchange rate. In this article, we use Granger causality tests to reexamine the issue using data from 2000–2014. We find evidence that U.S. pressure does Granger-cause renminbi appreciation. We also examine whether U.S. pressure causes the changes in China’s export tax rebates. We find no evidence for this.

The Effect of Income on Subjective Well-Being

This paper uses tax rebate payments from the 2008 economic stimulus to estimate the effect of a one-time change in income on three measures of subjective well-being: life satisfaction, health satisfaction, and affect. The income effect is identified by exploiting the plausibly exogenous variation in the payment schedule of the rebates. Using both ordinary least squares and two-stage least squares estimators, I find that the rebates had a large and positive impact on affect, which is explained by a reduction in feelings of stress and worry. For life satisfaction and health satisfaction, there is weaker evidence of a positive impact.

China’s role and contribution in the global governance of climate change: institutional adjustments for carbon tax introduction, collection and management in China

As global climate change and its adverse effects have caused serious consequences, the Chinese Government is speeding up on energy saving and emissions reductions, becoming much more active on the climate and environment front. According to the work schedule of the Ministry of Finance, construction of the environmental protection tax system is one essential part of the forthcoming green tax reform in China. On 10 June 2015, the Cabinet’s Legislative Affairs Office issued a Draft Environmental Protection Tax Law of the People’s Republic of China (hereinafter referred to as the ‘Draft EPT Law’) to solicit opinions and comments. This action received much attention and prompted discussion both at home and abroad. The Draft EPT Law shows the trend of transforming pollution charges into tax, and starts a green reform in administrative management by means of financial tools. Though the law does not include carbon dioxide with taxable pollutants, it leaves space for future carbon taxation. With the increase of green reform in the future, carbon tax will no doubt be put on the priority list of the Chinese Government, at which point the Government will face three major challenges. First, the current unsatisfactory tax system environment will jeopardize carbon tax. It is necessary to repeal the overlaps between the Draft EPT Law and carbon tax, other energy taxes and non-environmental taxes, and introduce carbon tax into the current tax system without throwing off the order of the overall tax structure. Secondly, in spite of the design of the new tax structure, the administrative organization of tax management remains a very critical problem. It will be necessary to establish an orderly interactive relationship horizontally between the environmental agency and tax agency, and vertically between the central and the local authorities. Thirdly, a new carbon tax will cause economic slowdown in the short term. In addition to offering tax rebates, reductions and subsidies, a system of penalties could offset negative effects and optimize positive outcomes of emission reduction.

Geoeconomics in a globalized world: the case of China’s export policy

This paper explains why and how China seeks to continue to promote export-driven industrialization. This way, it comes as a corrective to the widespread assumption that the Chinese government is readying to rebalance its growth from investment and export to more domestic consumption. But the paper also presents an important case of a largely geoeconomics strategy. What explains China’s quest for industry, it finds, is a quest for economic security, economic competitiveness, and more economic independence from large foreign suppliers of capital, brands, and knowhow. What characterizes the consequent policy, the paper goes on, is an increasingly more sophisticated push for exports. China’s aim in that regard is not to undermine the relatively open global market, but to bend the trade flows into its advantage by means of export credit, tax rebates, and so forth.

Adjusting export tax rebates to reduce the environmental impacts of trade: Lessons from China

Export tax rebates are an important policy instrument for stimulating exports, which many developing countries make use of. However, excessive export tax rebates and inappropriate structural arrangements can lead to over-production in highly polluting industries and cause the environment to deteriorate. This paper, taking China as the study case, tests and verifies the statistical significance of the causal relationship between export tax rebates and pollution emissions. With a computable general equilibrium modeling, the current study further analyzes the effectiveness of export tax rebate adjustments aimed at alleviating environmental pressure for different time periods. It is found that before 2003, export tax rebates primarily promoted exports and boosted foreign exchange reserves, and highly polluting sectors enjoyed above-average export tax rebates, which led to increased pollution emissions. Between 2003 and 2010, the export tax rebate system was reformed to reduce support for the highly polluting export sectors, which led to decreases in emissions. Canceling export tax rebates for highly polluting sectors is shown to be the most favorable policy choice for improving the environmental performance of China's international trade. This study can serve as reference for other developing countries which similarly rely on export tax rebates, so that they can adjust their policies so as to combine economic growth with pollution control.

Renewable energy scenario in India: Opportunities and challenges

Majority of the power generation in India is carried out by conventional energy sources, coal and fossil fuels being the primary ones, which contribute heavily to greenhouse gas emission and global warming. The Indian power sector is witnessing a revolution as excitement grips the nation about harnessing electricity from various renewable energy sources. Electricity generation from renewable sources is increasingly recognized to play an important role for the achievement of a variety of primary and secondary energy policy goals, such as improved diversity and security of energy supply, reduction of local pollutant and global greenhouse gas emissions, regional and rural development, and exploitation of opportunities for fostering social cohesion, value addition and employment generation at the local and regional level. This focuses the solution of the energy crisis on judicious utilization of abundant the renewable energy resources, such as biomass, solar, wind, geothermal and ocean tidal energy. This paper reviews the renewable energy scenario of India as well as extrapolates the future developments keeping in view the consumption, production and supply of power.Research, development, production and demonstration have been carried out enthusiastically in India to find a feasible solution to the perennial problem of power shortage for the past three decades. India has obtained application of a variety of renewable energy technologies for use in different sectors too. There are ample opportunities with favorable geology and geography with huge customer base and widening gap between demand and supply. Technological advancement, suitable regulatory policies, tax rebates, efficiency improvement in consequence to R&D efforts are the few pathways to energy and environment conservation and it will ensure that these large, clean resource bases are exploited as quickly and cost effectively as possible. This paper gives an overview of the potential renewable energy resources in Indian context while evaluating the present status, the energy demand of the country and forecast consumption and production, with the objective to evaluate and assess whether India can sustain its growth and its society with renewable resources.

PTU-294 Responsibility deal: has the uk billion unit alcohol reduction pledge really been achieved? implications for future policy

Introduction A reduction in the overall strength of alcohol products with stable alcohol volumes has the potential to considerably reduce alcohol harm. In 2011 a consortium of alcohol producers and retailers pledged to remove 1 billion units from the market by reducing product strength and on Dec 19 th 2014 the Health Improvement Analytical Team of the Department of Health reported 1 that 1,346 million units were removed from the market between 2011 and 2013. If true, this is a substantial improvement and will be welcomed by those concerned with alcohol harm reduction. Method UK HMRC alcohol clearance (consumption) data 2 over the past 10 years was analysed. Results The reduction in the number of units between 2011 and 2013 has mainly been achieved by reductions in the average strength of beer, which has reduced from between 4.53 and 4.40% in the years 2004 to 2011 to 4.14% in 2013. This accounted for 1.2 billion of the 1.3 billion total reduction. Since there were only minor reductions in the strength of wine and cider while spirit strength increased the evidence suggests that the reduction in beer strength is most likely to have been due to the simultaneous introduction of a 25% tax supplement on high strength and a 50% tax rebate on low strength beers rather than through the operation of the pledge. Conclusion The UK Government should encourage and support the removal of alcohol units from the market by relating duty on all alcohol products more closely to their strength. In particular they should reduce the strength of beer attracting the high strength tax supplement from >7.5% to >5%, apply the high strength supplement to cider >5% and to wine >10%, and apply the tax rebate to cider Alcohol harm currently costs the nation 21 billion pounds per year. A 2.5% reduction in alcohol consumption (1.25 billion units) would lead to a total cost reduction for health, crime and workplace absences of 5.1 billion pounds over 10 years. 3 Thus for a meaningful reduction in alcohol harm there needs to be a much greater unit reduction than currently pledged. Disclosure of interest None Declared. References Responsibility Deal: Monitoring the number of units of alcohol sold. Second interim report, 2013 data:- https://www.gov.uk/government/statistics/units-of-alcohol-sold https://www.uktradeinfo.com/Statistics/Tax%20and%20Duty%20Bulletins/Alcohol1014.xls Making the case for a minimum unit price in England and Wales, Alcohol Health Alliance Briefing Paper 2014

Multi-product firms, product scope, and the policy of export tax rebate

This paper extends the model of Nocke and Yeaple (2014) to analyze the impact of the export tax rebate (ETR) changes on multi-product firms' product scope. In response to ETR changes, firms optimally reallocate their organizational capital, and adjust the intensive and extensive margins of production. We test the model's predictions using firm-level export and ETR data from China. We find that less profitable products, facing larger ETR reductions, and products in which China has a comparative disadvantage, are more likely to be dropped.