Tax Structure Research Articles

Impact of Digital Technologies on Implementing Individual Elements of the Tax Structure

Impact of Digital Technologies on Implementing Individual Elements of the Tax Structure

Distributional Incidence of Indirect Taxation on Consumer Groups in Sri Lanka: A Descriptive Study

This study investigates how the indirect tax burden was distributed among households under different aspects. Sri Lanka's tax structure represents more indirect tax and significantly less direct tax income. Direct taxes satisfy the equity principle of taxation, while indirect tax is violated. Direct taxes are imposed according to the ability to pay. Persons who have a higher income will pay a higher rate of income tax, and persons who have less income will pay a lower rate of income tax. Unlike direct taxes, indirect taxes are paid by both rich and poor persons irrespective of their income level. Thus, the burden of the indirect tax will be badly impacted on poor households because when they purchase goods and services from the market, they pay a significant portion of indirect taxes compared with the average income. A consumer survey was performed, and data were collected using a structured questionnaire under the light of the Stratified Convenient Sampling Method. One hundred fifteen commodity baskets were selected based on the Colombo Consumer Price Index under the broad categories of food and non-food and eleven subcategories of commodity groups. Colombo District was selected as the sample district. Four hundred eighty-two respondents were collected, representing low-income, middle-income, and high-income households. The descriptive and quantitative approach were used for the analysis. The findings of the study emphasized that the indirect tax burden rate of low-income households was significantly greater than the indirect tax burden rate of high-income households. The regressive effect was reflected in the findings, indicating that poor households are bearing a higher indirect tax burden rate in terms of average income and average expenditure. The derived Lorenz Curves and the calculated Gini Coefficients also emphasized the regressive effect of the indirect tax, presenting an upward-sloping Lorenz Curve and negative Gini Coefficient values.

PENSIONS, INCOME TAXES, AND HOMEOWNERSHIP: A CROSS‐COUNTRY ANALYSIS

AbstractThe article studies the role of pensions and income taxes in determining homeownership. We develop a stochastic, overlapping generations model with tenure choice and heterogenous skill types calibrated to Germany. Then, we simulate alternative income tax and pension policy structures from the United States and Australia, since these developed nations have similar incomes per capita, but highly different homeownership rates. Our results highlight that the pension system and its financing have decisive long‐term effects on homeownership. The latter is even more significant than income tax, where labor and capital income taxation affect homeownership in opposite directions.

Taxing Dilemmas: A Decade of Balancing Act in India’s Individual and Corporate Taxation for Social Equity and Economic Progress

India’s tax rates over the past decade have been analyzed to balance social equality, economic competitiveness, and sustained progress. The government’s shift towards flatter tax structures aims to stimulate economic growth and promote manufacturing. However, the adverse effects of lowering corporate tax rates on ordinary citizens include widening income disparities, underfunding of social programs, job security decline, decreased government capacity, and impact on small enterprises. The government’s ability to fund infrastructure improvements, healthcare facilities, and educational programs is greatly impacted by corporate taxes. Small enterprises may experience increased competitiveness and financial strain, while major corporations may profit from lower tax burdens. To ensure a balanced economic trajectory, policymakers must continually evaluate and fine-tune the tax structure, considering the broader implications on social equity and the quality of life for the majority of the population.

Peran Perpajakan dalam Perekonomian Indonesia: Tinjauan Sistem Perpajakan di Indonesia dan Dampaknya Terhadap Pertumbuhan Ekonomi

Taxation is one of the most important fiscal policy instruments, serving as the main source of state revenue and a tool for regulating the distribution of wealth. Taxation acts as the foundation of the economy in Indonesia and significantly influences its growth trajectory. Taxes are an obligation in social life where every level of society must contribute to paying contributions to the state in accordance with the applicable Constitution of the Republic of Indonesia. By analyzing applicable tax policies, this research evaluates the effectiveness of the Indonesian tax system in achieving economic development goals, including the structure and types of taxes in Indonesia, and challenges in implementing the tax system. Apart from that, this study also identifies the impact of taxation on economic growth.

The impact of factor tax structure on firm innovation: evidence from China

ABSTRACT Labor and capital are two of the most fundamental factors of production, and the ratio of labor to capital tax can reflect the structure of factor tax. Despite the existing literature demonstrating the impact of taxation on enterprise innovation, few studies have addressed the effect of changes in factor tax structure on enterprise innovation. Using provincial tax data and listed company data from China between 2006 and 2017, this study empirically tests the impact of factor tax structure on enterprise innovation using the Poisson quasi-linear method. The findings indicate that a higher share of labor tax and a lower share of capital tax tend to inhibit enterprise innovation. Conversely, a higher tax compliance rate for labor tax and a lower compliance rate for capital tax are also unfavorable to enterprise innovation. A non-linear relationship is observed between factor tax structure and enterprise innovation, where a higher share of labor tax and a lower share of capital tax can promote enterprise innovation when exceeding a specific limit. The results of this study have theoretical and practical implications for improving factor tax structure, stimulating enterprise innovation, and promoting economic transformation toward higher quality.

Do tax compliance costs mediate the relationship between the complexity of tax structure and fairness perceptions? Evidence from manufacturers

The phenomenon of tax fairness has been researched in the past with a host of dimensions and determinants. Tax fairness and attitudes towards compliance have majorly been affected by structural factors of taxation, of which a major component is the perceived complexity of the tax system. It has also been revealed by extant literature that compliance costs of taxation are critical indicators of how complex the taxation structure is in an economic system. At the outset, it becomes imperative to understand if the compliance costs of taxation play a role in serving as a causal link between tax compliance costs and fairness perceptions. The study employs a survey approach through a structured questionnaire to elicit responses on tax complexity, compliance costs and tax fairness perceptions. Structural equation modeling shows that there is a significant indirect effect of tax complexity on fairness perceptions through the mediating role of tax compliance costs.

AS THE IMPOVERISHED GET EVEN POORER: AN ANALYSIS ON THE IMPACT OF PHILIPPINE TRAIN LAW TO THE MINIMUM WAGE EARNER

In the Philippines, the TRAIN Law or tax reform for acceleration and inclusion legislation was put into effect in 2018. This law sought to significantly alter the nation's tax structure in order to increase money for poverty alleviation, healthcare, and infrastructure. One of the features of the law was to increase the income threshold below which minimum wage earners would not be required to pay income tax. But it also resulted in higher costs for goods and services, which had an effect on Metro Manila's level of living. This qualitative research examines the significant data and information based on the participant's experiences with the TRAIN law. Semi-structured questions were used in the in-depth interview to facilitate deeper clarification and additional discussion. The results show that the majority of the impact of the law on the poor is related to basic needs like food, for which they must cut their budget in order to survive because there are other expenses to consider, such as utility bills and debts. Moreover, it impacts an individual's emotional and overall health, including mental health concerns brought on by financial difficulties. Additionally, it has an impact on their social interaction because they tend to engage with others less frequently because they are preoccupied with the things that need significant financial outlays. Thus, it may be inferred that the poor income class households' standard of living declined with the introduction of TRAIN law. KEYWORDS: tax reform law, poverty alleviation, minimum wage earner

Discovering the Intriguing Dynamics of Transfer Pricing: Tax Burden, Foreign Ownership, and Company Size

ownership, and company size on transfer pricing practices within the mining subsector of manufacturing companies listed on the Indonesia Stock Exchange from 2018 to 2022. Through purposive sampling, 35 datasets out of a total population of 40 companies were selected for analysis. Multiple linear regression served as the analytical tool, and hypothesis testing was executed using SPSS version 25 software. The findings underscore that both tax burden and foreign ownership wield significant influence over transfer pricing practices. Notably, companies exhibit a propensity to leverage transfer pricing as a strategic tool for tax burden management, particularly in instances of heightened foreign ownership. Interestingly, however, company size does not exhibit a significant impact on transfer pricing practices, suggesting that entities of varying magnitudes within this subsector tend to adopt analogous approaches to transfer pricing policies. These findings are pivotal for both regulatory bodies and corporate managers, as they provide valuable insights into the factors shaping transfer pricing practices. Moreover, the formulation of tax policies geared towards fostering transparency and equity in business operations. By comprehensively understanding the dynamics at play in transfer pricing, stakeholders can navigate regulatory landscapes more adeptly and devise strategies that promote fairness and compliance within the realm of taxation. This study thus contributes to the broader discourse on tax policy and corporate governance, offering a nuanced understanding of the intricate relationship between tax structures, ownership dynamics, and corporate practices within the mining subsector of Indonesia's manufacturing industry.

Is Indirect Taxes Bad for the Poor? Examining the Determinants of Poverty in Pakistan

This study investigates the determinants of poverty in Pakistan from 1985 to 2023, focusing on unemployment, inflation, indirect taxes, secondary school enrollment, and total population as key variables. Employing the Augmented Dickey-Fuller unit root test, the analysis finds that while many variables exhibit non-stationary behavior at levels, they become stationary at first difference, ensuring the reliability of time series analysis. The ARDL Bounds Analysis confirms the significant relationship between poverty and its predictors, indicating that changes in these variables markedly impact poverty levels. The estimated long-run and short-run results highlight the significant roles of inflation, secondary school enrollment, total population, and unemployment in influencing poverty, with diagnostic tests affirming the model's robustness. The study underscores the positive relationship between secondary school enrollment and poverty reduction, advocating for increased investment in education. The analysis reveals that indirect taxes do not significantly impact poverty levels, yet suggests a review of the tax structure to ensure it does not disproportionately burden low-income households. A progressive tax system could aid in wealth redistribution and support poverty reduction efforts. The positive correlation between total population and poverty levels indicates that rapid population growth strains resources and infrastructure, highlighting the need for effective population management strategies, including family planning programs and investments in healthcare and education. Unemployment's significant impact on poverty calls for targeted interventions to create job opportunities. Policymakers should promote economic diversification, support SMEs, and implement active labor market policies such as job training and placement programs. While higher inflation rates are associated with lower poverty levels in this analysis, maintaining inflation within a manageable range is crucial to avoid eroding purchasing power and harming economic stability. The study advocates for continuous and comprehensive data collection to enable timely and evidence-based interventions, enhancing the effectiveness of poverty reduction strategies. Prioritizing inclusive economic growth, fostering an environment conducive to investment, innovation, and entrepreneurship can create jobs and reduce poverty, ultimately supporting sustainable socio-economic development.

Global Perspectives on Fiscal Policy and Labor Income-Leisure Choices: Theoretical and Practical Insights

In macroeconomic literature, fiscal policy is considered a powerful tool to achieve sustainable development, full employment, and social well-being in developed and developing societies. For this, public authority uses expansionary and contractionary tax policies to achieve stable growth and employment environment for the stable labor market. This study theoretically and empirically investigates the problem of inference on income-leisure labor preference. Also, it considers the impact of tax and expenditure structure on labor choices regarding working hours under the assumption of neoclassical theory. We use quantile regression analysis to investigate the data set for worldwide, high, and low-income countries from 2000 to 2022, for the macro-level analysis based on the empirical investigation of 123 countries cross-section panel. The outcomes show that when the fiscal authorities impose a regressive form of taxes, it may hurt the labor wages and distribution of income-leisure preferences or the welfare of labor. Similarly, non-labor income hurts labor utility through a large volume of non-development expenditure. However, when the progressive form of taxes is imposed, it may improve the labor utility. At the same time, on the other side, when fiscal authority disburses the development expenditure, it may support the non-labor income through the provision of public goods and services. For practice, the empirical results of quantile regression show that government expenditure has a positive while tax hurts labor supply. Fiscal policy in low-income countries has provided an alternative outcome

REVIEW PAPER- “A STUDY ON GOODS AND SERVICES TAX (GST)”

Goods and Services Tax is an indirect tax to support and enhance the economic growth of the country. Most of the Developed countries have implemented Goods and Services Tax Bill (GST). However, in India, GST was established in 1999. A committee was set up to design the model of GST. But GST was re-launched on 1 July 2017 by the Indian government. There was a big hue and cry for its implementation. The GST replaced all the multiple taxes which were taken by state and central government. That is why it is said One Nation One Tax which means there is no need to pay any other tax in all over the country. The study systematically reviews the impact of GST in India. The study provides the bibliometric visualization and sentiment analysis of Goods and Services Tax (GST). It was found that the government’s motive of GST was to bring all the citizens of the nation under the tax and to prevent the flow of black money. The Goods and Services Tax (GST) is a type of indirect tax that has replaced various other indirect taxes in many countries, including India. It is designed to simplify the tax structure and make it more transparent. Instead of multiple taxes at different stages of production and distribution, GST consolidates them into a single tax at the point of consumption.

A STUDY ON HOW MICRO, SMALL AND MEDIUM ENTERPRISES IS AFFECTED BY GOODS AND SERVICES TAX.

The goal of the Goods and Services Tax (GST), which went into effect in India on July 1, 2017, was to simplify the tax structure by combining several indirect taxes into one cohesive tax system. The effect of GST on Micro, Small, and Medium-Sized Enterprises (MSMEs) is evaluated in this study. By relieving MSMEs of the hassle of managing several federal and state taxes, the GST system improved their operational efficiency and made tax compliance simpler. Administrative difficulties were decreased via the GSTN interface, which made tax registration and return filing easier. A number of benefits of GST for MSMEs are highlighted by the report, such as the removal of the tax cascade effect, an increase in the threshold exemption for tax registration, better supply chain efficiency, and increased competitiveness. In addition, there have been notable advantages from the formalization of enterprises and the use of technology for tax compliance. But the report also lists difficulties like higher costs associated with GST compliance, more burdensome compliance requirements, problems with cash flow, and difficulties with interstate transactions. This research offers valuable insights into the ways in which MSMEs perceive the impact of GST on their operations, finances, and growth prospects. It employs both qualitative and quantitative methodologies, such as surveys and literature studies. The results imply that, despite the benefits that the Goods and Services Tax (GST) has brought about, MSMEs still face a number of obstacles that require government assistance in the form of streamlined compliance processes and educational materials. All things considered, MSMEs have experienced a mixed response to the implementation of GST, with both noteworthy advantages and difficulties. Maximizing the benefits of this tax reform will need ongoing efforts to improve small business understanding and ease GST compliance.

Advancing Decarbonization Efforts in the Glass Manufacturing Industry through Mathematical Optimization and Management Accounting

This study explores the integration of activity-based costing (ABC) and the theory of constraints (TOC) with carbon tax policies to drive decarbonization in the Taiwanese glass industry. Employing a mathematical programming approach, four distinct models are developed to assess the impact of different carbon tax structures, carbon trading mechanisms, and recycled material utilization on corporate profitability and carbon emissions. The findings reveal that strategically applying ABC and the TOC with well-designed carbon tax policies can effectively incentivize emission reduction while maintaining industrial competitiveness. The models incorporating carbon trading and tax allowances demonstrate the potential for creating win–win situations, where companies can increase profitability by investing in cleaner technologies and processes. This study contributes to the literature on sustainable manufacturing and provides actionable insights for policymakers and industry leaders seeking to implement effective carbon pricing mechanisms that drive economic growth and environmental sustainability in tandem.

IMPACT OF GST ON INDIAN BUSINESSES

The Goods and Services Tax (GST) regime in India, implemented in July 2017, represents a transformative overhaul of the country's indirect tax system. This research paper extensively analyzes the multifaceted impact of GST on Indian businesses across various sectors. By harmonizing numerous central and state levies into a unified tax structure, GST aims to simplify compliance, boost economic growth, and cultivate a common national market. The study delves into the intricate aspects of GST, encompassing its objectives, statutory framework, and implementation challenges. It evaluates the profound implications for diverse business entities, ranging from large corporations to micro, small, and medium enterprises (MSMEs). Key areas of focus include supply chain optimization, pricing strategies, working capital management, and transitional complexities. Furthermore, the paper scrutinizes sector-specific ramifications, shedding light on industries experiencing seismic shifts due to GST, such as manufacturing, services, e-commerce, and real estate. It also examines the role of technology in facilitating GST compliance and the digital transformation catalyzed by this tax reform. Through empirical analysis and case studies, the research paper assesses the extent to which GST has achieved its intended objectives, identifying areas of success and ongoing challenges. It provides valuable insights for policymakers, industry stakeholders, and academics, contributing to the discourse on optimizing the GST framework for enhanced economic competitiveness and ease of doing business in India. Keywords: GST, Indian Businesses, Tax Reform, Supply Chain, Compliance, Digital Transformation, Sectoral Impact, Economic Growth, Policy Implications.

Influence Path Analysis of Coordination between Material and Spiritual Civilization Based on the VAR Model

This paper quantitatively analyzes the degree of coordination between China's material civilization and spiritual civilization by establishing an entropy method-coupled coordination degree model. Based on the quantitative results, indicators of China's 1987-2021 tax policy, monetary policy, and open economy policy are introduced to construct a vector autoregressive model to deeply analyze the dynamic relationship between the level of coordination and these influencing factors from multiple perspectives. It is found that maintaining a robust monetary policy, optimizing the structure of foreign trade and exports, and optimizing the structure of taxation are conducive to further enhancing the level of the degree of harmonization between China's material and spiritual civilization, and promoting the high-quality development of China's modernization.

Similarity index for estimating tax reform program and its impact on tax revenue

Tax reform in Indonesia begins with implementing self-assessment approach for elevating voluntary tax compliance. We use 16 developed countries' tax structures as a benchmark for measuring Indonesia's tax reform with the Similarity Index. The result of the Similarity Index shows Indonesia Tax Reform fluctuating trend in 40 years, which started at 72,56% in 1980 and ended at 55,84% in 2019. Furthermore, with the VAR model and international trade openness as variable outside the model in our study, we found that GDP per capita, and inflation, altogether with tax reform had created a 20% positive causality impact on tax revenue in the first three years and 5% in the year tenth. Negative causalities impact which shown in the fourth to ninth year is relevant to the declining trend of Indonesian tax reform that we previously measured. Therefore, it is important for the government to critically focus on developing the structure of the direct tax, indirect tax, and international tax after the first three years of period to maintain the positive impact of tax reform for growing tax revenue in the long term.

Impact of GST on Retailers with Reference to Hosur City

Impact of GST on Retailers with Reference to Hosur City

Global Goods and Services Tax: A Macro-Economic Perspective

This article provides a comprehensive analysis of the global implementation of Goods and Services Tax (GST) to understand the diverse GST models adopted and examine their impact on key economic indicators. Through a detailed analysis of GST frameworks in selected countries such as Australia, Canada, India, Maldives, New Zealand and Singapore. The study analyses common trends and differences in tax structures, registration processes and the treatment of exempted goods and services. The findings of the study reveal a consistent pattern of increased tax revenue and GDP growth post-implementation of GST. Additionally, the study explores the impact of GST on trade dynamics, employment levels, foreign direct investment (FDI) inflows and savings rates across these nations. While the impact on inflation varies among the countries. Overall, the findings highlight the importance of well-planned implementation of GST as it is a crucial tax reform contributing to economic growth and stability on a global scale.

Developing Asia's fiscal landscape and challenges

While tax revenues steadily rose in the decades prior to the onset of COVID‐19, they continue to lag well behind high‐income countries and some developing peers. The region continues to rely predominantly on indirect taxes, particularly relatively efficient consumption taxes. However, developing Asia's tax structure is less progressive compared to high‐income countries. Government expenditures on education and health, vital for promoting equitable growth, were comparatively modest. Substantial fiscal policy stimulus in response to COVID‐19, combined with the impact of the downturn on revenues, has severely weakened public finances in many countries. The combination of falling revenues and higher spending during COVID‐19 has markedly widened deficits and caused a further rise in debt levels that were already rising. As the pandemic recedes, governments will need to carefully calibrate fiscal consolidation to safeguard fiscal sustainability while protecting the poor and vulnerable.