Theory Of Taxation Research Articles

Yusuf Al-Qaraḍāwī's Theory of Zakat and Taxes and Its Relevance to Zakat and Taxation Law in Indonesia

Yusuf Al-Qaraḍāwī's Theory of Zakat and Taxes and Its Relevance to Zakat and Taxation Law in Indonesia

Imām al-Māwardī’s View on the Concept of Taxation (Kharaj) in al-Aḥkām Sultḥāniyyah

Throughout the course of history, spanning centuries, taxation (kharāj) as sources of income of the state is significantly influential in the development of Islamic civilization. Within Islamic civilization, various principles governing the fundamental aspects of the state system, specifically in finance (fiscal and monetary) are formulated. The policy regulating state finance, with a particular focus on taxation, serves as evidence of the foundational principles of Islamic governance aimed at achieving justice and welfare for the people. The state taxation system arose due to the expansion of Islamic territories and the acquisition of spoils of war obtained by Muslims, whether through peace treaties (fay’) or warfare (ghanīmah). Therefore, this research aimed to analyze the concept of taxation in Islam, with a particular focus on al-Aḥkām as-Sultḥāniyyah by Imām al-Māwardī. The conclusion drawn was that the theory of taxation had several advantages; firstly, the thoughts of Imām al-Māwardī regarding taxation were forward-looking, specifically in terms of the flexibility in determining the tax object by adapting it to the conditions of the tax object and subject. Secondly, the imām's conceptualization of taxation remained highly contextual, making it relevant for contemporary application.

Comparing ad valorem and specific taxes with corporate social responsibility

AbstractThis paper examines the welfare ranking of indirect tax systems with corporate social responsibility (CSR) in a duopoly. Findings show that the two firms' cost and CSR asymmetries both play important roles. If the cost‐efficient firm has a higher CSR level, the standard result in traditional tax theory is sustainable. Namely, ad valorem tax (specific subsidy) policies are considered superior to specific tax (ad valorem subsidy) policies. However, if the cost‐inefficient firm has a significantly higher CSR level, the standard result is reversed. This result remains robust in an oligopoly model or under a tax revenue constraint.

Efficiency and Incidence of Taxation with Free Entry and Love-of-Variety Preferences

We develop a theory of commodity taxation featuring imperfect competition along with love-of-variety preferences and endogenous firm entry and exit. We derive new formulas for the efficiency and pass-through of specific and ad valorem taxes. These formulas unify existing canonical ones and feature a new term capturing the effect of variety on consumer surplus. As a proof of concept, we use theoretical formulas to identify love-of-variety preferences in an empirical application. Our welfare analysis shows that the marginal excess burden is sensitive to the estimated love of variety, which overturns classical results on the desirability of ad valorem versus specific taxation. (JEL D11, D21, D91, H25)

Strategies and Public Policies for Economic Recovery Post-Pandemic: The Role of Taxation According to Qualitative Studies

This qualitative synthesis investigates the role of taxation in post-pandemic economic recovery, aiming to provide insights into effective policy strategies. Drawing upon a systematic review of qualitative literature from diverse disciplines such as economics, public policy, and taxation theory, the study explores the multifaceted nature of taxation's impact on recovery trajectories. Methodologically, the research employs thematic analysis to identify key themes and patterns emerging from the literature. The findings highlight taxation's critical role as a revenue-generating mechanism for governments facing fiscal deficits post-pandemic. Moreover, the study elucidates taxation's redistributive function in mitigating income inequality and promoting social cohesion through progressive tax policies. Tax incentives emerge as crucial tools for stimulating investment and innovation, fostering economic dynamism amidst recovery efforts. However, caution is advised against onerous tax regimes that may impede economic growth. Overall, the research underscores the importance of adopting a balanced and forward-thinking approach to tax policy design, considering the diverse needs and challenges facing economies in the aftermath of the pandemic.

Environmental taxes in an emerging economy

Carbon taxes is perceived to be a good instrument for plummeting greenhouse gas discharge in indusrialized nations that have no prevailing transaction arrangements. Up till now most countries of the world have not recognized the role played by carbon taxes in reducing carbon emission. Most emerging economies are doing nothing to reduce carbon emission within their jurisdictions. Thought carbon taxes have been advocated by experts as a veritable tool for reducing carbon yet most government of emerging nations for political reasons have refused to look at this direction. Many political leaders of emerging nations are said to have played to the gallery with multinational corporations and induced by the same who cause environmental pollution without corresponding replishing of host community. This study cogitates the role of environmental taxes as devices for enhancing the environment as well as a channel for raising funds for executing governmental activities. This paper reviews the cases on ecological taxation theories and discuss matters that arise from the implementation of environmental taxes. Similarly it discusses the likelihood of political acceptance of such taxes when they are linked to the goal of economic development. This study recommended a model that future researchers can adopt for further studies.

Does green tax theory affect the environmental sustainability and protection?

Does green tax theory affect the environmental sustainability and protection?

Use and Abuse of the Concept of ‘Excess Burden’ in the Theory of Public Finance

Optimal tax theory assigns two roles to the measure of excess burden, one to compare the costs of alternative tax instruments, the other to measure the deadweight loss of specific tax instruments, which presumably correspond to the welfare costs of their distortionary effects. This paper claims that the deadweight loss provides misleading measures of welfare costs from tax distortions, because it requires to make unverified assumptions to equate costs to distortions and ensure that the deadweight loss is greater than zero. Taxes other than the lump-sum tax and tax-induced changes in relative prices cannot generally be assumed to be distortionary.

Taxation and Socio-Economic Development in Nigeria

The study examined the linkage between taxation and socio-economic development in Nigeria. The study employed a descriptive research design using secondary data collected from various issues of the Central Bank of Nigeria, Planning, Research and Statistics Department, National Bureau of Statistics and Federal Inland Revenue Service bulletins. The study focused on a five year time series study from 2017 – 2021. The study was anchored on the socio-political theory of taxation and the study methodology involved the review of extant literature on two groups of taxes: oil and non-oil taxes and how they are used to bring about socio-economic development proxied by GDP expenditure at constant purchase prices. The review revealed that tax revenue had positive relationships with socio-economic development, but they are grossly inadequate to meet up with GDP expenditures. The study concluded that tax revenues are under generated in relation to crude sales. It was recommended that among others that the government should engage in a complete re-organization of tax administrative machinery to reduce poor documentation of tax receipts, incidence of tax evasion and avoidance to the barest minimum to improve tax revenue and bring more taxpayers into the tax radial in order to enhance socio-economic development.

屛谷 權榘의 均賦論 고찰

This paper examines the theory of equitable taxation shown in 『Jeongsi- gwangyu(政始管窺)』 by ‘Byung-gok(屛谷)’ Kwon Gu(權榘, 1672~1749), a native of Andong. Kwon Gu emphasized the theory of equitable taxation, or ‘Gyunbu theory(均賦論)’ as the most urgent task for the stability of people's livelihoods. ‘Gyunbu(均賦)’ refers to imposing land taxes fairly.
 According to Kwon Gu, the foundation of Gyunbu lies in “personally inspecting the land(田地) and accurately revealing its true state[檢踏實事].” He also placed special emphasis on preventing the harmful influence of corrupt ‘Ajeon’ officers. As countermeasures, he proposed that, firstly, they should require the relevant departments and specialized personnel to handle related tasks while personally visiting the land to understand its true state. Secondly, when measuring the size of the land and rating it, Ajeons should be excluded from that task, and knowledgeable individuals competent at the job should be appointed. Thirdly, if any changes are made, the local government head or town magistrate should personally make a visit and confirm the situation. Fourthly, land registers should be recorded for each category of land and be used as a basis for inspecting the actual land and should be updated to reflect any changes.
 Kwon Gu strongly advocated for government officials to economize the national finances and reduce taxes to lessen the burden on the people and stabilize their lives. In particular, he heavily emphasized the reality that with the people’s lives being in terrible circumstances, a year of famine could cause Joseon to fall beyond repair. Therefore, he argued they should take reference from the concept of Zhu Xi’s ‘Su-bun-gam-bang(隨分減放)’: reducing taxes depending on how much damage natural disasters or famine cause, as well as the system of ‘Jeon-bu-gu-deung(田賦九等)’: collecting taxes depending on the quality of the farmland with said quality ranked into 9 tiers, found in the 『Wu-gong(禹貢)』section of 『Seo-gyeong(書經). He proposed dividing the good years from the bad years, as well as sorting out the severity of disasters into 9 different levels and reducing taxes based on them.

Legal Culture Obligation to Submit Tax Data and Information from Agencies, Institutions, Associations, and Other Parties

Law Number 28 of 2007 and Government Regulation Number 31 of 2012 mandate the provision of tax data by government agencies, institutions, associations and other parties (ILAP) to the Directorate General of Taxes (DJP). Even though criminal sanctions have been regulated, the implementation of these obligations is not optimal. DJP adopted alternative methods, such as a Memorandum of Understanding/MoU, to obtain tax data from ILAP. This research uses a research method that focuses on positive law with the theory of legal certainty by Gustav Radbruch, the theory of authority by Max Weber, and the theory of taxation by Adam Smith. The results of the research show that there is a discrepancy in the implementation of the obligation to submit tax data with positive law and the theory of legal certainty. Steps are needed to create a Memorandum of Understanding/Agreement/MoU up to a Cooperation Agreement by the DJP with ILAP to make the obligation to submit tax data and information from ILAP run smoothly in accordance with the study. theory of authority by Max Weber. To realize legal certainty in these regulations and to increase state revenues in accordance with the study of tax theory by Adam Smith, it is recommended that there be changes to norms in Law Number 28 of 2007 by adding an article regarding the making of a Memorandum of Understanding/MoU/Cooperation Agreement to increase legal certainty. and contribution to state revenue.Keywords: Reconstruction of Obligations; Data Submission; Tax Information; Legal certainty

Optimal Tax Theory for Investment in Human Capital and the Role of Family

Purpose: Parents spend more than half of all education expenditures on children’s education, thus the role of the family cannot be omitted in determining the optimal educational policy. The main aim of the article is to present economic literature on optimal taxation with human capital, focusing on studies concerning the impact of the family (parents) on the investment in children’s human capital. Design/Methodology/Approach: Insights from two workhorses are reviewed: the RAMSEY approach and the MIRRLEES approach. The literature in the field considers two instruments: Income-Contingent Loans (ICL) and Education Subsidies (ES). Results from theoretical and simulation studies are summarized. Findings: Income-contingent repayment loans can improve welfare, whereas the effects of education subsidies may be positive only under some assumptions. Research limitations/Implications: The MIRRLEES approach is a relatively new strand of literature and due to numerically complexity all researches analyze only partial-equilibrium models with simple set-up (without altruistic families/ fertility decisions/ pension systems). Originality/value: The article provides guidance for policymaker and decision-makers regarding optimal higher education systems and financial support systems for students.

Digitalization, Culture, and Taxpayers’ Compliance in Nigeria

This study investigated digitalization, culture, and taxpayers' compliance in Nigeria as the literature shows a paucity of studies on the subject. The study was guided by the economic deterrence theory and benefits theory of taxation (BRTT). Descriptive survey research was adopted. The study population comprised of selected staff at the Federal Inland Revenue Service (FIRS) offices, in Ibadan. three hundred and eighty-four (384) respondents were drawn using the Taro Yamane formula. A selfconstructed questionnaire was administered to the respondents (r=0.821). Data collected were analyzed using descriptive and inferential statistics. Results showed that tax digitization (x=2.98), tax culture (x=2.93), and tax compliance (x=3.05) are good. Results also showed a significant influence of tax digitalization and tax culture on taxpayers’ compliance (F=22.551, p < 0.05). Tax digitization (Beta = .095; t = 1.798) has a positive influence on taxpayer's compliance, while tax culture (Beta = -0.344; t = -6.546), has a negative influence on taxpayer's compliance. The study recommend that the government should consider adopting a tax policy that would facilitate tax digitalization, tax education, sensitization to promote tax culture, and the inclusion of e-transactions taxation in the tax laws.

Economic interests, taxation and justice

Methods. During the research, the following methods were used: logical and historical – when studying the evolution of thinkers’ views on the concept of justice in the context of taxation; abstraction – when defining the category «justice in taxation»; dynamic series – when determining modern trends in the dynamics of tax revenues to the state budget; general and specific – when comparing the taxation structure of some countries, which distinguish the creative economy from other types of economic systems; analysis and synthesis – when forming a categorical series of related concepts. Results. The article defines the role of social justice as one of the fundamental principles of taxation in ensuring tax modernization of Ukraine. The contradictory nature of concepts of justice applied in the field of taxation was revealed, the concept of «justice in taxation» was defined. Modern trends in the dynamics of tax revenues to the state budget of Ukraine are singled out, their structure is presented in both absolute and relative dimensions. A comparison of the positions of Ukraine in terms of the structure of collected taxes with the OECD countries was carried out. It was concluded that the structure of tax revenues of our state reflects the world trend regarding the spread of VAT, but the share of collected taxes on consumption in Ukraine is higher, while the share of taxes on income is lower compared to OECD countries. It is emphasized that the best theory of taxation needs effective implementation. Therefore, the development of tax policy should carefully consider the administrative aspect of taxation. Novelty. The role of the principle of justice in the fiscal menu of the times of martial law has been defined, proposals have been made regarding the directions of reforming the taxation system in Ukraine, namely: progressive taxation of the incomes of individuals, elimination or limitation of unequal opportunities for tax evasion and improvement of administration. Practical value. Proposals regarding ways to improve the taxation system in Ukraine in the context of justice can be useful in forming the foundations of the state fiscal policy, as well as forming the perception of the Ukrainian tax system as fair by those to whom it applies.

IMPROVING INCOME GENERATION IN OSUN STATE, NIGERIA: THE IMPORTANCE OF TRAINING TAX PERSONNEL FOR REVENUE ENHANCEMENT

The aim of this study was to estimate the influence of training tax personnel on revenue generation, and also to determine the challenges of tax administration in Osun State, Nigeria. This study used a survey research design and collected data from 320 state tax officials using a structured questionnaire. Data analysis was performed using mean, chi-square, and path analysis. The results show that income generation is positively and significantly associated with tax officer training. This finding suggests that income generation is an indicator of tax officer training. The study also found that limited training programs, outdated manual systems, poor technical integration, lack of qualified personnel, lack of tax culture and taxpayer awareness, and lack of resources are the main challenges of tax administration in Osun State Nigeria. The findings of this study has significant policy implications, training tax personnel improves tax compliance, efficient tax administration, fair and equitable taxation, enhanced taxpayer services, increased revenue generation, and better stakeholder engagement. These implications can contribute to a more effective and trusted tax system, benefiting policymakers, taxpayers, and stakeholders alike. The study offers empirical evidence regarding the revenue structure within the state, serving as a basis for the establishment of effective tax policies. Additionally, this research is unique in its utilization of two theories, namely the diffusion theory of taxation and the human capital theory of taxation, to explore the education and motivation of tax collectors. It also highlights how various stakeholders, including tax administrators, policymakers, and civil society organizations, can benefit from the process of tax policy formulation and implementation.

A Legal Review of the Bounds and Theories of Taxation as a Revenue Pool in Contemporary Nigeria

This paper contextualises a review of literary and legal postulations, including theorems of taxation, the rationale behind its imposition, the conceptual meaning of taxation and revenue, sources of revenue, meaning and conceptualisation of the scope of taxation, an overview of tax administration in Nigeria and forms of taxation in Nigeria. It takes cognisance of the unshakable position of taxation as a panacea for raising the much-needed funds for meeting government’s unending obligations to its citizens. This paper takes a cursory look at the different shades of opinions of legal scholars on the theme of taxation and conducts an expose on the review of the types of taxes chargeable under the Nigerian legal system including the recently introduced hydrocarbon taxes as prescribed by the Petroleum Industry Act 2021. This paper sought to assess and review the limits of opinions and theories of taxation as revenue generation strategic policy in modern day Nigeria and it found that opinions are divided on the effective use of taxes as fund-generating springboard of government and that the various theories of taxation are all at amity regarding the fact that taxes are levied to be paid, not a duty to be avoided or a chore to be loved, it is a mandatory payment, irrespective of the many disincentives for its payment by Nigerian tax payers. It concludes by stating that a government with an efficacious tax policy will have sufficient revenue to meet its obligations and engender tremendous development in its territory and prescribes the need for justiciability of tax payer’s rights to ensue accountability on the side of the government, a systemic harmonization and corroboration from tax authorities and government delegates, in order to achieve an effective tax administration to enhance positive tax compliance.

The Synergistic Benefit Mechanism of Medical and Recreational Marijuana: Economic Gains of Cannabis Taxation based on US Federal Law for Corporate Governance and Sustainability

Purpose: Marijuana legalization is brought about by the demands of people as social utility either for medical or recreation consumption. It is essential that the control of cannabis fulfills the goals of corporate governance and sustainability. This paper aims to measure the profitability of marijuana taxation over a time period as trend analysis of economic gains.
 Methodology: The socio-legal taxation of marijuana in the United States follows a descriptive research design. The beneficial gains of marijuana as medical use created this substance to be controlled under contract law transactions. The removal of cannabis in US Pharmacopeia modified the tort law restriction for legalization of marijuana as recreational consumption. The recreational cannabis taxation together with medical marijuana state taxes are essential to fulfill the 4 pillars of corporate governance and sustainability for strengthening constitutional rights. The legalization of marijuana through votes of the people repeals the criminal punishments imposed by federal law to advocate the synergistic concepts of economic theory.
 Findings: State tax theory creates voluntary principles in transactions together with trend analysis in prices and demands of people resulting to efficiency in mutual gains through lessening the value of participation under a harmful environment. Hence, Pigouvian tax follows the public welfare of medical marijuana and common revenue of recreational cannabis diminishes the overall costs of social consumption. Federal laws control marijuana usage through Pigouvian taxes of medical use with lessened participation in externalities and common revenue in cannabis consumption, as a legalization process of other states in reinstating tort law for business purposes, while still enforcing criminal penalties to remaining states, in compliance with US federal laws, not in favor of medical and recreational marijuana use. The economic theory supports the legalization of medical and recreational cannabis use through taxation as profitable gains by allowing voluntary market transactions of marijuana as fulfillment to corporate governance and sustainability for more allocation of public funds. From 2002 to 2018, medical and recreational cannabis users increased to 70% of social utility through lessening the value of participation, a win-win in efficiency of economic design. In 2010, marijuana taxation generated $8.7 billion as federal public funds, with accompanied criminal penalties to other states.
 Recommendations: Economic theory is a conceptual design supporting the beneficial gains of legalizing marijuana via taxation. This economic design promotes fair responsibility of market gains while still in strict compliance of enforcing criminal punishments to violators. The people’s votes for legalization of marijuana taxation indicates that this economic policy has come by choice in a particular state as constitutional right of either a medical opinion or business ethics. However, cannabis is deemed to be a substance subject for criminal liabilities, similar to other patent drugs under taxation as well. Hence, it is suggested to create artificial intelligence using authorless works for clinical trials and other relevant studies subject to patent law of marijuana use, as advocacy of public welfare and safety since voluntary transactions are apparent harmful environment.

Factors influencing Voluntary Tax Compliance Among Small and Medium sized Enterprises in Kenya

Tax compliance is essential for generating revenue to fund government activities and public services. Despite the efforts of the Kenyan Revenue Authority (KRA), compliance remains a challenge due to factors such as complex tax systems, high compliance costs, and negative taxpayer attitudes. The study examines the factors that influence voluntary tax compliance, including information availability, tax compliance costs, and individual attitudes and perceptions. It delves into tax compliance theories, such as the Contingency Theory of Taxation and the Ability to Pay Theory, shedding light on their impact on organizational behavior and financial performance. Empirical evidence from previous studies is discussed, highlighting the importance of tax education and the perception of tax fairness in promoting compliance. The study also identifies challenges specific to Kenya, such as a complex tax system, high compliance costs, and negative attitudes toward taxation, which hinder compliance, particularly among SMEs. It underscores the efforts made by the Kenyan Revenue Authority (KRA) to enhance compliance but acknowledges the persistence of challenges. The abstract concludes by emphasizing the need for a comprehensive understanding of tax compliance to ensure an equitable and efficient tax system that supports economic growth and national development in Kenya and other developing nations.

Relationship between increased Taxation and Financial Performance of Kenyan Firms

Taxation plays a critical role in financing government activities, public services, and economic development. This study focuses on examining how taxation impacts the financial performance of firms in Kenya. The complex interplay between tax policies and financial outcomes is multifaceted, and understanding these dynamics is crucial for effective tax strategies and financial optimization. The theoretical frameworks of "Ability to Pay Theory," "Classical Taxation Theory," and "Political Power Theory" are explored to provide insight into the relationships between taxation and business performance. These theories help us understand how tax rates, incentives, and political influences can affect firms' profitability, investment, and overall financial performance. By reviewing existing literature and conducting empirical research, this study aims to shed light on the specific challenges and opportunities that taxation presents to businesses in Kenya. The study observed that the influence of taxation on the financial performance of Kenyan firms is significant and multifaceted. Understanding the effects of customs duty, PAYE, and VAT is crucial for informed decision-making and effective management of financial resources in the business environment. Further research should explore the specifics of these impacts and potential mitigating measures.

Modeling of the system of regional indicators of the development of a circular economy

The purpose of the article is to present a methodological approach to modeling the system of regional indicators in the context of the development of the closed-cycle economy. The employed research methods rely on the provisions of economic and statistical analysis, management theory, situational and adaptive approaches in management, system analysis, simulation modeling, the theory of finance and financial markets, and the theory of taxation. The authors emphasize the importance of accounting for such factors as finance, taxation, entrepreneurial infrastructure, and education for the successful implementation of closed-loop economy strategies at the regional level. The results of modeling the system of regional indicators clarify the estimated forecast of the consequences of the adopted managerial decisions in the financial and industrial policy for the introduction of technologies.