Trade Tax Revenue Research Articles

The tax revenue implication of trade liberalisation in sub‐Saharan Africa: Some new evidence

AbstractDespite the advent of trade liberalisation, trade taxes still remain a key source of tax revenues in sub‐Saharan Africa. Further trade reforms in the form of the African Continental Free Trade Area could, however, hinder output growth in the region if these reforms lead to a decline in total tax revenues. Motivated by this conundrum, this paper investigates the impact of trade liberalisation on tax revenues across a panel of sub‐Saharan African countries. The results indicate that trade liberalisation is associated with an increase in total tax revenues. Also, the reduction of import and export duties significantly increases and decreases domestic and trade tax revenues, respectively. In addition, greater urbanisation is associated with an increase in total tax revenues, while inflation decreases tax revenues.

A systematic review of the extent of the Taliban and FARC’s involvement and profit from drug trade and methods of estimating income from the drug trade

ABSTRACT The drug trade has garnered significant attention as a critical funding source for various terrorist organisations. This systematic review summarises the existing empirical knowledge about the Taliban and the Revolutionary Armed Forces of Colombia’s (FARC) involvement, and profit from the drug trade, and methods of estimating drug trade revenue. Thirty-one studies were identified. Twenty-three about the Taliban, seven about the FARC, and one about both groups. Estimates of annual profit varied from US$19 to US$500 million for the Taliban and US$140 to US$3.5 billion for the FARC. Fourteen of the twenty-four studies about the Taliban provided an estimate and merely six studies discussed the methods used to generate those estimates. Among the eight studies about the FARC, four provided an estimate but one described the method employed. Studies used a variety of information sources. The review shows the need for caution regarding existing estimates and a more methodologically rigorous analysis of linkages.

ECONOMIC CHARACTERISTICS OF AZERBAIJAN'S FUEL AND ENERGY RESOURCES AND ANALYSIS OF THE ECONOMIC-ECOLOGICAL SITUATION

Azerbaijan attracts attention as a country with rich energy resources. This study analyzes the economic characteristics of Azerbaijan's fuel and energy resources and the economic-ecological situation of these resources. Azerbaijan's oil and natural gas reserves have contributed greatly to the country's economic growth. While oil and natural gas production accounts for a large share of foreign trade revenues, the energy sector has increased employment and stimulated industrial growth. However, this growth in the energy sector has also brought environmental impacts. Oil and natural gas production has led to environmental problems such as depletion of natural resources, water pollution and air pollution. At the same time, excessive dependence on energy resources has made Azerbaijan vulnerable to fluctuations in international energy prices. This study examines Azerbaijan's energy policies and environmental sustainability efforts, emphasizing the importance of using energy resources more sustainably. Azerbaijan should focus on policy changes and investments to direct its energy sector in a way that protects the environment and sustains economic growth. This requires striking a balance that aims to minimize environmental impacts while preserving the long-term economic benefits of energy resources. Keywords: Azerbaijan, Fuel and Energy Resources, Economy, Ecology, Analysis, Oil, Natural Gas, Economic Growth, Environmental Impacts.

Trade and Climate Mitigation Interactions Create Agro‐Economic Opportunities With Social and Environmental Trade‐Offs in Latin America and the Caribbean

AbstractThe Latin America and the Caribbean (LAC) region plays key roles in both meeting global agricultural demands and maintaining carbon sinks due to its abundant land and water resources. In this study we use the Global Change Analysis Model to evaluate the opportunities and challenges posed by two global‐scale drivers: agricultural market integration (i.e., reduction of trade barriers) and land‐based climate mitigation policy. We evaluate their potential individual and combined impacts on agricultural production and trade revenues across LAC's economies through mid‐century, as well as the resulting impacts on agricultural consumers and integrated land‐water‐climate systems across LAC's diverse sub‐regions. Increased global market integration results in increased agricultural production and trade revenues for many LAC economies, driven by their evolving comparative advantages. Climate mitigation measures on CO2 and non‐CO2 greenhouse gases increase revenues due to increased agricultural prices from land competition and emissions abatement. The combined outcomes from both drivers are complex and sometimes non‐linear, highlighting the importance of understanding the interactions between multiple drivers. Our results show that increased agricultural production and trade opportunities, from either of the two drivers, pose significant trade‐offs that require careful multi‐sectoral planning, such as emissions reduction challenges, potential loss of livestock production when pursuing land‐based climate mitigation strategies, increased consumer expenditures, and changes in land‐use or water withdrawals, resulting in deforestation or water scarcity pressures. There is considerable heterogeneity in economic and environmental outcomes across LAC sub‐regions and agricultural commodities, illustrating the value of considering outcomes at finer scales.

Effect of the Shadow Economy on Tax Reform in Developing Countries

The present analysis has examined the effect of the shadow economy on tax reform in developing countries. The first type of tax reform is the “structural tax reform” (STR) characterized by large episodes of tax revenue mobilization, identified by Akitoby et al. (2020) [Tax revenue mobilization episodes in developing countries, Policy Design and Practice 3: 1–29] using the narrative approach that allows obtaining the precise nature and exact timing of major tax actions in several areas of tax policy and revenue administration that truly led to increases in tax revenue. The second type of tax reform is referred to as “tax transition reform” (TTR) and reflects the reform of the tax revenue structure that involves the reduction of its dependence on international trade tax revenue at the benefit of domestic tax revenue. The analysis has used various estimators and shown that the shadow economy reduces the likelihood of STR (notably in low-income countries), including in several tax policy areas and in the revenue administration area. The shadow economy also undermines the TTR process in countries whose tax revenue structure is strongly dependent on international trade tax revenue. Finally, it fosters the TTR process in countries that enjoy greater trade openness.

Effects of the Tax Transition Reform on the Real Exchange Rate through the Trade Openness Channel in Developing Countries

International financial institutions have advised developing countries to implement a reform of their tax revenue structure to reduce their dependence on international trade tax revenue, for the benefit of domestic tax revenue. This study examines the effect of this type of tax reform on the real exchange rate through the trade openness channel. It defines tax reform (also known as "tax transition reform") as a process that involves the convergence of developing countries' tax structures toward the tax structure of developed countries (given the weak dependence of the latter's tax structure on international trade tax revenue). The analysis is conducted using an unbalanced panel dataset of 107 countries from 1980-2019, and the two-step system-generalized method of moments approach. The findings show that tax reform causes real exchange rate depreciation, with the magnitude of this effect being higher in developed countries than in developing countries. Furthermore, the real exchange rate depreciation effect of the tax reform is higher in countries with greater trade openness and a tax structure that is less dependent on international trade tax revenue.

Trade costs and tax transition reform in developing countries

AbstractDeveloping countries are striving to reform their tax revenue structure to reduce its dependence on international trade tax revenue. The present study has investigated the effect of trade costs on this type of tax revenue structure reform (also referred in the present analysis to as ‘Tax transition Reform’—TTR) through the trade openness channel in developing countries. The analysis has used a set of 124 countries over the period from 1996 to 2019 and several econometric estimators. It shows that higher overall trade costs (notably non‐tariff costs) undermine the TTR process, notably in countries that enjoy high degrees of openness to international trade. In other words, countries that wish to pursue their TTR process, while concurrently further opening up their economies to international trade, have to reduce their trade costs.

Comparing economic model predictive control to basic and advanced regulatory control on a simulated high-pressure grinding rolls, ball mill, and flotation circuit

Mineral processing plants remain nowadays infamous for their low energy efficiency. Economic model predictive control (EMPC), by directly considering the energy costs, could possibly help reduce their footprint, but its environmental benefits are yet to be clearly quantified. In an attempt to cast some light on this topic, this paper compares the response to a given ore feed size and hardness disturbance sequence of an EMPC to that of basic and advanced regulatory control systems using the profits and the specific energy (power draw/ore feed rate) as metrics. The simulated circuit comprises a high-pressure grinding rolls (HPGR), a ball mill, and a flotation circuit. It is based on population balance modeling and is an extension of previous works. The basic regulatory control (BRC) system comprises only single-input–single-output control loops with proportional–integral (PI) controllers and operates at a fixed feed rate. The advanced regulatory control (ARC) system consists of PI controllers maximizing the plant feed rate with override constraint handling. The results show that (1) ARC generates more revenue and maintains a lower circuit specific energy consumption than BRC, (2) ARC can produce the same economic performance as EMPC because the constraints of the system define the economic optimum, and (3) EMPC can trade revenues for a lower circuit specific energy with a hybrid criterion that penalizes power draw.

Impact of Free Trade Area on Trade, Revenue and Welfare in Nigeria

This study offers an analytical evaluation of the effects of Free Trade Area (FTA) agreements on trade, revenue, and welfare in Nigeria. The study applied World-Integrated Trade Solution/Software for Market Analysis and Restrictions on Trade (WITS-SMART), anchored on a partial equilibrium model (PEM) for its simulations. The study simulated 100% tariff elimination on selected products under Harmonized System (HS)-2 classification code sourced from Trade Analysis Information Systems (TRAINS) and Common Format for Transient Data Exchange (COMTRADE). The study’s findings show that the African Continental Free Trade Area (AfCFTA) agreement will benefit Nigeria’s economy from trade creation estimated at US$8,860.419 million, including a favorable welfare gain to the value of US$740.571 million. Nevertheless, Nigeria will sustain losses in trade revenue, valued at US$6,142.061 million. The study recommends proficient revenue management and well-diversified revenue collection sources, such as improvement in Value Added Tax and Ad-Valorem duty, to cushion the effects of the revenue loss resulting from tariff elimination in the FTA. JEL Classification F1, F2, F4, F5, F6, I3

Effect of Tax Structure Reform on Public Debt in Developing Countries

Abstract To reduce their public revenue dependence on international trade tax revenue, policymakers in developing countries have engaged (with the assistance of international financial institutions and bilateral donors) in the reform of their tax revenue structure, with a view to reducing their public revenue dependence on international trade tax revenue. This reform (referred to as tax reform) is particularly important given the ongoing unavoidable trade liberalization that sooner or later further erode international trade revenue. Using an unbalanced panel dataset of 127 countries over the period 1980–2019, and the two-step system generalized method of moments, the present article investigates the public debt effect of this tax reform. The empirical analysis has shown that a greater extent of tax reform helps to reduce public debt, with the magnitude of this negative effect being larger in countries with a high share of non-resource tax revenue in public revenue. In addition, the public debt reduction effect of tax reform is larger, the greater is countries’ share of international trade tax revenue in non-resource tax revenue. This analysis has important policy implications. (JEL codes: H63, H10, and H20)

A Marshall Plan for the 21st century: Addressing climate change in the Asia-Pacific through diplomacy, development, and defense.

The inevitable climate challenges facing the Asia-Pacific territory require a massive whole-of--government approach comparable to the Marshall Plan of 1948. While many political leaders have called for such a plan, no policy currently exists for this region or purpose. With nearly eight trillion dollars in trade revenue passing through crucially strategic straits daily, seven of the 10 largest militaries in the world (five of which are nuclear capable) operating throughout this territory, and a forecast for nearly exponential population growth, the geopolitical provenance of the United States (US), ties inextricably to this portion of the globe. A document analysis assessing existing diplomatic, developmental, and defensive policies concludes that a modern-day Marshall Plan for the 21st century Asia-Pacific is achievable by realigning lines of effort within current frameworks. As long as the US continues to deny climate change, other nation-state actors within the area will rise to fill the void. The US must commit to the funding, development, and proliferation of clean and sustainable energy solutions, which evolve past current fossil-fuel reliant technologies and, most importantly, be open-source in description and shared with other large polluters throughout the world. Finally, the nations of the Asian-Pacific realm should contemplate a theater-specific treaty organization. As climate change threatens to destabilize the region, a unified force intent on providing stabilization efforts, preventing internal conflict and escalation, and enforcing international law deserves consideration and deliberation.

Investigating the Country of Origin and the Role of the .eu TLD in External Trade of European Union Member States

The Internet, and specifically the World Wide Web, has always been a useful tool in the effort to achieve more outward-looking economies. The launch of the .eu TLD (top-level domain) in December of 2005 introduced the concept of a pan-European Internet identity that aimed to enhance the status of European citizens and businesses on the global Web. In this study, the countries of origin of websites that choose to use the .eu TLD are investigated and the reasoning behind that choice, as well as its relation to each country’s economy and external trade are discussed. Using the Web as a tool, information regarding a vast number of existing .eu websites was collected, through means of Web data extraction, and this information was analyzed and processed by a detailed algorithm that produced results concerning each website’s most probable country of origin based on a multitude of factors. This acquired knowledge was then used to investigate relations with each member-state’s presence in its local ccTLD, its GDP and its external trade revenue. The study establishes a correlation between presence in the .eu TLD and external trade that is both independent of a country’s GDP and stronger than the relation between its local ccTLD presence and external trade.

Do Smart Cities Technologies Contribute to Revenue Performance? Evidence from U.S. Local Governments

There is an increasing trend among local governments in the United States and elsewhere in the world to adopt smart cities technologies (SCT), but the question remains: Do these technologies contribute to government revenue performance? Drawing on the digital-era governance (DEG) literature for theoretical context, this article investigates the effects of commitment to, engagement with, and barriers encountered with SCT on government revenue performance. The effects are examined using performance data obtained from the 2016 International City/County Management Association (ICMA) Smart Cities Survey and the U.S. Census Bureau. The ordinary least squares (OLS) regression results provide empirical support to the assertion that higher engagement with SCT contributes to government revenue performance. Overall, we find that SCT contribute to local retail trade revenue collection efforts and health care and social assistance revenue of establishments in a local government area. The article offers policy implications on how local governments can improve their revenue performance using SCT that contribute to important public values such as timeliness, productivity, efficiency, effectiveness, and government competitiveness, as well as benevolence and human dignity.

IMPACTS OF COVID-19 ON TAX REVENUES AND CHANGES IN TAX POLICY IN AZERBAIJAN

The state's tax collection capacity is falling due to the economic downturn, and the pandemic's negative financial repercussions are reflected in government revenues. Among the essential features that demonstrate the study's importance are measuring the influence of taxation on the state in both pandemics and similar global crises, examining the state's actions, and anticipating the post-pandemic condition. The study aims to investigate tax policy's activities during the pandemic, assess the efficiency of tax incentives using worldwide data, and identify the state's response in times of crisis. The effects of Covid-19 on tax revenue and changes in tax policy in Azerbaijan will be discussed in this article. Because it is written in an academic style, readers will quickly understand the essay. The jargon and terms used are mainly from economics. The Covid-19 epidemic has significantly impacted human health, mobility, spending, trade, employment, production, and tax revenues. The loss in economic activity, on the one hand, and the tax reductions implemented to mitigate the consequences of the pandemic, as well as the elongation of the tax return and payment periods, resulted in considerable reductions in state tax collections. It is critical for Azerbaijan, where indirect taxes constitute the majority that the measures used to combat the epidemic are mostly spending-restrictive. The scientific works of numerous local and foreign writers reflect examining the epidemic period of state tax policy in Azerbaijan. Examples include Kalbiyev YA, Garayev IA, Bulut C., Suleymanov E., Allahverdiyev D. I., Shamil A. F., Rasul S. F., Kocherbaeva AA, Koshoev Ch. M., Manushin D. V., Rasulev AF, Voronin SA, and others. This study aims to learn more about the effects of Covid-19 on tax revenues and policy changes in Azerbaijan. Concerns persist that the Covid-19 outbreak, which poses a public health hazard, would trigger a global economic crisis. Efforts to prevent the virus's spread through social distancing measures harm economic activity and revenues, reflecting tax revenues. On the one hand, the decrease in Azerbaijan's economic activities resulted in significant reductions in the state's tax revenues; on the other hand, the tax reductions implemented to mitigate the effects of the epidemic, as well as the extension of the tax return and payment periods, resulting in a temporary decrease in tax revenues. The epidemic's economic costs can be reduced by temporarily suspending tax collections. Expansionary fiscal policy measures, which lessen the tax burden on businesses while also directly supporting the enterprises and persons most impacted by the epidemic, aid in maintaining investment levels and overcoming economic difficulties. Furthermore, the extension of tax returns and payment periods for individuals and enterprises badly affected by the epidemic gives additional liquidity and lowers company failures. This article examines Covid-19 and its implications on tax receipts and changes in Azerbaijan's tax policy. In addition, the study examines specific vital procedures and policies to adopt to maximize Covid-19's favorable effects on tax collections and tax policy. The study's focus is on the state's tax policy in the case of a pandemic and the system of steps implemented to strengthen financial security in this area. The dissertation's focus is on the design of budget expenditures related to the activities and maintenance of education, medicine, social safety, social security, youth, sports, and other socio-cultural organizations in state tax functions. The study examined the tax policy enacted during the coronavirus epidemic using normative-legal actions, specialized literature, and directions. The ideology of the implemented tax policy, detailed systematic approach, structural-functional analysis, economic theory, social, economic, strategic, and financial management, management decision-making theory, and other content from the scientific-theoretical foundation of the study. Several themes were addressed, including morphological analysis and synthesis of tax policy, multi-criteria decision-making methodologies, and expert assessment. The data on the consequences of tax policy measures during the study in the local database is inadequate. Despite the strategic importance of tax policy in Azerbaijan during the coronavirus pandemic, professional perspectives and scientific studies based on analytical analysis are scarce. Each of the proposals and theoretical developments presented here will aid in analyzing tax revenues in Azerbaijan following Covid-19 and the implementation of specific measures to boost them. An examination of the influence of the Azerbaijani entity on tax revenues during the epidemic and changes in tax policy was conducted based on the study's key provisions, recommendations, and findings. It can be utilized to improve Azerbaijan's and the region's social development by assessing changes in tax policy. The ideology of the implemented tax policy, detailed systematic approach, structural-functional analysis, economic theory, social, economic, strategic, and financial management, management decision-making theory, and other content from the scientific-theoretical foundation of the study. Several themes were addressed, including morphological analysis and synthesis of tax policy, multi-criteria decision-making methodologies, and expert assessment. Keywords: budget, anti-crisis, state, pandemic, tax.

Article: Uganda’s Tax System: Key Challenges and Prospects for Improvement

Most studies on tax research have focused on the developed countries, and those on developing countries concentrate on subjects of general application. As a result, research on many aspects of tax applicable to low-income countries (LICs) has been neglected. By presenting an in-depth analysis of Uganda’s tax system, this study seeks to address this gap. The authors analysed panel data spanning over seventeen years to identify the key system gaps. The findings revealed that Uganda’s tax system conforms to the generally accepted international standards, and its economic performance during the period was above the regional sub-Sahara Africa (SSA) average. However, tax revenue performance still remains poor. The main reasons include: unrealistic tax expenditures, corruption, poor governance, low tax morale, overdependence on international trade tax revenues, and structural system weaknesses. To address those challenges, mitigation measures including creating a firm and all-inclusive political settlement; enforcing anti-corruption measures; streamlining the tax system to eliminate system inefficiencies; and systematically formalizing the agricultural and informal sectors to widen the tax base are proposed. It is hoped that the findings provide valuable insights to tax policymakers in formulating policies for improving revenue performance in Uganda and related LICs. Uganda, taxation, tax system, tax reform, tax challenges, revenue mobilization, revenue performance, low-income countries, corruption, political settlement.

The India–EU FTA and Its Potential Impact on India’s Dairy Sector: A Quantitative Analysis

The present study attempts to quantify ex-ante the impact on trade flows, revenue and welfare of the India–EU FTA on India’s dairy sector. In light of the fact that the EU is the world’s largest exporter of dairy products and India’s dairy sector is highly protected, it is important to assess the potential impact that an FTA with EU can have on this sector. Using a partial equilibrium set-up, our simulation results reveal that the estimated increase in India’s imports of dairy products is mainly driven by trade creation rather than trade diversion, implying that the FTA does not promote inefficient dairy trade at the cost of other countries outside the trade bloc. We augment our analysis using the gravity model to estimate the potential increase in dairy sector imports due to trade liberalisation. PPML estimates suggest that a 10% decline in tariff rates leads to a 3.4% increase in the value of imports. While the estimated increase in dairy imports is significant, our analysis indicates that the increased value of imports, expressed as a fraction of India’s domestic output of dairy products, would still be less than 1%. JEL Codes: F13, F14, F17

Timmermans’ dream: An electricity and hydrogen partnership between Europe and North Africa

Because of differences in irradiation levels, it could be more efficient to produce solar electricity and hydrogen in North Africa and import these energy carriers to Europe, rather than generating them at higher costs domestically in Europe. From a global climate change mitigation point of view exploiting such efficiencies can be profitable, since they reduce overall renewable electricity capacity requirements. Yet the construction of this capacity in North Africa would imply costs associated with the infrastructure needed to transport electricity and hydrogen. The ensuing geopolitical dependencies may also raise energy security concerns. With the integrated assessment model TIAM-ECN we quantify the trade-off between costs and benefits emanating from establishing import-export links between Europe and North Africa for electricity and hydrogen. We show that for Europe a net price may have to be paid for exploiting such interlinkages, even while they reduce the domestic investments for renewable electricity capacity needed to implement the EU's Green Deal. For North African countries the potential net benefits thanks to trade revenues may build up to 50 billion €/yr in 2050. Despite fears over costs and security, Europe should seriously consider an energy partnership with North Africa, because trade revenues are likely to lead to positive employment, income, and stability effects in North Africa. Europe can indirectly benefit from such impacts.

The Impact of Trade Openness on Trade and Tax Revenues in Nigeria (1981-2018)

The challenge to provide enough resources to fund infrastructure development has been the bane of most developing countries like Nigeria. The appropriate economic and trade policies to deploy to increase revenue generating capacity of the government become compelling. This study examined the impact of trade openness on trade and tax revenue in Nigeria between 1981 and 2018. The study employed Augmented Dickey Fuller and Phillip Peron tests to conduct the stationarity tests. Akaike Information Criterion and Final Predictor Error provided the best lag lengths. Johansen cointegration test was used to determine the long run relationship. The study employed Vector Error Correction Model for the regression analysis while T- test and F test were also done to confirm the statistical significance of the variables and the models. For autocorrelation problem, Breusch-Godfrey serial correlation LM test were conducted and other post- estimation tests were also used. The result of the study showed that trade openness was negatively related with total tax revenue and with trade tax revenue (CED). The results indicate that a unit increase in trade openness leads to 11.58% decrease in trade revenue from CED and 13.69% decrease in total revenue. Trade openness as a policy to increase tax revenue was not beneficial to the country. Trade openness should be adopted with manufacturing and productive sector orientation in mind. In addition, tariff rates should be reviewed, and the tax structure should be transparent, and judicious use of tax resources should be implemented by government.

A Case Study of the Impact of Human Resources on Trade Revenues

The quantative and qualitative features of human resources impact the revenue of retail chains. The article’s target of research are ten retail chains with the highest revenue. These are Kaufland Bulgaria, Lidl Bulgaria, Metro Cash & Carry Bulgaria, Billa Bulgaria, Technopolis Bulgaria, Fantastiko, Technomarket Bulgaria, Maxima Bulgaria (Т Market), Zora М.М.С and Praktiker Retail. The subject of research is the quantitative impact of human resources on revenue. The purpose is to outline the trends in employment of human resources and to reveal the quantitative influence of employees’ number and productivity on the revenue and the bottom line of retail chains. The research period is from 2016 to 2018.

Tax evasion; public and political corruption and international trade: a global perspective

PurposeThis study aims to examine the significance of public/political corruption; trade tax revenue (import and export) on tax evasion in a group of 140 countries for the period 2008–2017. Sampled countries were subsequently grouped into four clusters for further testing. With the increase in globalization and technology, there is a potential of increased tax corruption on trade tariffs revenue activities.Design/methodology/approachThe empirical testing was carried out using the technical and more advanced dynamic two-step system-generalized moment method. The econometrical method solves the problem of autocorrelation and heteroskedasticity on cross-sectional data. This study used the data from World Bank, Transparency International, World Economic Forum and Kaufmann’s governance indicators.FindingsThere is statistical interaction between the corruption perception index (CPI) and international trade activities. Moreover, other results revealed that CPI and trade tax revenue activities are statistically insignificant to tax evasion in three groups; low corrupt countries, high corrupt and trade surplus countries although the coefficient signs remain consistent. This can be attributed by a low level of corruption in the low corrupt countries or concealment of corruption-related information in high corrupt countries and the low level of import evasion in trade surplus countries.Originality/valueBased on the theory and results, public and political officials should promote good corporate governance by strictly monitoring trade revenue activities because parties involved can use technical criminality to conceal illegal behavior. Additionally, all jurisdictions should apply the economic theory of crime, especially in high political corrupt countries and perennial trade deficit countries because key macroeconomic tax revenue activities such as imports invite numerous forms of dishonesty.