Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.1.110
Iu. E. Labunets, I. Mayburov
The problem of low tax revenues and a large shadow sector is relevant to many countries and industries, and the forestry industry in Russia is no exception. This study examines the forms of tax evasion in various segments of the forestry industry to evaluate the impact of the size of businesses and the level of tax audit risk on the frequency of same-type tax responses. The hypothesis is that same-type tax responses in the form of tax evasion are observed in businesses of all sizes of the forestry industry. The frequency of these tax responses correlates with the level of tax audit risk. The representative sample of micro-, small and mid-sized businesses comprises 7,910 enterprises. For each enterprise included in the sample we calculated the level of tax audit risk for the period of 2017-2020. Audit risk was calculated as a cumulative indicator of the incidence of non-compliance, which was detected by comparing the calculated and normative values of the criteria described in the Federal Tax Service’s Concept of the System of Planning of On-Site Tax Audits. The study found that the businesses of all sizes from all sectors of the forestry industry resorted to tax evasion. The specific forms and structural elements of their responses were described. The correlation and regression analysis has shown that there is a strong direct relationship between the level of tax audit risk and the frequency of same-type tax responses. The occurrence of same-type tax responses points to the weaker impact of economic factors within the traditional model of tax behaviour. These findings can be of interest to the tax authorities and policy-makers seeking to raise tax revenues collected from enterprises of the Russian forestry industry.
{"title":"The Impact of the Size of Enterprises on Tax Evasion in the Forestry Industry of Russia","authors":"Iu. E. Labunets, I. Mayburov","doi":"10.15826/jtr.2022.8.1.110","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.1.110","url":null,"abstract":"The problem of low tax revenues and a large shadow sector is relevant to many countries and industries, and the forestry industry in Russia is no exception. This study examines the forms of tax evasion in various segments of the forestry industry to evaluate the impact of the size of businesses and the level of tax audit risk on the frequency of same-type tax responses. The hypothesis is that same-type tax responses in the form of tax evasion are observed in businesses of all sizes of the forestry industry. The frequency of these tax responses correlates with the level of tax audit risk. The representative sample of micro-, small and mid-sized businesses comprises 7,910 enterprises. For each enterprise included in the sample we calculated the level of tax audit risk for the period of 2017-2020. Audit risk was calculated as a cumulative indicator of the incidence of non-compliance, which was detected by comparing the calculated and normative values of the criteria described in the Federal Tax Service’s Concept of the System of Planning of On-Site Tax Audits. The study found that the businesses of all sizes from all sectors of the forestry industry resorted to tax evasion. The specific forms and structural elements of their responses were described. The correlation and regression analysis has shown that there is a strong direct relationship between the level of tax audit risk and the frequency of same-type tax responses. The occurrence of same-type tax responses points to the weaker impact of economic factors within the traditional model of tax behaviour. These findings can be of interest to the tax authorities and policy-makers seeking to raise tax revenues collected from enterprises of the Russian forestry industry.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259448","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.3.124
Mohammed Saleh Al-Maghrebi, Noor Sharoja Sapiei, Mazni Abdullah
This systematic review emphasizes the importance of expanding and deepening the theoretical framework of research on individual taxpayer compliance, particularly through integrated models. The main objective of this article is to systematically review the literature on tax compliance based on three determinants: coercive power, trust in tax authorities and transparency; and provide a direction for future research. There are three review questions in this paper, namely: (1) What is the present situation of the literature on the connection between coercive power and tax compliance; (2) What is the present situation of the literature on the connection between trust in tax authorities and tax compliance; (3) What is the present situation of the literature on the connection between “relationship transparency” and tax compliance. A systematic review of the literature was used to perform this review, considering 66 studies published in several suggested databases. The results are a call for a more sophisticated understanding of not only how suggested factors (Coercive Power; Trust; Transparency) affect tax compliance, but also how they interact and change each other and then, influence tax compliance. This review implies that enhancing tax service, transparency, and government trust is more successful and relatively easier to proceed than encouraging positive behaviour among taxpayers. This review is the first to systematically analyse the literature on tax compliance based on three determinants (coercive power, trust and transparency), as found, no synthesis studies have comprehensively covered the issue. This results in unique, motivating, and relevant discoveries that may be used to direct future studies and serve as a tool for academics, practitioners, and policymakers. Furthermore, this study would aid governments and tax authorities to understand the motives and perceptions of taxpayers into taxes.
{"title":"Power, Trust and Transparency as Determinant Factors of Tax Compliance: A Systematic Review","authors":"Mohammed Saleh Al-Maghrebi, Noor Sharoja Sapiei, Mazni Abdullah","doi":"10.15826/jtr.2022.8.3.124","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.124","url":null,"abstract":"This systematic review emphasizes the importance of expanding and deepening the theoretical framework of research on individual taxpayer compliance, particularly through integrated models. The main objective of this article is to systematically review the literature on tax compliance based on three determinants: coercive power, trust in tax authorities and transparency; and provide a direction for future research. There are three review questions in this paper, namely: (1) What is the present situation of the literature on the connection between coercive power and tax compliance; (2) What is the present situation of the literature on the connection between trust in tax authorities and tax compliance; (3) What is the present situation of the literature on the connection between “relationship transparency” and tax compliance. A systematic review of the literature was used to perform this review, considering 66 studies published in several suggested databases. The results are a call for a more sophisticated understanding of not only how suggested factors (Coercive Power; Trust; Transparency) affect tax compliance, but also how they interact and change each other and then, influence tax compliance. This review implies that enhancing tax service, transparency, and government trust is more successful and relatively easier to proceed than encouraging positive behaviour among taxpayers. This review is the first to systematically analyse the literature on tax compliance based on three determinants (coercive power, trust and transparency), as found, no synthesis studies have comprehensively covered the issue. This results in unique, motivating, and relevant discoveries that may be used to direct future studies and serve as a tool for academics, practitioners, and policymakers. Furthermore, this study would aid governments and tax authorities to understand the motives and perceptions of taxpayers into taxes.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259555","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.3.119
Shukhrat A. Toshmatov, Zafarjon A. Abdullaev, Zarif O. Ahrorov
This article is devoted to the analysis of the impact of corporate income tax on compulsory reserves created by commercial banks for possible loan loss provision. In the majority of countries banks are required to create compulsory reserves for potential loan loss provisions, and the corporate tax regime applies tax deductions to these compulsory reserves. The corporate tax system facilitates timely coverage of potential loan loss provision. In addition, corporate taxation is an essential factor in the transparency of banks’ financial statements. The research has revealed that reserves for potential loan loss provision are used primarily for profit regulator purposes, not to regulate capital. This implies that when deducting the amount of total reserves for tax purposes of banks the loan loss provision is positively related to the corporate income tax rate. The analysis of the selected commercial banks has confirmed that the impact of corporate income tax is more significant for the timely admitting potential loan loss provision when deducting general reserves from the tax base, mainly for the purpose of taxing banks’ profits. According to the results, an increase in the tax rate by an average of 1% could lead to an increase in the amount of required loan loss provision by 3.9%. This means that when total reserves are deducted for tax purposes, the underlying hypotheses that compulsory reserves for loan loss provisions are positively correlated with the corporate income tax rate and that the amount of loss reserves is increased at the income tax rate have been confirmed. In general, the following aspects are crucially important in the taxation of profits of commercial banks: which method is more convenient for loan loss provision (write-offs or formation of reserves); entire or partial compliance between the taxation and regulation of reserves for loan loss provision; imposing restrictions on the application of tax deductions to reserves for possible loan loss provisions.
{"title":"Influence of Corporate Income Tax to Loan Loss Provision: Evidence from Uzbekistan","authors":"Shukhrat A. Toshmatov, Zafarjon A. Abdullaev, Zarif O. Ahrorov","doi":"10.15826/jtr.2022.8.3.119","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.119","url":null,"abstract":"This article is devoted to the analysis of the impact of corporate income tax on compulsory reserves created by commercial banks for possible loan loss provision. In the majority of countries banks are required to create compulsory reserves for potential loan loss provisions, and the corporate tax regime applies tax deductions to these compulsory reserves. The corporate tax system facilitates timely coverage of potential loan loss provision. In addition, corporate taxation is an essential factor in the transparency of banks’ financial statements. The research has revealed that reserves for potential loan loss provision are used primarily for profit regulator purposes, not to regulate capital. This implies that when deducting the amount of total reserves for tax purposes of banks the loan loss provision is positively related to the corporate income tax rate. The analysis of the selected commercial banks has confirmed that the impact of corporate income tax is more significant for the timely admitting potential loan loss provision when deducting general reserves from the tax base, mainly for the purpose of taxing banks’ profits. According to the results, an increase in the tax rate by an average of 1% could lead to an increase in the amount of required loan loss provision by 3.9%. This means that when total reserves are deducted for tax purposes, the underlying hypotheses that compulsory reserves for loan loss provisions are positively correlated with the corporate income tax rate and that the amount of loss reserves is increased at the income tax rate have been confirmed. In general, the following aspects are crucially important in the taxation of profits of commercial banks: which method is more convenient for loan loss provision (write-offs or formation of reserves); entire or partial compliance between the taxation and regulation of reserves for loan loss provision; imposing restrictions on the application of tax deductions to reserves for possible loan loss provisions.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259736","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.2.114
M. M. Thottoli, N. A. Mamari
Value Added Tax (VAT) system started to implement only in the year 2018 in Gulf Corporation Councils countries. The main purpose of this study is to understand to a great extent the determinants of VAT in Oman by using a qualitative approach. The research survey has used purposive sampling techniques to select a group of individual accountants who are working in a small and medium sized business. The study has considered respondents’ basic knowledge in accounting and experience by adopting a qualitative approach and selected 26 respondents as sample size involving semi-structured interviews. The findings suggested that there is a positive impact on determinants of VAT (VAT law, VAT awareness, and VAT impacts) with the implementation of VAT in Oman. The study highlights the broad scope of VAT in Oman specially to remove VAT ambiguity among citizens. The study identified not only citizens believes on VAT but also each set of interviewees’ responses can be understood in different ways. The paper provides a path for strategic insights and practical thinking by software providers, accountants, managers, governments, and the general public. The study has shown that the majority of the respondents did not exactly know about the overall scope of VAT, intra sales and purchase between countries, input tax, output tax, and zero tax. Determinants of VAT law, VAT awareness and VAT impacts are not well understood, especially by micro, small and medium enterprises. But the majority of the respondents were ready to accept and agree that VAT impacts Oman’s GDP significantly.
{"title":"Determinants of Value Added Tax in Oman","authors":"M. M. Thottoli, N. A. Mamari","doi":"10.15826/jtr.2022.8.2.114","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.2.114","url":null,"abstract":"Value Added Tax (VAT) system started to implement only in the year 2018 in Gulf Corporation Councils countries. The main purpose of this study is to understand to a great extent the determinants of VAT in Oman by using a qualitative approach. The research survey has used purposive sampling techniques to select a group of individual accountants who are working in a small and medium sized business. The study has considered respondents’ basic knowledge in accounting and experience by adopting a qualitative approach and selected 26 respondents as sample size involving semi-structured interviews. The findings suggested that there is a positive impact on determinants of VAT (VAT law, VAT awareness, and VAT impacts) with the implementation of VAT in Oman. The study highlights the broad scope of VAT in Oman specially to remove VAT ambiguity among citizens. The study identified not only citizens believes on VAT but also each set of interviewees’ responses can be understood in different ways. The paper provides a path for strategic insights and practical thinking by software providers, accountants, managers, governments, and the general public. The study has shown that the majority of the respondents did not exactly know about the overall scope of VAT, intra sales and purchase between countries, input tax, output tax, and zero tax. Determinants of VAT law, VAT awareness and VAT impacts are not well understood, especially by micro, small and medium enterprises. But the majority of the respondents were ready to accept and agree that VAT impacts Oman’s GDP significantly.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.1.109
G. A. Yepes-López, U. Gergerlioğlu
Many studies have been conducted on the effect of tax education on tax consciousness, however, no study that reveals such an effect has been conducted in Latin America. In this context, we aimed to analyze whether there is a significant difference between the attitudes towards tax consciousness of students who took tax courses and those who did not take tax courses at the University of Externado in Colombia. The data regarding 538 surveys were taken into account for analysis and testing. A 5-point Likert scale was used for the attitude items in the survey. It was observed that the data on attitude items did not show a normal distribution. Therefore, non-parametric tests were used for the data subject to our survey. In this context, the relationship between the demographic data (gender, marital status, work status) and the attitude items were analyzed through Mann Whitney U and Kruskal Wallis H tests. The test results of our study for gender and marital status showed that female students compared to males and married students compared to single and engaged students showed more supportive attitudes towards consciousness. Additionally, the students who define their own tax consciousness level as high revealed more supportive attitudes towards tax education. As the results of our analysis revealed that there is not much difference among the attitudes of students who received tax courses and those who did not receive tax courses, it would be beneficial for comparability to carry out such a study in universities in other countries located in Latin America.
{"title":"Tax Education and the Attitude of University Students Towards Tax Consciousness: The Case of University of Externado (Colombia)","authors":"G. A. Yepes-López, U. Gergerlioğlu","doi":"10.15826/jtr.2022.8.1.109","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.1.109","url":null,"abstract":"Many studies have been conducted on the effect of tax education on tax consciousness, however, no study that reveals such an effect has been conducted in Latin America. In this context, we aimed to analyze whether there is a significant difference between the attitudes towards tax consciousness of students who took tax courses and those who did not take tax courses at the University of Externado in Colombia. The data regarding 538 surveys were taken into account for analysis and testing. A 5-point Likert scale was used for the attitude items in the survey. It was observed that the data on attitude items did not show a normal distribution. Therefore, non-parametric tests were used for the data subject to our survey. In this context, the relationship between the demographic data (gender, marital status, work status) and the attitude items were analyzed through Mann Whitney U and Kruskal Wallis H tests. The test results of our study for gender and marital status showed that female students compared to males and married students compared to single and engaged students showed more supportive attitudes towards consciousness. Additionally, the students who define their own tax consciousness level as high revealed more supportive attitudes towards tax education. As the results of our analysis revealed that there is not much difference among the attitudes of students who received tax courses and those who did not receive tax courses, it would be beneficial for comparability to carry out such a study in universities in other countries located in Latin America.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259300","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.1.105
O.N. Harkushenko
In conditions of integral digitalization, governments may face a shortfall in VAT revenues due to tax avoidance and frauds. Here arise two opposite hypotheses: 1) digital technologies can solve problems with VAT; 2) digital technologies are not capable to do so. The purpose of the study is to conduct an analytical review of the main problems and ways to improve the administration of VAT in the context of the digitalization of the economy. To achieve this, literature on digital technologies in VAT administration was analyzed. The literature sample consists of 25 sources on e-invoicing and 27 sources on blockchain in VAT administration. The main criteria for literature selection are: accessibility and significance of source; time horizon (last 10–15 years); keywords (“e-invoicing”, “blockchain”, “VAT”, “taxation”, “tax administration”); interdisciplinary approach (literature set represent standpoints of experts from different fields). It was established, that there is no consensus about e-invoicing and blockchain in VAT administration. These technologies have both shortcomings and advantages. The main result of the review is this: digital technologies are not a panacea for solving all problems with VAT administration. That is, both hypothesis of this paper is not proved, but not refuted. Digital technologies can simplify and reduce costs on VAT administration, provided there is a developed ICT infrastructure and consistent regulatory framework, a high tax culture, a low level of “shadow” economy. Interaction between countries in terms of the tax information exchange is also crucial. If these conditions are met, digital technologies in taxation can be effectively employed in the next 5–10 years in the most advanced countries; less developed countries will need much more time for this.
{"title":"Prospects of VAT Administration Improvement in Digitalized World: Analytical Review","authors":"O.N. Harkushenko","doi":"10.15826/jtr.2022.8.1.105","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.1.105","url":null,"abstract":"In conditions of integral digitalization, governments may face a shortfall in VAT revenues due to tax avoidance and frauds. Here arise two opposite hypotheses: 1) digital technologies can solve problems with VAT; 2) digital technologies are not capable to do so. The purpose of the study is to conduct an analytical review of the main problems and ways to improve the administration of VAT in the context of the digitalization of the economy. To achieve this, literature on digital technologies in VAT administration was analyzed. The literature sample consists of 25 sources on e-invoicing and 27 sources on blockchain in VAT administration. The main criteria for literature selection are: accessibility and significance of source; time horizon (last 10–15 years); keywords (“e-invoicing”, “blockchain”, “VAT”, “taxation”, “tax administration”); interdisciplinary approach (literature set represent standpoints of experts from different fields). It was established, that there is no consensus about e-invoicing and blockchain in VAT administration. These technologies have both shortcomings and advantages. The main result of the review is this: digital technologies are not a panacea for solving all problems with VAT administration. That is, both hypothesis of this paper is not proved, but not refuted. Digital technologies can simplify and reduce costs on VAT administration, provided there is a developed ICT infrastructure and consistent regulatory framework, a high tax culture, a low level of “shadow” economy. Interaction between countries in terms of the tax information exchange is also crucial. If these conditions are met, digital technologies in taxation can be effectively employed in the next 5–10 years in the most advanced countries; less developed countries will need much more time for this.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67258801","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.2.112
S. G. Belev, E. Matveev, N. S. Moguchev
Lak of investments in fixed assets which stimulate economic growth is one of the problems of the modern Russian economy. According to the main hypothesis of the research, that corporate profit taxation decreases companies’ investment level, we aimed to assess the level of impact of profit taxation on investments in fixed assets. To test the hypothesis, we estimate the empirical investment equation, using the indicator of tax burden as one of the factors affecting investment. The theoretical basis of the research is the neoclassical cash-flow model. The marginal effective tax rate (METR) was used as an indicator of the tax burden. The empirical equation was estimated using a random effects model on the panel microdata, which includes financial statistics of 4,000 Russian companies for the period 2014–2018. The sample companies represent 78 regions of Russia and about 50 types of economic activity. We assumed heterogeneous effect of profit taxation and estimated the model separately for each of the three groups of companies differing in the degree of financial constraints. According to the results obtained, for the entire sample, for the entire period under review, we observe a negative impact of the marginal effective rate on the level of investment, significant at the 1% level. In aggregate, if the marginal effective tax rate falls by 1 percentage point, the investment level will increase by 0.05 percentage points. We obtained the following main results: profit taxation has a significant negative effect on the level of investment for companies that are not financially constrained, and the effect is not observed for financially constrained companies; younger companies are more sensitive to changes in profit taxation. However, general sensitivity of investment to profit taxation is quite modest.
{"title":"Estimation of Profit Taxation Effect on Russian Companies’ Investments","authors":"S. G. Belev, E. Matveev, N. S. Moguchev","doi":"10.15826/jtr.2022.8.2.112","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.2.112","url":null,"abstract":"Lak of investments in fixed assets which stimulate economic growth is one of the problems of the modern Russian economy. According to the main hypothesis of the research, that corporate profit taxation decreases companies’ investment level, we aimed to assess the level of impact of profit taxation on investments in fixed assets. To test the hypothesis, we estimate the empirical investment equation, using the indicator of tax burden as one of the factors affecting investment. The theoretical basis of the research is the neoclassical cash-flow model. The marginal effective tax rate (METR) was used as an indicator of the tax burden. The empirical equation was estimated using a random effects model on the panel microdata, which includes financial statistics of 4,000 Russian companies for the period 2014–2018. The sample companies represent 78 regions of Russia and about 50 types of economic activity. We assumed heterogeneous effect of profit taxation and estimated the model separately for each of the three groups of companies differing in the degree of financial constraints. According to the results obtained, for the entire sample, for the entire period under review, we observe a negative impact of the marginal effective rate on the level of investment, significant at the 1% level. In aggregate, if the marginal effective tax rate falls by 1 percentage point, the investment level will increase by 0.05 percentage points. We obtained the following main results: profit taxation has a significant negative effect on the level of investment for companies that are not financially constrained, and the effect is not observed for financially constrained companies; younger companies are more sensitive to changes in profit taxation. However, general sensitivity of investment to profit taxation is quite modest.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259094","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.3.122
Arun Sharma, Renuka Sharma
Taxation policy constitutes a very important position in Government’s focus on macro-economic management and development of the state. The lack of adequate financial resources has made economies especially developing ones to focus upon tax performance more vigorously. Compliance is not everything about enforcement for tax collections alone; it carries attempts of modern day states to build an obedient and self-policing society. In this context, tax practitioners play a crucial role in creating the same. Tax practitioners act as fundamental allies of taxpayers while they also carry a legal obligation to obey tax laws when professionally advising their clients. The present study attempts to explore the underlying factors behind tax professionals’ ethics based decision making process. For the purpose of statistical analysis, a structured questionnaire was employed building upon a four-dimensional framework of tax ethics. The survey data has been collected from a sample of 316 individual tax practitioners from three major provinces of North India – Punjab, Haryana & Himachal Pradesh using non-probability snowball sampling technique during July-Dec. 2021. The statistical results revealed tax practitioners’ ethics is indeed reflected by the postulated framework. Three of the postulated hypothesis namely stakeholder view, Machiavellian scale & compliance costs were found as significantly influencing tax ethics thereby signifying a relationship between practitioners ethics and these dimensions. The survey findings carry important managerial implications for improving the responsiveness of tax revenue performance under dynamic economic settings.
{"title":"Exploring Tax Decision Factors: A Perspective from North Indian Tax Practitioners","authors":"Arun Sharma, Renuka Sharma","doi":"10.15826/jtr.2022.8.3.122","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.122","url":null,"abstract":"Taxation policy constitutes a very important position in Government’s focus on macro-economic management and development of the state. The lack of adequate financial resources has made economies especially developing ones to focus upon tax performance more vigorously. Compliance is not everything about enforcement for tax collections alone; it carries attempts of modern day states to build an obedient and self-policing society. In this context, tax practitioners play a crucial role in creating the same. Tax practitioners act as fundamental allies of taxpayers while they also carry a legal obligation to obey tax laws when professionally advising their clients. The present study attempts to explore the underlying factors behind tax professionals’ ethics based decision making process. For the purpose of statistical analysis, a structured questionnaire was employed building upon a four-dimensional framework of tax ethics. The survey data has been collected from a sample of 316 individual tax practitioners from three major provinces of North India – Punjab, Haryana & Himachal Pradesh using non-probability snowball sampling technique during July-Dec. 2021. The statistical results revealed tax practitioners’ ethics is indeed reflected by the postulated framework. Three of the postulated hypothesis namely stakeholder view, Machiavellian scale & compliance costs were found as significantly influencing tax ethics thereby signifying a relationship between practitioners ethics and these dimensions. The survey findings carry important managerial implications for improving the responsiveness of tax revenue performance under dynamic economic settings.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259765","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.2.116
Y. K. Wang, L. Zhang
This objective of this paper is to assess the correlation among economic growth, tax revenues, tax evasion and tax reforms in China. Especially, we explore the usefulness of a special proxy for economic activity: the amount of nightlight that can be observed from outer space as a measure of economic growth to measure its impact on tax revenue. Empirical analyses GDP and taxes were based on the data of National Statistical Yearbook of China from 1991 to 2020. The night-lights data was gathered from the United States Air Force Defense Meteorological Satellite Program (DMSP). Kuznets approach was used to estimate the correlation between China’s GDP and taxes. The theoretical model to measure and calculate the sum of night illumination brightness was designed. We used the SUR-OLS method and the sum of night lights data to estimate its impact on China’s tax revenues. We have found that the total tax revenue increases with the growth of GDP, revealing that China’s GDP has not yet reached the Kuznets inflection point where the elasticity of tax revenue is equal to zero. That is, China’s current GDP does not show serious tax evasion. To confirm the correlation between GDP and direct and indirect taxes, we have found that GDP and indirect tax revenue shows a J-shaped curve. However, the relationship between GDP and direct tax holds an N-shaped curve, indicating that indirect tax revenue is less likely to lead to tax evasion than direct tax revenue. The evidence suggests that there is a significant positive correlation between the sum of night lights and GDP, and the impact of sum of night lights on total tax revenue is also positive, but it is insignificant.
{"title":"Tax Revenue, Night Lights and Underground Economy: Evidence from China","authors":"Y. K. Wang, L. Zhang","doi":"10.15826/jtr.2022.8.2.116","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.2.116","url":null,"abstract":"This objective of this paper is to assess the correlation among economic growth, tax revenues, tax evasion and tax reforms in China. Especially, we explore the usefulness of a special proxy for economic activity: the amount of nightlight that can be observed from outer space as a measure of economic growth to measure its impact on tax revenue. Empirical analyses GDP and taxes were based on the data of National Statistical Yearbook of China from 1991 to 2020. The night-lights data was gathered from the United States Air Force Defense Meteorological Satellite Program (DMSP). Kuznets approach was used to estimate the correlation between China’s GDP and taxes. The theoretical model to measure and calculate the sum of night illumination brightness was designed. We used the SUR-OLS method and the sum of night lights data to estimate its impact on China’s tax revenues. We have found that the total tax revenue increases with the growth of GDP, revealing that China’s GDP has not yet reached the Kuznets inflection point where the elasticity of tax revenue is equal to zero. That is, China’s current GDP does not show serious tax evasion. To confirm the correlation between GDP and direct and indirect taxes, we have found that GDP and indirect tax revenue shows a J-shaped curve. However, the relationship between GDP and direct tax holds an N-shaped curve, indicating that indirect tax revenue is less likely to lead to tax evasion than direct tax revenue. The evidence suggests that there is a significant positive correlation between the sum of night lights and GDP, and the impact of sum of night lights on total tax revenue is also positive, but it is insignificant.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259273","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.3.123
Sumarno Manrejo, Tri Yulaeli
Taxes are the largest contributor to the state revenue in Indonesia, therefore tax compliance is required to meet the revenue target. This research aims to examine and analyze relates to the effect of the correlation between planned behavior of taxpayers and mediating intention to pay taxes on tax compliance in an effort to encourage the growth of state revenues. These research hypotheses are: 1) Taxpayers’ planned behavior has an effect to the tax compliance; 2) Taxpayers’ planned behavior has an effect to the intention to pay taxes; 3) Intention to pay taxes has an impact towards tax compliance and 4) Intention to pay taxes could mediate the influence of taxpayers’ planned behavior against the tax compliance. These research models are mixed method with quantitative approach which strengthened by concurrent triangulation design. This research used SEM-Lisrel as a data analysis method with total sample of 310 respondents who are individual taxpayers in Bekasi, Indonesia that have been reported to the 2021 Annual Tax Return. This research found that: 1) Taxpayers’ planned behavior can improve tax compliance; 2) Taxpayers’ planned behavior will boost the intention to pay taxes; 3) Intention to pay taxes can improve tax compliance; and 4) The intention of taxpayers could be able to mediate taxpayers’ planned behavior towards tax compliance. The implication of this research is that special regulations are needed which ruled the connection between the tax authorities and taxpayers as a harmonious professional bondage because both of them have an unequal interest and it is necessary to examine these taxpayers, both of corporate taxpayers and individual taxpayers in supporting the implementation of self-assessment system in Indonesia.
{"title":"Tax Compliance Model Based on Taxpayers Planned Behavior in Indonesia","authors":"Sumarno Manrejo, Tri Yulaeli","doi":"10.15826/jtr.2022.8.3.123","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.123","url":null,"abstract":"Taxes are the largest contributor to the state revenue in Indonesia, therefore tax compliance is required to meet the revenue target. This research aims to examine and analyze relates to the effect of the correlation between planned behavior of taxpayers and mediating intention to pay taxes on tax compliance in an effort to encourage the growth of state revenues. These research hypotheses are: 1) Taxpayers’ planned behavior has an effect to the tax compliance; 2) Taxpayers’ planned behavior has an effect to the intention to pay taxes; 3) Intention to pay taxes has an impact towards tax compliance and 4) Intention to pay taxes could mediate the influence of taxpayers’ planned behavior against the tax compliance. These research models are mixed method with quantitative approach which strengthened by concurrent triangulation design. This research used SEM-Lisrel as a data analysis method with total sample of 310 respondents who are individual taxpayers in Bekasi, Indonesia that have been reported to the 2021 Annual Tax Return. This research found that: 1) Taxpayers’ planned behavior can improve tax compliance; 2) Taxpayers’ planned behavior will boost the intention to pay taxes; 3) Intention to pay taxes can improve tax compliance; and 4) The intention of taxpayers could be able to mediate taxpayers’ planned behavior towards tax compliance. The implication of this research is that special regulations are needed which ruled the connection between the tax authorities and taxpayers as a harmonious professional bondage because both of them have an unequal interest and it is necessary to examine these taxpayers, both of corporate taxpayers and individual taxpayers in supporting the implementation of self-assessment system in Indonesia.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2022-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"67259879","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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