Pub Date : 2022-01-01DOI: 10.15826/jtr.2022.8.1.108
Stoyan Tanchev
Initially flat-rate income taxes only existed in tax havens, but presently, 26 countries have adopted the proportional tax as a fiscal instrument to increase budget revenues and accelerate economic growth. This article empirically examines the determinants affecting the revenues from a proportional income tax with non-taxable minimum (negative flat tax) used in Russia and a proportional income tax without non-taxable minimum (pure flat tax) used in Bulgaria. The research objective is to estimate the impact of the macroeconomic variables such as gross disposable income, employment, gross capital formation and government expenditures on the revenue from the proportional income tax in Russia and Bulgaria. The study employs an ordinary least square (OLS) method and quarterly seasonally adjusted data for the period 2008–2020. For Russia, quarterly seasonally adjusted data for the period from March 2008 till December 2020 were used, including 52 observations. For Bulgaria, quarterly seasonally adjusted data for the period from March 2008 till March 2020 were used, including 49 observations. Basing on the results, it may be inferred that the increase of the gross disposable income and higher marginal tax rate of the proportional tax with a non-taxable minimum collect more nominal revenue in the budget, as Russia’s example showed. The increase of the employment related with a lower marginal tax rate of the proportional income tax without a non-taxable minimum collect less nominal revenue as Bulgaria’s example shows. A standpoint of the revenue in the budget the proportional income tax with non-taxable minimum is more effective than proportional income tax without non-taxable minimum.
{"title":"Determinants of the Proportional Income Tax Revenue: A Comparative Assessment of Russia and Bulgaria","authors":"Stoyan Tanchev","doi":"10.15826/jtr.2022.8.1.108","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.1.108","url":null,"abstract":"Initially flat-rate income taxes only existed in tax havens, but presently, 26 countries have adopted the proportional tax as a fiscal instrument to increase budget revenues and accelerate economic growth. This article empirically examines the determinants affecting the revenues from a proportional income tax with non-taxable minimum (negative flat tax) used in Russia and a proportional income tax without non-taxable minimum (pure flat tax) used in Bulgaria. The research objective is to estimate the impact of the macroeconomic variables such as gross disposable income, employment, gross capital formation and government expenditures on the revenue from the proportional income tax in Russia and Bulgaria. The study employs an ordinary least square (OLS) method and quarterly seasonally adjusted data for the period 2008–2020. For Russia, quarterly seasonally adjusted data for the period from March 2008 till December 2020 were used, including 52 observations. For Bulgaria, quarterly seasonally adjusted data for the period from March 2008 till March 2020 were used, including 49 observations. Basing on the results, it may be inferred that the increase of the gross disposable income and higher marginal tax rate of the proportional tax with a non-taxable minimum collect more nominal revenue in the budget, as Russia’s example showed. The increase of the employment related with a lower marginal tax rate of the proportional income tax without a non-taxable minimum collect less nominal revenue as Bulgaria’s example shows. A standpoint of the revenue in the budget the proportional income tax with non-taxable minimum is more effective than proportional income tax without non-taxable minimum.","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":"67259084","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.2022.8.2.115
M. Syukur, M. Madah Marzuki, M. Zakaria
The paper aims to understand the impact of corporate ownership structure on tax avoidance in Asian contexts. The ownership structure in Asia is concentrated in one group of shareholders, which enables this shareholder to have a significant influence on tax avoidance. This research mainly reviews published research articles. Search terms, such as ownership, tax avoidance, and tax aggressiveness were used in the search function in all fields of the papers from Scopus and Web of Science databases. This study captured nine pieces of empirical research after applying several filtrations (inclusion and exclusion) in the article search. Most of selected researches were conducted in China, while some in Southeast Asia. There are four review questions in this research, namely: (1) How do shareholders influence tax avoidance levels in Asia; (2) What is the best way to measure the level of ownership and tax avoidance; (3) What type of corporate owners do scholars study the most and the least; (4) What are the methodological gaps in the research topic (corporate ownership and tax avoidance) that future scholars should be aware of. The paper finds that different shareholders behave differently towards tax, and the behaviour is according to the host country’s attributes, such as country settings, national tax policy, and investor protection levels. The study primarily helps governments and regulators understand the motives and techniques shareholders apply to avoid tax. Furthermore, it also provides repeatable methodological guidance in detail for future researchers to conduct a systematic literature review and for research students to formulate their hypothesis on the relationship between ownership structure and tax avoidance.
本文旨在了解在亚洲背景下公司股权结构对避税的影响。亚洲的股权结构集中在一群股东身上，这使得这群股东对避税有很大的影响。本研究主要回顾已发表的研究文章。在Scopus和Web of Science数据库中所有领域的论文的搜索功能中都使用了所有权、避税和攻击性等搜索词。本研究在文章检索中进行了多次过滤(包括和排除)后，捕获了九篇实证研究。所选研究大多在中国进行，也有一些在东南亚进行。本研究有四个审查问题，即:(1)股东如何影响亚洲的避税水平;(2)衡量所有权和避税水平的最佳方法是什么;(3)学者对哪种类型的公司所有者研究最多，研究最少;(4)未来学者在研究课题(公司所有权与避税)中需要注意的方法论空白是什么?本文发现，不同的股东对税收的行为不同，而这种行为取决于东道国的属性，如国家环境、国家税收政策和投资者保护水平。这项研究主要是帮助政府和监管机构了解股东避税的动机和技巧。此外，它还为未来的研究人员进行系统的文献综述以及为研究生提出关于所有权结构与避税关系的假设提供了可重复的详细方法指导。
{"title":"Ownership Structure and Tax Avoidance in Asia: a Systematic Literature Review and a Research Agenda","authors":"M. Syukur, M. Madah Marzuki, M. Zakaria","doi":"10.15826/jtr.2022.8.2.115","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.2.115","url":null,"abstract":"The paper aims to understand the impact of corporate ownership structure on tax avoidance in Asian contexts. The ownership structure in Asia is concentrated in one group of shareholders, which enables this shareholder to have a significant influence on tax avoidance. This research mainly reviews published research articles. Search terms, such as ownership, tax avoidance, and tax aggressiveness were used in the search function in all fields of the papers from Scopus and Web of Science databases. This study captured nine pieces of empirical research after applying several filtrations (inclusion and exclusion) in the article search. Most of selected researches were conducted in China, while some in Southeast Asia. There are four review questions in this research, namely: (1) How do shareholders influence tax avoidance levels in Asia; (2) What is the best way to measure the level of ownership and tax avoidance; (3) What type of corporate owners do scholars study the most and the least; (4) What are the methodological gaps in the research topic (corporate ownership and tax avoidance) that future scholars should be aware of. The paper finds that different shareholders behave differently towards tax, and the behaviour is according to the host country’s attributes, such as country settings, national tax policy, and investor protection levels. The study primarily helps governments and regulators understand the motives and techniques shareholders apply to avoid tax. Furthermore, it also provides repeatable methodological guidance in detail for future researchers to conduct a systematic literature review and for research students to formulate their hypothesis on the relationship between ownership structure and tax avoidance.","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":"67259185","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.2022.8.1.107
A. Pugachev
Russia is one of the most unequal of the world’s major economies, with its wealth and income inequalities having drastically increased in recent years. This study aims to describe the influence of the flat personal income tax on income inequality in Russia and its regional characteristics by analyzing per capita tax revenues. The hypothesis is that the system of income taxation that existed in Russia until 2021 did not help reduce income inequality but on the contrary, exacerbated it, which is particularly evident on the regional level. Methodologically, the article relies on statistical analysis of concentration indices, time series analysis, index method, and comparative analysis. The calculations were made with the help of the Analysis ToolPack in MS Excel by using the data on 85 Russian regions. To test the hypothesis, 7 indicators were calculated: the range of variation, standard deviation, coefficient of variation, decile ratio of funds, decile ratio of differentiation, quintile ratio of funds, and the Gini index for 85 Russian regions for the period from 2006 to 2020. In the given period, these indicators remained steadily at a high level with a slight decrease in 2008–2010. Judging by the dynamics of the Gini index calculated by Rosstat, income inequality tended to decline although there were no significant changes in the regional differences in income while regional inequality also remained high. Monetary income and gross regional product are distributed more evenly across Russian regions in comparison with the personal income tax revenues and tax revenues in general of the regional governments’ consolidated budgets. The findings confirm the hypothesis and show that the personal income tax, which is an essential element of the tax system, exacerbated the situation of inequality in Russian regions. These findings can be of use to policy-makers and contribute to further research on taxation instruments and their potential to reduce or mitigate inequality.
{"title":"Taxation-Based Indicators as a Measure of Income Inequality in Russian Regions","authors":"A. Pugachev","doi":"10.15826/jtr.2022.8.1.107","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.1.107","url":null,"abstract":"Russia is one of the most unequal of the world’s major economies, with its wealth and income inequalities having drastically increased in recent years. This study aims to describe the influence of the flat personal income tax on income inequality in Russia and its regional characteristics by analyzing per capita tax revenues. The hypothesis is that the system of income taxation that existed in Russia until 2021 did not help reduce income inequality but on the contrary, exacerbated it, which is particularly evident on the regional level. Methodologically, the article relies on statistical analysis of concentration indices, time series analysis, index method, and comparative analysis. The calculations were made with the help of the Analysis ToolPack in MS Excel by using the data on 85 Russian regions. To test the hypothesis, 7 indicators were calculated: the range of variation, standard deviation, coefficient of variation, decile ratio of funds, decile ratio of differentiation, quintile ratio of funds, and the Gini index for 85 Russian regions for the period from 2006 to 2020. In the given period, these indicators remained steadily at a high level with a slight decrease in 2008–2010. Judging by the dynamics of the Gini index calculated by Rosstat, income inequality tended to decline although there were no significant changes in the regional differences in income while regional inequality also remained high. Monetary income and gross regional product are distributed more evenly across Russian regions in comparison with the personal income tax revenues and tax revenues in general of the regional governments’ consolidated budgets. The findings confirm the hypothesis and show that the personal income tax, which is an essential element of the tax system, exacerbated the situation of inequality in Russian regions. These findings can be of use to policy-makers and contribute to further research on taxation instruments and their potential to reduce or mitigate inequality.","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":"67258975","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.2022.8.2.117
J. Ma, Y. Leontyeva, A. Domnikov
In recent years, the transportation industry has enjoyed the benefits brought about by changes in the national tax policy. The purpose of this paper is to analyze the impact of the change from Business Tax to Value-Added Tax (BT-to-VAT) on the tax burden of transport enterprises in various regions of China. Based on the cross-regional characteristics of the transportation industry, China is divided into four regions: eastern, central, western and northeast. Research hypothesis – the tax reduction effect of the BT-to-VAT tax burden is not only related to the characteristics of the enterprise itself, but also related to the regional environment and market integration factors of China. Using the Difference in differences (DID) method, the data covers 22 listed companies from 2009 to 2020. The paper analyzes the internal characteristics of the enterprise itself, the influence of the external environment and the degree of industrial integration on the enterprise, and the reasons for the difference. Empirical research shows that BT-to-VAT reduces the tax burden of enterprises, the eastern region has the least impact on the ratio of corporate income tax expenses to operating income, while the central and western regions have relatively greater impacts. The scale of the enterprise and the level of economic development have a positive effect on the financial efficiency of the enterprise, while the non-current assets ratio and the degree of market integration have a negative effect on the tax burden. This research is beneficial to provide reference for enterprises in different regions to improve their management and to formulate macro policies by relevant national departments.
{"title":"Analyze the impact of the transition from business tax to VAT on the tax burden of transport enterprises in various regions of China","authors":"J. Ma, Y. Leontyeva, A. Domnikov","doi":"10.15826/jtr.2022.8.2.117","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.2.117","url":null,"abstract":"In recent years, the transportation industry has enjoyed the benefits brought about by changes in the national tax policy. The purpose of this paper is to analyze the impact of the change from Business Tax to Value-Added Tax (BT-to-VAT) on the tax burden of transport enterprises in various regions of China. Based on the cross-regional characteristics of the transportation industry, China is divided into four regions: eastern, central, western and northeast. Research hypothesis – the tax reduction effect of the BT-to-VAT tax burden is not only related to the characteristics of the enterprise itself, but also related to the regional environment and market integration factors of China. Using the Difference in differences (DID) method, the data covers 22 listed companies from 2009 to 2020. The paper analyzes the internal characteristics of the enterprise itself, the influence of the external environment and the degree of industrial integration on the enterprise, and the reasons for the difference. Empirical research shows that BT-to-VAT reduces the tax burden of enterprises, the eastern region has the least impact on the ratio of corporate income tax expenses to operating income, while the central and western regions have relatively greater impacts. The scale of the enterprise and the level of economic development have a positive effect on the financial efficiency of the enterprise, while the non-current assets ratio and the degree of market integration have a negative effect on the tax burden. This research is beneficial to provide reference for enterprises in different regions to improve their management and to formulate macro policies by relevant national departments.","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":"67259329","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.2022.8.3.118
M. Gülşen
Fiscal policies are designed to balance cyclical fluctuations. Fiscal policies in developed countries are mostly countercyclical. However, fiscal policies alone cannot explain the cyclical effect of fiscal policies implemented in developing countries. This is due to weak institutional structures, political restrictions, and populist practices. The study examined the effect of fiscal policies on business cycles in Turkey between 1975–2020 using the ARDL model and annual data. According to the findings, public expenditures, investment expenditures, tax revenues, direct tax revenues, and budget balance increase the output gap. On the other hand, trade openness, government transfer payments, and indirect tax revenues reduce the output gap. Based on the empirical findings, the following comments can be made: (a) fiscal policy can be considered cyclical in this period; (b) cyclical fluctuations are reduced in open economies; (c) budget balance increases cyclical fluctuations (non-Keynesian effect). A possible reason for this is that the budget revenues mainly consist of indirect tax revenues (70% in Turkey). The significance of the results obtained in the study are as follows: (1) analyzes the impact of fiscal policies implemented by a developing economy on stability using a current and long time series; (2) provides an insight into the institutional quality and response of implemented fiscal policies through short- and long-term analysis; (3) analyzes the effect of Turkey’s ability to implement fiscal policies, which prefers the global markets integration model, and the tax technique it creates, on the economy.
{"title":"The Effect of Fiscal Policies on Business Cycles in Turkey","authors":"M. Gülşen","doi":"10.15826/jtr.2022.8.3.118","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.118","url":null,"abstract":"Fiscal policies are designed to balance cyclical fluctuations. Fiscal policies in developed countries are mostly countercyclical. However, fiscal policies alone cannot explain the cyclical effect of fiscal policies implemented in developing countries. This is due to weak institutional structures, political restrictions, and populist practices. The study examined the effect of fiscal policies on business cycles in Turkey between 1975–2020 using the ARDL model and annual data. According to the findings, public expenditures, investment expenditures, tax revenues, direct tax revenues, and budget balance increase the output gap. On the other hand, trade openness, government transfer payments, and indirect tax revenues reduce the output gap. Based on the empirical findings, the following comments can be made: (a) fiscal policy can be considered cyclical in this period; (b) cyclical fluctuations are reduced in open economies; (c) budget balance increases cyclical fluctuations (non-Keynesian effect). A possible reason for this is that the budget revenues mainly consist of indirect tax revenues (70% in Turkey). The significance of the results obtained in the study are as follows: (1) analyzes the impact of fiscal policies implemented by a developing economy on stability using a current and long time series; (2) provides an insight into the institutional quality and response of implemented fiscal policies through short- and long-term analysis; (3) analyzes the effect of Turkey’s ability to implement fiscal policies, which prefers the global markets integration model, and the tax technique it creates, on the economy.","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":"67259395","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.2022.8.3.121
Abibual Getachew Nigatu, Atinkugn Assefa Belete
The biggest impediment to the Ethiopian government’s ability to raise revenue by its means to the required level is the lack of taxpayers’ compliance behavior with the tax system. Therefore, this study examines the key determinants of taxpayers’ compliance behavior with the tax system in the Afar regional state. To this end, two purposively selected woredas (Awash and Aba’ala) and one city administration (Samara-logia) were used. Primary data were collected from 404 randomly selected respondents. The ordered logistic regression model was used to analyze the factors that determine tax compliance. Results show that tax knowledge, probability of detection, perception of government spending, organizational strength of the tax authority, fairness of the tax system, and simplicity of the tax system have positive effects on tax compliance, whereas tax rates have a negative effect on tax compliance in the Afar regional state. As a result, it is suggested that the tax authorities launch effective and brief awareness-development and tax education programs for the general public and taxpayers in particular. The tax system, notably the tax return, tax forms, and tax rules, should be simplified by the tax authorities so that they are readily understood by taxpayers. Furthermore, the tax authorities should be powerful enough to effectively and efficiently enforce the tax laws, and to ensure tax fairness, their tax liability must be determined by their ability to pay. Lastly, the government must maintain accountability and transparency in how tax revenue is dispensed, as well as deliver social services to the public efficiently and intelligently so that taxpayers have faith in and a favorable attitude toward the taxes they pay and the tax system.
{"title":"Determinants of Business House Rental Income Taxpayers’ Compliance with Tax System in Afar Region, Northeast Ethiopia","authors":"Abibual Getachew Nigatu, Atinkugn Assefa Belete","doi":"10.15826/jtr.2022.8.3.121","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.121","url":null,"abstract":"The biggest impediment to the Ethiopian government’s ability to raise revenue by its means to the required level is the lack of taxpayers’ compliance behavior with the tax system. Therefore, this study examines the key determinants of taxpayers’ compliance behavior with the tax system in the Afar regional state. To this end, two purposively selected woredas (Awash and Aba’ala) and one city administration (Samara-logia) were used. Primary data were collected from 404 randomly selected respondents. The ordered logistic regression model was used to analyze the factors that determine tax compliance. Results show that tax knowledge, probability of detection, perception of government spending, organizational strength of the tax authority, fairness of the tax system, and simplicity of the tax system have positive effects on tax compliance, whereas tax rates have a negative effect on tax compliance in the Afar regional state. As a result, it is suggested that the tax authorities launch effective and brief awareness-development and tax education programs for the general public and taxpayers in particular. The tax system, notably the tax return, tax forms, and tax rules, should be simplified by the tax authorities so that they are readily understood by taxpayers. Furthermore, the tax authorities should be powerful enough to effectively and efficiently enforce the tax laws, and to ensure tax fairness, their tax liability must be determined by their ability to pay. Lastly, the government must maintain accountability and transparency in how tax revenue is dispensed, as well as deliver social services to the public efficiently and intelligently so that taxpayers have faith in and a favorable attitude toward the taxes they pay and the tax system.","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":"67259631","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.2022.8.3.120
M. Malkina, R. Balakin
Economic systems are increasingly exposed to external shocks of various nature, which test their resilience. The tax system, which is directly linked to the level of business activity, is one of the first to experience stress, so the ways it reacts to shock are of particular research interest. The 2020–2021 coronavirus pandemic made such studies more acute. The purpose of the paper is to develop and test new approaches in studying the resilience of the tax system in terms of tax revenues by analyzing the dynamics and structure of the tax system stress index in the Russian Federation in pre-pandemic, pandemic and recovery periods. The tax system stress index for tax revenues is calculated as the difference between the moving standard deviation and the moving average growth rate of tax revenues. We have developed a method for decomposing the stress index by source with determining the contribution of each tax to the average growth rate and to the standard deviation of the growth rate. We have also calculated the Russian Federation tax revenue stress index from December 2015 to March 2022 and identified its sources. It was found that the stress indices for almost all taxes (except for excises and state duties) are significantly positively correlated with each other. The main contribution to the growth of the stress index during the crisis and its decline within the recovery period is made by profit tax and a group of taxes on natural rent, which significantly negatively correlate with oil prices. Under the pandemic crisis in Russia, the stress index on revenue form special tax regimes also increased significantly. It was found that the personal income tax has a stabilizing effect on the tax system stress index in the crisis and post-crisis periods. During the pandemic in Russia, the damping role of excises also came to the fore, which is explained by institutional factors and changes in tax rates. The research findings can be advantageous for the authorities to make an impact on the most vulnerable components of the tax system of the Russian Federation in order to increase its resilience to crises.
{"title":"Stress index of the Tax System of the Russian Federation in terms of Tax Revenues","authors":"M. Malkina, R. Balakin","doi":"10.15826/jtr.2022.8.3.120","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.3.120","url":null,"abstract":"Economic systems are increasingly exposed to external shocks of various nature, which test their resilience. The tax system, which is directly linked to the level of business activity, is one of the first to experience stress, so the ways it reacts to shock are of particular research interest. The 2020–2021 coronavirus pandemic made such studies more acute. The purpose of the paper is to develop and test new approaches in studying the resilience of the tax system in terms of tax revenues by analyzing the dynamics and structure of the tax system stress index in the Russian Federation in pre-pandemic, pandemic and recovery periods. The tax system stress index for tax revenues is calculated as the difference between the moving standard deviation and the moving average growth rate of tax revenues. We have developed a method for decomposing the stress index by source with determining the contribution of each tax to the average growth rate and to the standard deviation of the growth rate. We have also calculated the Russian Federation tax revenue stress index from December 2015 to March 2022 and identified its sources. It was found that the stress indices for almost all taxes (except for excises and state duties) are significantly positively correlated with each other. The main contribution to the growth of the stress index during the crisis and its decline within the recovery period is made by profit tax and a group of taxes on natural rent, which significantly negatively correlate with oil prices. Under the pandemic crisis in Russia, the stress index on revenue form special tax regimes also increased significantly. It was found that the personal income tax has a stabilizing effect on the tax system stress index in the crisis and post-crisis periods. During the pandemic in Russia, the damping role of excises also came to the fore, which is explained by institutional factors and changes in tax rates. The research findings can be advantageous for the authorities to make an impact on the most vulnerable components of the tax system of the Russian Federation in order to increase its resilience to crises.","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":"67259819","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.2022.8.1.106
M. Krajňák
The article deals with changes in personal income taxation in the Czech Republic in 2022 and their impact on the tax burden. The article also deals with the levy burden represented by payments for social security contributions. An extensive tax reform changing the method of taxation of income from dependent activities took place in the Czech Republic in 2021. Its continuing effects was added with impact of legislation changes after 1 January 2022. The most significant change is the increase in the taxpayer’s relief by CZK 3,000. The assessment of how these changes affect the tax burden was made by calculating the effective tax rates. The research methodology includes methods of regression and correlation analysis and methods for time-series analysing. The average wages used by the Czech Social Security Administration for the purposes of calculating social security contributions were used for the analysis. The results show that the tax burden has decreased since 2022 if basic taxpayer relief is applied. For the taxpayer, who, in addition to the taxpayer’s relief, also claims a tax credit for children, the tax burden increases slightly. Although in most cases, the income is subject to the nominal linear tax rate, in comparison with the previous year, there is an increase in the progressivity of the personal income tax due to the rise of the tax relief per taxpayer. On the other hand, social security contributions are both nominally and real linear. There are no significant reforms in this area in comparison with the tax burden. Due to the decrease in the tax burden, in some cases, the levy burden of social security contributions is higher, even though their nominal rate is lower than the nominal income tax rate.
{"title":"Quo Vadis Tax and Levy Burden of Wages in the Czech Republic? Tax Reform in 2022","authors":"M. Krajňák","doi":"10.15826/jtr.2022.8.1.106","DOIUrl":"https://doi.org/10.15826/jtr.2022.8.1.106","url":null,"abstract":"The article deals with changes in personal income taxation in the Czech Republic in 2022 and their impact on the tax burden. The article also deals with the levy burden represented by payments for social security contributions. An extensive tax reform changing the method of taxation of income from dependent activities took place in the Czech Republic in 2021. Its continuing effects was added with impact of legislation changes after 1 January 2022. The most significant change is the increase in the taxpayer’s relief by CZK 3,000. The assessment of how these changes affect the tax burden was made by calculating the effective tax rates. The research methodology includes methods of regression and correlation analysis and methods for time-series analysing. The average wages used by the Czech Social Security Administration for the purposes of calculating social security contributions were used for the analysis. The results show that the tax burden has decreased since 2022 if basic taxpayer relief is applied. For the taxpayer, who, in addition to the taxpayer’s relief, also claims a tax credit for children, the tax burden increases slightly. Although in most cases, the income is subject to the nominal linear tax rate, in comparison with the previous year, there is an increase in the progressivity of the personal income tax due to the rise of the tax relief per taxpayer. On the other hand, social security contributions are both nominally and real linear. There are no significant reforms in this area in comparison with the tax burden. Due to the decrease in the tax burden, in some cases, the levy burden of social security contributions is higher, even though their nominal rate is lower than the nominal income tax rate.","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":"67258964","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 : 2021-09-01DOI: 10.15826/jtr.2021.7.2.097
G. Oreku
In spite of the importance of Micro Businesses (MBs) in forming a wide tax base, there isn’t a clear practical approach to tax administration of MBs in many developing countries. Specifically, there is limited information on how digital technology can address tax administration challenges for MBs. This paper explores the potentials of digital technology to enhance tax revenue collection and its administration to Micro Businesses in the Tanzanian context. The data on tax administration, challenges impeding tax administration to MBs, and the potential of digital technology used in tax administration were collected by questionnaire and interview. Interviews were conducted with 24 informants from Tanzania Revenue Authority, and 137 Micro Business candidates from various business sectors were provided with a questionnaire in Dar es Salaam, which is the head office of tax administration and the economic hub of Tanzania. Thematic approach was used to analyse the qualitative data. Descriptive statistics was used to analyse quantitative data through SPPS. The findings revealed that the current tax practices to MBs do not comply with tax theories of low administration cost, wide tax base, and simple-to-administer tax procedure. The findings revealed that the challenges like lack of record keeping, lack of knowledge on tax payment procedures, unknown tax collection channels, and multiple taxes can be tackled by establishing strong relationship mechanisms between TRA and MBs and using digital technology solutions to tackle challenges. The study suggests some digital technology solutions to address the challenges. Leading to that practical aspect of tax administration that can guide policy makers and tax administrators was introduced.
{"title":"Application of digital technology in enhancing tax revenue collection: the case of micro businesses in Tanzania","authors":"G. Oreku","doi":"10.15826/jtr.2021.7.2.097","DOIUrl":"https://doi.org/10.15826/jtr.2021.7.2.097","url":null,"abstract":"In spite of the importance of Micro Businesses (MBs) in forming a wide tax base, there isn’t a clear practical approach to tax administration of MBs in many developing countries. Specifically, there is limited information on how digital technology can address tax administration challenges for MBs. This paper explores the potentials of digital technology to enhance tax revenue collection and its administration to Micro Businesses in the Tanzanian context. The data on tax administration, challenges impeding tax administration to MBs, and the potential of digital technology used in tax administration were collected by questionnaire and interview. Interviews were conducted with 24 informants from Tanzania Revenue Authority, and 137 Micro Business candidates from various business sectors were provided with a questionnaire in Dar es Salaam, which is the head office of tax administration and the economic hub of Tanzania. Thematic approach was used to analyse the qualitative data. Descriptive statistics was used to analyse quantitative data through SPPS. The findings revealed that the current tax practices to MBs do not comply with tax theories of low administration cost, wide tax base, and simple-to-administer tax procedure. The findings revealed that the challenges like lack of record keeping, lack of knowledge on tax payment procedures, unknown tax collection channels, and multiple taxes can be tackled by establishing strong relationship mechanisms between TRA and MBs and using digital technology solutions to tackle challenges. The study suggests some digital technology solutions to address the challenges. Leading to that practical aspect of tax administration that can guide policy makers and tax administrators was introduced.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42850356","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 : 2021-09-01DOI: 10.15826/jtr.2021.7.2.095
D. Stoilova, I. Todorov
This study aims to estimate the impact of three fiscal instruments (direct tax revenue, indirect tax revenue and government consumption expenditure) on the economic growth of ten new European Union member states from Central and Eastern Europe– Bulgaria, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. We examine the hypothesis about the effect of expansionary fiscal policy on economic growth. The study employs a vector autoregression and annual Eurostat data for the period 2007–2019. Four control variables (the shares of gross capital formation, household consumption, exports in GDP, and the economic growth in the euro area) are included in the model to account for the influence of non-fiscal factors on economic growth. The empirical results indicate that the real output growth rate in the ten new member states of the European Union is negatively affected by direct tax revenue, while economic growth in the euro area, exports and gross capital formation are positively related to economic growth. The results also imply that government consumption and indirect tax revenue have no significant impact on the growth rate of real output of the ten studied countries from Central and Eastern Europe. It may be inferred that policymakers in the new European Union member states can raise economic growth by encouraging exports and investment and by lowering the share of direct tax revenue in GDP. From the three analyzed fiscal instruments (direct taxes, indirect taxes and government consumption expenditure), only one has proven to be effective in the case of the new member countries.
{"title":"Fiscal policy and economic growth: Evidence from Central and Eastern Europe","authors":"D. Stoilova, I. Todorov","doi":"10.15826/jtr.2021.7.2.095","DOIUrl":"https://doi.org/10.15826/jtr.2021.7.2.095","url":null,"abstract":"This study aims to estimate the impact of three fiscal instruments (direct tax revenue, indirect tax revenue and government consumption expenditure) on the economic growth of ten new European Union member states from Central and Eastern Europe– Bulgaria, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. We examine the hypothesis about the effect of expansionary fiscal policy on economic growth. The study employs a vector autoregression and annual Eurostat data for the period 2007–2019. Four control variables (the shares of gross capital formation, household consumption, exports in GDP, and the economic growth in the euro area) are included in the model to account for the influence of non-fiscal factors on economic growth. The empirical results indicate that the real output growth rate in the ten new member states of the European Union is negatively affected by direct tax revenue, while economic growth in the euro area, exports and gross capital formation are positively related to economic growth. The results also imply that government consumption and indirect tax revenue have no significant impact on the growth rate of real output of the ten studied countries from Central and Eastern Europe. It may be inferred that policymakers in the new European Union member states can raise economic growth by encouraging exports and investment and by lowering the share of direct tax revenue in GDP. From the three analyzed fiscal instruments (direct taxes, indirect taxes and government consumption expenditure), only one has proven to be effective in the case of the new member countries.","PeriodicalId":53924,"journal":{"name":"Journal of Tax Reform","volume":null,"pages":null},"PeriodicalIF":0.4,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41369890","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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