Taxing People

2019 ◽  
pp. 207-228
Author(s):  
William G. Gale
Keyword(s):  
Income Tax ◽  
Tax Compliance ◽  
Government Policies ◽  
Tax System

The income tax is the centerpiece of the federal tax system, as explored in this chapter, raising almost half of all federal revenues and making government policies more progressive. Despite – and in some cases because of – recent changes, the tax is ripe for reform. The proposed reforms would close loopholes, tax income more evenly across various uses, and provide the IRS with the resources to enforce the tax system better. This would raise new revenue, redistribute burdens more fairly, and simplify tax compliance.

scholarly journals Study on system fairness dimensions and tax compliance in the Middle East context

2020 ◽  
Vol 18 (1) ◽  
pp. 181-191 ◽  
Author(s):  
Saeed Awadh Bin-Nashwan ◽  
Ahmed Mubarak Al-Hamedi ◽  
Munusamy Marimuthu ◽  
Abobakr Ramadhan Al-Harethi
Keyword(s):  
Middle East ◽  
Income Tax ◽  
Tax Compliance ◽  
General System ◽  
Analysis Tool ◽  
Tax System ◽  
Tax Rate ◽  
Compliance Behavior ◽  
Self Interest ◽  
The Government

People’s perceptions of a fair tax administration system have garnered growing interest as a decisive ingredient that can install compliance behavior among taxpayers. The tax that taxpayers wish to evade is determined by their perceptions of the various robust dimensions of fairness (i.e., general fairness, preferred tax rate structure, exchange with the government, special provisions, and self-interest). Such an important matter, like tax fairness, has been overlooked in the extant literature, especially in the Middle East context, although tax administrations still suffer from low and unsatisfactory rates of compliance. This paper aims to empirically examine the influence of fairness perceptions of the income tax system on compliance behavior of taxpayers in Yemen. The study used a survey questionnaire administered to 400 individual taxpayers in Hadhramout, one of the most prosperous business regions in Yemen. Based on the PLS-SEM analysis tool, the study found that general system fairness, preferred tax rate, exchange with the government, and the extent of self-interest are significantly related to income tax compliance, while special provisions do not affect compliance decisions. The results of the study can alert the tax authority and policymakers to consider the non-pecuniary factors, other than the measures of the coercion. Establishing a fair tax system is probably one of the most successful approaches to boost compliance among taxpayers, thus yielding more tax revenue and diminishing the administrative cost for the tax authority.

scholarly journals THE ROLE OF INCOME TAX SYSTEM STRUCTURE IN TAX NON-COMPLIANCE BEHAVIOUR AMONG SMEs IN YEMEN

2021 ◽  
Vol 16 (Number 2) ◽  
pp. 23-49
Author(s):  
Lutfi Hassen Al-Ttaffi ◽  
Hijattulah Abdul-Jabbar ◽  
Saeed Awadh Bin-Nashwan
Keyword(s):  
Income Tax ◽  
Small And Medium Enterprises ◽  
Tax Compliance ◽  
System Structure ◽  
Tax System ◽  
Tax Rate ◽  
Tax Systems ◽  
High Level ◽  
Medium Enterprises ◽  
Compliance Behaviour

Tax is the main source of government revenue. However, a number of countries worldwide are increasingly besieged by challenges regarding compliance levels with the rules of tax systems. Thus, this paper aims to enhance an understanding of tax non-compliance behaviour by investigating the effect of the income tax system structure on Yemeni taxpayers’ behaviour. The study focuses on income tax compliance behaviour of owner-managers of small and medium enterprises (SMEs), as the Yemeni economy relies heavily on this sector. The SME sector represents 99.6 percent of business in Yemen. Based on a quantitative approach using a self-administered survey instrument, a total of 330 valid questionnaires were collected and the feedback provided analyzed. The results demonstrate that SME taxpayers exhibited a high level of tax non-compliance. Furthermore, the multiple regression analysis shows that the tax rate had a positive and significant influence on tax non-compliance behaviour, but the tax penalties rate did not. These results can be especially relevant to policymakers and practitioners of tax systems structures, particularly in a developing country such as Yemen.

scholarly journals The perceived fairness of turnover tax

2018 ◽  
Vol 11 (1) ◽  
Author(s):  
Adam Gluckman ◽  
Magda Turner
Keyword(s):  
South Africa ◽  
Literature Review ◽  
Income Tax ◽  
Adam Smith ◽  
Tax Compliance ◽  
Survey Questionnaire ◽  
Perceived Fairness ◽  
Tax System ◽  
And Training ◽  
Insight Into

The South Africa Turnover Tax system, implemented on 01 March 2009 to simplify tax for microbusinesses and to improve tax compliance had an insignificant number of registrations and research indicated that a possible reason is the fairness of the tax. The aim of this study is to explore the perceived fairness of the Turnover Tax system. By way of a literature review, criticisms and provisions of the Sixth Schedule to the Income Tax Act No. 58 of 1962 were identified and used as statements on a survey questionnaire. Using the principles of a fair tax system as advanced by Adam Smith a correspondence survey which included two open-ended questions was issued to participants with knowledge of Turnover Tax to establish whether the statements corresponded to any of Adam Smith’s Maxims. The results reveal that the Turnover Tax system is not perceived as completely fair and encourage Government to relook at the legislation with the intend to simplify it further, to removing ambiguity and add detailed lists of excluded services. Education and training of taxpayers is important. A repetition of this study on taxpayers registered on the Turnover Tax system will make further contribution and add to the insight into the fairness of the Turnover Tax system provided by this article.

An interpretation of the deeming provisions in legislation in the context of a good tax system - a South African perspective

2021 ◽  
Author(s):  
◽  
Tarita Mostert
Keyword(s):  
South African ◽  
Income Tax ◽  
Positive Relationship ◽  
Theoretical Perspective ◽  
Tax Compliance ◽  
Case Law ◽  
Tax System ◽  
Related Case ◽  
Legal Principles ◽  
Tax Legislation

The goal of this thesis is to analyse the relationship between deeming provisions in legislation and the principles of a good tax system. The need for a positive relationship between deeming provisions and the principles of a good tax system is demonstrated in the thesis. The research explains the historical development of deeming provisions, legal principles relevant to the interpretation of tax legislation, as well as the principles of a good tax system. Approaches to the interpretation of legislation are then described and illustrated by means of case law. Following this, the research focuses on a selection of provisions in the South African Income Tax Act, 58 of 1962, to determine whether the deeming provisions included in the Act reflect the application of the principles of a good tax system. In addition to the analysis of the selected statutory provisions, related case law is discussed, again in relation to the deeming provisions. A discussion of deeming provisions in two publications of the Organisation for Economic Co-Operation and Development (OECD) – the OECD Model Tax Convention and the OECD Multilateral Convention to Implement Tax Treaty Measures to Prevent Base Erosion and Profit Shifting – follows, with an analysis of two related deeming provisions in the Income Tax Act, to illustrate the international approach to deeming provisions and the principles of a good tax system. Finally, the administration of tax legislation is discussed, together with organisations whose mission is to promote the principles of a good tax system in tax administration. The research is qualitative in nature and follows a legal doctrinal research methodology. This methodology is both reform-oriented and theoretical and focuses on understanding the application of the legal concepts: deeming provisions, legal principles and principles of a good tax system. The research concludes that, from a theoretical perspective, a positive relationship exists between deeming provisions in the Income Tax Act and the OECD Model Tax Convention and the principles of a good tax system, and therefore creates a positive environment for tax compliance.

scholarly journals PENGARUH UNDANG-UNDANG NOMOR 7 TAHUN 1983 TENTANG PAJAK PENGHASILAN SEBAGAIMANA TELAH DIUBAH TERAKHIR DENGAN UNDANG-UNDANG NOMOR 36 TAHUN 2008 TERHADAP KEPATUHAN WAJIB PAJAK ORANG PRIBADI DI KANTOR WILAYAH DIREKTORAT JENDERAL PAJAK (DJP) JAWA TIMUR I

2020 ◽  
Vol 29 (2) ◽  
pp. 108
Author(s):  
FARISKA SEPTARINA RAJIANTO
Keyword(s):  
Income Tax ◽  
Tax Compliance ◽  
Tax Law ◽  
Tax Rates ◽  
Tax System ◽  
Taxable Income ◽  
Tax Laws ◽  
Income Tax Law ◽  
The Individual ◽  
Reporting Procedures

Tax Laws changes made Direktorat Jenderal Pajak (DJP) in order to create Tax Laws that allows taxpayers to carry out their tax obligations and in accordance with the state of today's dynamic economy. One of the Tax Laws amended is Income Tax Law seen from the taxable income bracket; non-taxable income; income tax rates; depositing and reporting procedures; tax audits; tax penalties; Taxpayer behavior; nationality; and taxpayer perceptions of the tax system significantly influence the individual taxpayer compliance in Kantor Wilayah DJP Jawa Timur I. This study continues research Barbuta-Misu (2011) which identifies the variables of tax compliance by creating a model that comes with the factors that affect tax compliance in several countries and adapted to the conditions of the State of Rome. The results of this study states that the taxable income bracket; nontaxable income; income tax rates; depositing and reporting procedures; and tax penalties have a significant influence on the individual taxpayer compliance. Other hand, tax audits; Taxpayer behavior; nationality; and taxpayer perceptions of the tax system that does not have a significant influence on the individual taxpayer compliance. Based on these results, the variables generated in the course of a study conducted by BarbutaMisu (2011) not all variables can affect tax compliance in accordance with the Income Tax Law in force in Indonesia.

Analisis Manajemen Pajak Pada Industri Penyedia Jasa Telekomunikasi

2010 ◽  
Vol 2 (1) ◽  
pp. 57-69
Author(s):  
Iim Ibrahim Nur
Keyword(s):  
Income Tax ◽  
Tax Compliance ◽  
Transformation Method ◽  
Tax Burden ◽  
Tax Allowance ◽  
Straight Line ◽  
Tax Management ◽  
Family Gathering ◽  
Straight Line Method ◽  
Depreciation Methods

Tax Management must be done throughout the company’s activities. In principle, tax management can be done via good tax compliance and minimizing tax burden. The latter can be achieved by transforming non-deductible expenses into deductible expenses. For example, PT Nyambung Teruuusss Tbk. (PT. NT) must change income Tax Art. 21 paid by the company into tax allowance with gross-up method, pooling company's cars at the office instead of letting these cars brought home by the employees, outbound training for employees instead of family gathering, and other methods including converting fringe benefits into allowance. Another method to minimize tax burden is to change depreciation methods into double-declining method instead of straight-line method. With nondeductible transformation method have saved PT NT Rp 5.26 billion of corporate income tax, while depreciation methods transformation is predicted to save the company Rp 735.66 billion for an eightyear period

Mr. and Mrs. Smith: A Student Introduction to Federal Tax Compliance and Documentation

2015 ◽  
Vol 31 (1) ◽  
pp. 119-132 ◽  
Author(s):  
Michaele L. Morrow ◽  
Shane R. Stinson
Keyword(s):  
Communication Skills ◽  
Professional Practice ◽  
Income Tax ◽  
Tax Compliance ◽  
Personal Income Tax ◽  
Initial Information ◽  
Face To Face ◽  
Client Advocacy ◽  
Tax Practice

ABSTRACT In this case, students assume the role of new accounting staff tasked with the preparation of a personal income tax return and supporting documentation for a client of their firm. Students are provided prior year work papers and client communications, a copy of the prior year's tax return, as well as a letter and supporting documents from the client for the current year. To complete the case, students generate questions based on the initial information provided, meet face-to-face with the client, and roll forward a set of electronic work papers before submitting a complete current year engagement file for senior review. This case adds work papers and client interaction to the traditional tax compliance case to reinforce both the technical and communication skills valued in professional practice. The formulation of questions for the client also allows students to practice discussing technical topics in a non-technical manner and underscores the required balance between attitudes of client advocacy stressed in professional tax practice and legal requirements for “good-faith” tax return reporting. This case is appropriate for an individual income tax course at either the undergraduate or graduate level, and can be easily adapted to increase or decrease difficulty.

scholarly journals Victory Tax: A Holistic Income Tax System

Entropy ◽  
2021 ◽  
Vol 23 (11) ◽  
pp. 1492
Author(s):  
Donald J. Jacobs
Keyword(s):  
Income Tax ◽  
Free Market ◽  
Poverty Line ◽  
The United States ◽  
Effective Tax Rate ◽  
Tax System ◽  
Tax Rate ◽  
Single Tax ◽  
Government Transfer ◽  
Log Normal

How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

Sign in / Sign up

Export Citation Format

Share Document