Assessing the economic and social impacts of fiscal policies

2020 ◽  
Vol 47 (3) ◽  
pp. 671-694
Author(s):  
Saeed Solaymani
Keyword(s):  
Income Inequality ◽  
Tax Policy ◽  
Income Tax ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Tax Policies ◽  
Fiscal Policies ◽  
Poverty Level ◽  
Content Type ◽  
Corporate Income Taxes

PurposeThis study is the first attempt to analyze the effectiveness of recent two major tax policies, the reductions in personal and corporate income taxes and a rise in indirect tax and their combine, under both balanced and unbalanced budget conditions, on the economy and social aspects of Malaysia.Design/methodology/approachThis study uses a computable general equilibrium model to investigate the impacts of all simulation scenarios on the key macro and micro indicators. Further, based on the 2012 Malaysia Household Income and Expenditure Survey, it uses a micro-data with a significant number of households (over 56,000 individuals) to analyze the impacts of tax policies on poverty and income inequality of Malaysian.FindingsSimulation results show that, under the balanced budget condition, personal and corporate income tax reductions increase economic growth, household consumption, and investment, while the rise in indirect tax has adverse impacts on these variables. However, in the unbalanced budget condition, all tax policies, except indirect tax policy, reduce real GDP and investment in the economy and the indirect tax policy has insignificant impacts on all indicators. All policy reforms reallocate resources, especially labor, in the economy. In both budget conditions, the reductions in corporate and personal income taxes, particularly the corporate income tax, decrease poverty level of Malaysian households. Results also indicate that both tax policies are unable to influence income inequality in Malaysia.Social implicationsThis study recommends that the government can increase its revenue by increasing indirect taxes as it does not have any impact on household welfare. In order to increase government revenues, initial increases in personal and corporate income taxes are suggested as they may have small negative impacts on the economy and welfare of households.Originality/valueOne of the significant features of this paper is that it examines both expansionary and contractionary fiscal policies in a country that government budget depends on oil exports. Since the literature on this subject is limited, particularly in the Malaysian context, the authors used Malaysia as a case to show how tax reform policies affect the economy and poverty level of such countries. Distinguishing the Malaysian households into 10 deciles and analyzing the distributional impacts of tax policies on these categories are the most significant contributions of this study.

scholarly journals Can Corporate Income Tax Cuts Stimulate Innovation?

2019 ◽  
Vol 55 (5) ◽  
pp. 1415-1465 ◽  
Author(s):  
Julian Atanassov ◽  
Xiaoding Liu
Keyword(s):  
Income Tax ◽  
Financial Constraints ◽  
Opposite Effect ◽  
Tax Avoidance ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Corporate Income Taxes ◽  
Corporate Innovation ◽  
Tangible Assets ◽  
Tax Cuts

We hypothesize that corporate income taxes distort firms’ incentives to innovate by reducing their pledgeable income. Using a differences-in-differences methodology, we document that large corporate income tax cuts boost corporate innovation. We find a similar but opposite effect for tax increases. Most of the change in innovation occurs 2 or more years after the tax change, and there’s no effect before the tax change. Exploring the mechanisms, we show that tax cuts have a stronger impact on innovation for firms with weaker governance, greater financial constraints, fewer tangible assets, smaller patent stock, and a greater degree of tax avoidance.

scholarly journals The Effects of Fiscal and Tax Incentives on Regional Innovation Capability: Text Extraction Based on Python

Mathematics ◽  
2020 ◽  
Vol 8 (7) ◽  
pp. 1193 ◽  
Author(s):  
Yawei Qi ◽  
Wenxiang Peng ◽  
Neal N. Xiong
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Value Added ◽  
Corporate Income Tax ◽  
Tax Burden ◽  
Fiscal Policies ◽  
Innovation Capability ◽  
Regional Innovation ◽  
Business Tax ◽  
Macro Tax Burden

The regulation of fiscal and tax policies is an imperative prerequisite for improving the regional innovation capability. In view of this, an attempt was made to select 31 provinces and cities in China as the research object from 2009 to 2018, to extract the fiscal and tax policy text encouraging innovation of the Chinese provinces and cities based on Python, and analyze their impact on regional innovation capability from both a text data and numerical data perspective. It is noteworthy that most of the provincial fiscal policies just follow the national fiscal policies. Each province does not formulate fiscal and tax policy according to its own unique characteristics. Fiscal policies and regional innovation capability exhibit significant spatial heterogeneity. Based on the results of the dynamic panel data model, it is seen that the R&D input and industrial structure are the main sources of improving innovation capability. The fiscal expenditure for science and technology, fiscal and tax policy text, macro tax burden, business tax (BT), and value-added tax (VAT) have a significant boosting effect on the regional innovation capability. However, the corporate income tax hinders the regional innovation capability. Finally, through the robustness test of invention patents, it is found that the fiscal and tax policy text, macro tax burden, and business tax still have a positive effect on invention patents, but the role of value-added tax has changed from promotion to obstruction, and the corporate income tax has become a significant obstacle on invention patents. This shows that China should build a tax system that promotes fair competition, reduce the tax burden of enterprises, encourage enterprises to conduct independent R&D, and guide enterprises in the evolution from the low-tech to high-tech innovation by improving the tax structure and fiscal technology expenditures.

scholarly journals Is Federal Tax-Exemption Policy for Nonprofit Hospitals Moving to a Clearer Quid pro Quo Basis?

2012 ◽  
Vol 3 (1) ◽  
Author(s):  
Beaufort B. Longest
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Internal Revenue Service ◽  
Tax Policies ◽  
Nonprofit Hospitals ◽  
Internal Revenue ◽  
Exemption Policy ◽  
Income Tax Policy ◽  
Modern Era

The question of whether federal tax-exemption policy for nonprofit hospitals is moving to a clearer and more robust quid pro quo basis is examined. The question is important because heretofore the basis for federal exemption has been vague and fluid. Utilizing a quid pro quo rationale for federal tax-exemption of nonprofit hospitals as a framework, the chronological record of policy in this area is organized into three major periods: (1) A Simple Quid pro Quo: Early Federal Tax Policies for Nonprofit Hospitals; (2) A Changing Quid pro Quo: The Modern Era of Federal Tax Policy for Nonprofit Hospitals; and (3) An Emergent, Clearer Quid pro Quo: Recent Congressional Activism on Exemption Policy, including relevant provisions of the ACA. The article concludes with discussion of continuing vagueness and ambiguity in federal corporate income tax policy for nonprofit hospitals. The importance of enhanced clarity and specificity in the information upon which policy in this area is based is discussed, as are actions needed by Congress and the Internal Revenue Service to accomplish improved exemption policy.

The Effects of Changes in State Tax Enforcement on Corporate Income Tax Collections

2015 ◽  
Vol 38 (1) ◽  
pp. 125-143 ◽  
Author(s):  
Sanjay Gupta ◽  
Daniel P. Lynch
Keyword(s):  
Income Tax ◽  
Fixed Effects ◽  
State Level ◽  
Data Availability ◽  
Corporate Income Tax ◽  
Annual Reports ◽  
Tax Policies ◽  
Tax Enforcement ◽  
Current Period ◽  
State Tax

ABSTRACT Using a new hand-collected database on state department of revenue (DOR) expenditures, this study examines the association between changes in state corporate tax enforcement expenditures and state-level tax collections during the 2000–2008 time period. The results, after addressing endogeneity concerns using a changes specification and state fixed effects, suggest a $1 increase (decrease) in current period corporate enforcement is associated with an $8 to $11 increase (decrease) in state tax collections two years into the future. The association appears to be attenuated in states with restrictive tax policies (i.e., unitary/combined reporting and related-party add-back provisions) suggesting that enforcement and restrictive tax policies could serve as substitutes. JEL Classifications: H26; H71; H72. Data Availability: Enforcement data were hand collected from state revenue department annual reports and by contacting state corporate income tax personnel. All annual reports are publicly available.

Taxation in a mixed economy: the case of China

2017 ◽  
Vol 34 (1) ◽  
pp. 49-61 ◽  
Author(s):  
Davidson Sinclair ◽  
Larry Li
Keyword(s):  
Income Tax ◽  
Central Government ◽  
Corporate Income Tax ◽  
Tax Rates ◽  
Government Ownership ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Content Type ◽  
Tax Rate ◽  
For Profit

Purpose The purpose of this paper is to investigate how Chinese firms’ ownership structure is related to their effective tax rate. The People’s Republic of China provides an interesting environment to examine the corporate income tax. Government has significant ownership stakes in the for-profit economy and state-owned enterprises (SOEs) are liable to the corporate income tax. This is very different to most other economies where SOE tends to dominate the not-for-profit economy and pays no corporate income tax. Government ownership also varies between the central government and local government in addition to state asset management bureaus. This provides a rich institutional background to examining the corporate income tax. Design/methodology/approach A panel data analysis approach is used to examine relationship between ownership structure and effective tax rates of all public firms in China from 1999 to 2009. Findings The authors report that effective tax rates do appear to vary across the ownership types, but that SOEs pay a statistically higher effective tax rate than to non-state-owned. In addition, local government owned SOE pay higher effective tax rates than central government and SAMB owned SOE. The authors also investigate Zimmerman’s (1983) political cost hypothesis. Unfortunately, these results are econometrically fragile with the statistical significance of those results varying by empirical technique. Originality/value This paper provides insight into government ownership and taxation in China.

Higher tax to replace Russia's metal export duty

2021 ◽  
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Content Type ◽  
Export Duty ◽  
Eurasian Economic Union ◽  
Domestic Prices ◽  
Economic Union ◽  
The Government

Significance Officials are trying to correct high domestic prices which they see as unjustified, and to claw back what they regard as excessive profits earned by metals companies. Impacts Export duties could exert upward pressure on global prices of steel, nickel and aluminium. Exports to the Eurasian Economic Union are exempt, so the government will need a failsafe system to prevent re-exports to third countries. The export duties will reduce the corporate income tax earned by metal-producing regions.

Analisis Ekualisasi SPT Masa PPN Dengan SPT PPh Badan Terhadap Kewajiban Perpajakan PT. Adiyana Teknik Mandiri

2018 ◽  
Vol 6 (3) ◽  
pp. 117-122
Author(s):  
Irham Firdauza Pratama ◽  
Hadi Sutomo
Keyword(s):  
Income Tax ◽  
Value Added ◽  
Preventive Measure ◽  
Income Taxes ◽  
Financial Statement ◽  
Corporate Income Tax ◽  
Applicable Law ◽  
Tax Returns ◽  
Tax Audit ◽  
The Difference

Many cases are related to corrections caused by the occurrence of VAT and Income Tax equalization. The difference in reporting the circulation of business on the VAT SPT with the Corporate Income Tax Return is the object of the tax authorities' examination. Basically, equalization is not to find the same number of circulation businesses but to find the cause of the difference between the VAT Period of Income Tax and the Corporate Income Tax Return. These differences are often due to differences in provisions between Income Taxes and Value Added Taxes, such as tax objects, exchange rates, and so on. The purpose of this study was to find out how to report the circulation of business between the VAT Period of VAT and Corporate Income Tax Returns of PT. AdiyanaTeknikMandiri. To find out the process and analysis of equalization between VAT Period of VAT and Corporate Income Tax Returns at PT. AdiyanaTeknikMandiri. To find out the equalization benefits of the VAT Period SPT with Corporate Income Tax Returns for companies. This study uses a comparative descriptive method with qualitative and quantitative data, namely by analyzing and processing financial statement data and existing fiscal reports, then comparing the circulation of business to the results of calculations according to the VAT Period of VAT and Corporate Income Tax Returns, then processed further to provide an explanation of the difference in business circulation generated. The results of this study indicate that PT. AdiyanaTeknikMandiri that the company in reporting the circulation of its business has not been reported as it should, it is known after equalizing it is known that there is a number of business circulation that has not been reported in the VAT Period SPT report so that it causes a difference in the amount of business circulation between the VAT Period of Income Tax and the Corporate Income Tax Return. Equalization process is carried out by comparing the VAT Period report with the Corporate Income Tax Return, collecting data on business circulation in the ledger, comparing the data obtained, then analyzing the factors that cause the different reporting of business circulation. Equalization benefits for the company, which can be a preventive measure to face a tax audit by the tax authorities, so that the company can explain in accordance with the conditions that occur, equalization can also be a benchmark of compliance and increase the accuracy of taxpayers in reporting the amount of tax obligations in accordance with the applicable law .   Keywords: tax equalization, business circulation, corporate income tax return

Empirical Evidence on the Revenue Effects of State Corporate Income Tax Policies

2009 ◽  
Vol 62 (2) ◽  
pp. 237-267 ◽  
Author(s):  
Sanjay Gupta ◽  
Jared Moore ◽  
Jeffrey Gramlich ◽  
Mary Ann Hofmann
Keyword(s):  
Empirical Evidence ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Policies

scholarly journals The Russian Cohen doctrine: problems in calculating costs and deductions in the absence of proper documentation

2019 ◽  
pp. 48-54
Author(s):  
Zh. G. Popkova
Keyword(s):  
Income Tax ◽  
Income Taxes ◽  
Regulatory Framework ◽  
Corporate Income Tax ◽  
Tax Law ◽  
Court Case ◽  
The Us ◽  
Judicial Doctrine ◽  
Approximate Amount

The article provides information about a foreign judicial doctrine (the Cohen Rule) that originated in the court case of 1930 with the participation of George Cohen, Broadway Theater manager and producer. The doctrine under consideration that is still valid in the US tax law does not exclude the application of the approximate amount of taxpayer’s expenses when calculating income taxes in the absence of documents verifying expenses. It is concluded that the domestic regulatory framework applies a similar approach that envisages a fixed deduction for individual entrepreneurs under Article 221 of the Tax Code. It is proposed to introduce a similar regulatory framework for corporate income tax.

scholarly journals PENERAPAN PERYATAAN STANDAR AKUNTANSI KEUANGAN NOMOR 46 TENTANG AKUNTANSI PAJAK PENGHASILAN DAN UNDANG-UNDANG NOMOR 36 TAHUN 2008 TENTANG PAJAK PENGHASILAN ATAS PAJAK PENGHASILAN BADAN PADA PT.MEGA JASAKELOLA

2014 ◽  
Vol 8 (3) ◽  
Author(s):  
Ray Marcel Letlora ◽  
Jantje J. Tinangon ◽  
Lintje Kalangi
Keyword(s):  
Analytical Method ◽  
Income Tax ◽  
Descriptive Analysis ◽  
Income Taxes ◽  
Corporate Income Tax ◽  
Business Services ◽  
Taxable Income ◽  
Research Results ◽  
Deferred Tax ◽  
Accounting For Income Taxes

The application of PSAK No. 46, Accounting for Income Taxes expected to bridge between accounting and tax laws with provisions. The purpose of this study is to investigate the application of PSAK No. 46 and Act No. 36 of 2008 on corporate income tax on PT.mega Jasakelola. The analytical method used is descriptive analysis. The application of PSAK No.46 of research results 46 top corporate income tax has been applied on PT.Mega Jasakelola especially regarding deferred tax, taxable income and tax payable now. Implementation of Act No. 36 of 2008 on income tax on business services is appropriate PT Mega Jasakelola Taxation existing regulations. PT.Mega Jasakelola has implemented reporting income tax on their annual tax return, in accordance with the provisions of this is evidenced by the positive correction done at the expense of the non- taxable.

Sign in / Sign up

Export Citation Format

Share Document