DECOMPOSITION OF SOCIAL INCOME ADJUSTMENT EFFECT OF CHINA’S PERSONAL INCOME TAX AND SELECTION AMONG DIFFERENT UNIFORM INCOME TAX MODES

2018 ◽  
Vol 63 (04) ◽  
pp. 917-941
Author(s):  
HU HUA
Keyword(s):  
Income Tax ◽  
Linear Models ◽  
Income Taxes ◽  
Personal Income ◽  
Chinese Family ◽  
Tax Burden ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Income Gap ◽  
Business Income

Based on 10342 Chinese family samples, by means of non-linear models, the effects of wage income tax (WIT), individual business income tax (IBIT) and other income tax (OIT) on the income gap in China are analyzed. It is found that China’s classified income tax is helpful to narrow the income gap. WIT plays a very important role in narrowing the income gap, with IBIT and OIT widening the income gap. Such income taxes, especially WIT, cause differences of the tax burden between taxpayers who have the same income amount. Uniform income tax is an indispensable measure to solve the problems. On the basis of the income tax systems of 13 countries, 16 different kinds of personal or household uniform income tax modes were built up. Namibia’s household uniform income tax mode is practical to China, because the income adjustment effect of such mode is stronger than that of China’s classified income tax, but the average tax rate of it is lower than that of China’s classified income tax.

scholarly journals Can Tax Incentives for Electronic Payments Curtail the Shadow Economy? Korea`s Attempt to Reduce Underreporting in Retail Businesses

2017 ◽  
Vol 32 (2) ◽  
pp. 85-134
Author(s):  
Sung Myung Jae ◽  
Awasthi Rajul ◽  
Lee Hyung Chul
Keyword(s):  
Income Tax ◽  
Shadow Economy ◽  
Positive Impact ◽  
Tax Incentives ◽  
Personal Income ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Gini Coefficients ◽  
Korean Economy ◽  
Business Income

Increasing tax revenues by curtailing the shadow economy has been a central goal of tax policy and administration in the Republic of Korea since the National Tax Service was established as an independent agency in 1966. This paper examines the Tax Incentives for Electronically Traceable Payments (TIETP) introduced by the Korean tax authorities in 1999 to promote payments made using credit cards, debit cards, and electronic cash receipts in business-to-consumer transactions. TIETP allows wage and salary earners to claim tax deductions for eligible purchases made using electronically traceable payments when they file their year-end income tax return. This tax incentive scheme has greatly contributed to transforming the Korean economy into a cashless economy over the last decade and a half. Card payments as a ratio of Korea`s GDP have ranked highest in the world since 2005, reaching 49% in 2014. TIETP has increased the percentage of business income earners who pay taxes from stagnant at around 30% up to the late 1990s to approximately 80% at present. The effective personal income tax rate for business income followed a continuous upward trend from 3.4% in 1998 to 6.3% in 2013. The total revenue increase driven by TIETP has been estimated as \3.4 trillion, with TIETP costs reaching \1.9 trillion. The net gain is an estimated \1.4 trillion (approximately US$1.3 billion), an increase of personal income tax revenue by 4.2%. TIETP also had a positive impact on income redistribution, decreasing Gini coefficients by 0.11 percentage points.

Prospective Directions of Personal Income Changes in the Context of Changing Legislation in the Russian Federation

2020 ◽  
Vol 26 (6) ◽  
pp. 649-655
Author(s):  
R. N. Berlizev
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Tax Burden ◽  
Rate Model ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Tax Legislation ◽  
Dividend Payments ◽  
Progressive Tax ◽  
Definition Of

The topic of the study is relevant in light of changes in tax legislation pertaining to the current personal income tax system. From January 1, 2021, the personal income tax rate will change from 13 to 15 percent for incomes exceeding 5 million rubles (applies only to the amount over 5 million), which is basically the first step in the transition from a flat personal income tax rate to a progressive one.Aim. The presented study proposes and substantiates by calculation a new approach to calculating personal income tax based on a progressive rate.Materials and methods. This study uses generalization, synthesis, and systematization to analyze the risks and opportunities of the transition from the current personal income tax rate to progressive taxation.Results. The authors determine that income received by individuals through dividend payments is substantial, while the number of individuals who receive dividends is relatively small, and conclude that income received in the form of dividends can be classified as the so-called “excess income”, which is not defined at the legislative level. Therefore, now it is necessary to introduce and develop a definition of “excess income” in tax legislation and to draw a distinction between the concepts of “dividends” and “remuneration”. It is found by calculation that a relatively small increase in the tax burden on the income of dividend-receiving taxpayers would provide additional funds for the budget system. That said, changes to the system of taxes on personal dividends should be made with allowance for the introduction of a progressive tax rate. The proposal to completely abandon the flat personal income tax rate by introducing fundamental changes to tax rates that would affect almost any category of the population is substantiated. As a result of the proposed progressive tax rate model, budget revenues will increase, tax burden on individuals with the lowest level of income will diminish, and taxes imposed on citizens with income above the minimum level will remain the same.Conclusions. As a result of the proposed progressive tax rate model, budget revenues will increase, tax burden on individuals with the lowest level of income will diminish, and taxes imposed on the middle class will remain the same.

scholarly journals Evaluation the impact of the personal income tax reform in the Czech Republic in 2021 on effective tax rate and tax progressivity

2021 ◽  
Vol 7 (2) ◽  
pp. 134-145
Author(s):  
M. Krajňák ◽  
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Personal Income ◽  
Personal Income Tax ◽  
Effective Tax Rate ◽  
Tax Base ◽  
Tax Rate ◽  
Tax Progressivity ◽  
The Impact ◽  
Income Tax Reform

Legislation governing personal income taxation is often subject to changes. A significant personal income tax reform was carried out in the Czech Republic in 2021. The reform implements a progressive tax rate, changes the way the tax base is determined, and increases the tax relief for the taxpayer. The aim of the article is to evaluate the impact of the personal income tax reform on the effective tax rate and tax progressivity. To that end, methods of regression analysis have been used. The source of information for analysis was the data published by the Czech Statistical Office. It was found that in 2021, in comparison with 2020, the tax burden represented in this study by the effective tax rate, in all cases became lower, approximately by 5%. The main reason for this decline is the adjustment of the method of construction of the tax base, which, for the first time in the history of the Income Tax Act, is gross wages. Until the end of 2020, the tax base was a super-gross wage, or the gross wage increased by social security contribution borne by the employer at his costs. The second factor that reduces the tax burden is a CZK 3,000 increase in the deduction per taxpayer per year. This fact increases the degree of tax progressivity, as confirmed by the results of the progressivity analysis and the regression analysis. The changes that have taken place in the personal income tax this year have a positive impact on the taxpayer, but from the point of view of the state, this reform has reduced the state budget revenues.

scholarly journals Opportunities for Simplification in the Personal Income Tax Systems of the Visegrad Countries

2020 ◽  
Vol 65 (4) ◽  
pp. 531-553
Author(s):  
Éva Bonifert Szabóné
Keyword(s):  
Income Tax ◽  
Policy Instruments ◽  
Degree Of Approximation ◽  
Personal Income ◽  
Tax Burden ◽  
Personal Income Tax ◽  
It Use ◽  
Tax System ◽  
Tax Systems ◽  
The Impact

Due to the numerous factors that can influence the impact of the tax system and redistribution, there is no single correct answer to the question of which composition of economic policy instruments needs to be applied to achieve a desired redistributive effect. The general aim of the study is to investigate in relation to the quantifiable parameters of income tax systems, whether the consideration of the aspects of fairness and justice does have an excessively negative effect on the simplicity of tax systems. The study investigates the possibilities of simplifying the personal income tax system’s composition in some Central and Eastern European countries, while tax burden curves of the system remain as constant as possible. To this end, the study sets up a theoretical, simplified tax model, the parameters of which are determined by a computer program, in order to generate tax burden curves corresponding most closely to the curves of the real tax system. Based on the analysis, it can be established that the theoretical system – in some cases with restrictions – provides a good approximation to the tax burden curves of the investigated countries. The chosen simple model has a good degree of approximation to a real system that does not have significant breakpoints in its tax burden curves, nor does it use a taxation method that fundamentally modifies the system (e.g., splitting). Practical examples help to understand that a complex personal income tax system in a given country is not necessarily the only possible solution to achieve a given tax burden curve, the function may be reproduced with a good approximation constructed from simpler basic elements.

scholarly journals Trends in Personal Income Tax Progression in OECD Countries in the Context of Income Redistribution

2017 ◽  
Vol 4 (324) ◽  
Author(s):  
Małgorzata Mazurek-Chwiejczak
Keyword(s):  
Income Tax ◽  
Income Redistribution ◽  
Oecd Countries ◽  
Personal Income ◽  
Tax Burden ◽  
Personal Income Tax ◽  
Historical Trends ◽  
Income Disparities ◽  
Redistribution Policy ◽  
Different Levels

In recent years there has been an evident, widespread increase in income disparities in OECD countries. Progressive Personal Income Tax, which enables adjustment of the tax burden to individual’s capacity to pay, is one of the fundamental instruments used in redistribution policy. The aim of the paper is comparative analysis of the level of Personal Income Tax (PIT) progression in OECD countries and identification of trends in progression in the context of income redistribution. The article discusses the progressivity level of PIT in OECD countries measured by the differences in the burden at different levels of income. The cross-country and historical trends in the statutory PIT rates, the number of tax brackets and the provisions which exempt an initial level of income from tax burden are analysed and graphically illustrated.

scholarly journals Personal Income Taxation in Poland

Ekonomika ◽  
2008 ◽  
Vol 84 ◽  
Author(s):  
Edyta Małecka-Zieńska
Keyword(s):  
Income Tax ◽  
Value Added ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Tax Rate ◽  
Tax Exemptions ◽  
Tax Deductions ◽  
The One ◽  
Taxation System

The Polish taxation system has been undergoing substantial changes in recent years, aimed at creating a more transparent system and conforming to the taxation standards of market economy countries. The two most important changes were introduction of the personal income tax (PIT) in 1992 and replacement of the turnover tax with the value added tax (VAT) in 1993. The uniform personal income tax covered all incomes generated by natural persons irrespective of where the sources of income are located. The reform provided also a more equitable distribution of the tax burden by introducing a progressive system with three nominal tax rates (in 1992-20%, 30%, 40%).A comparative study of the effective PIT rate for pensioners and other groups of PIT payers is the main goal of this paper. The study refers to our own research on data received from The information of Polish Ministry of Finance about accounting of PIT in several subsequent years. Statistics cover a period from 1993 to 2003. However, numbers of taxpayers refer also to year 1992 when the PIT has been established and a period from 2004 to 2006.Concluding the situation in Poland, taxpayers with the highest income make exhaustive use of tax reductions. There are occurring situations when well-off people benefit more than people with relatively minor income (e. g. pensioners). It happens even if most of deductions were aimed generally at all taxpayers. Such a situation reduces the impression of the system fairness. Because tax deductions reduce budgetary revenues, the foregone revenues have to be compensated by other taxes or / and higher rates. Therefore, the system of deductions and relief, on the one hand, supports the special gains (e. g. house building), however, on the other it generates costs. It is possible that the reduction of tax rate for the I tax bracket and removal of some tax exemptions and deductions would make the Polish personal income tax more transparent, equal and simple.

scholarly journals Penyesuaian Lapisan dan Tarif PPh Orang Pribadi: Agresif atau Progresif?

Owner ◽  
2022 ◽  
Vol 6 (1) ◽  
pp. 709-721
Author(s):  
Kalyana Mitta Kristanti
Keyword(s):  
Income Tax ◽  
Positive Impact ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
Middle Income ◽  
Tax Rate ◽  
Tax Harmonization ◽  
The Difference ◽  
The Government

In 2022, Indonesia would apply changes in tax brackets and rates for personal income tax. This adjustment is based on the Article 17 Paragraph 1 Tax Harmonization Law Number 7 of 2021. The government tries to accommodate the needs of the community through formulating process of this regulation. In particular, it provides convenience to the lower-middle income community and encourages an even distribution of income. People belonging to the high wealth income will be subject to the highest tariffs that have just been set through this law. Through a qualitative descriptive method in which data collection is carried out by taking from literature review; law, articles, books, and website, the author tries to analyze changes in brackets and rates of personal income tax. This study presents illustrations of the calculation to explain the difference in the amount of income tax payable before and after the implementation of the Tax Harmonization Law. In addition, the analysis of the principles of equity and democracy on the adjustment of layers and tax rates is elaborated in this paper. The results obtained explain that with the application of the new tax rate, taxpayers get a tax burden relief because the tax expense is lower due to the broadening of income range. However, wealthy taxpayers will pay more taxes because of the higher tax rates. This condition proves that the new tax rate supports vertical fairness in the taxation system. In addition, the implementation of regulations related to tax rates adjustment provides evidence that the implementation of democracy has been implemented. The adjustment of tax brackets and rates has a positive impact on the community and the government so that the allocation of tax revenues can run optimally to support the welfare of the community.

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