Corporate Tax Cuts and Fiscal Slippage

2020 ◽  
Vol 68 (2) ◽  
pp. 281-289
Author(s):  
Rajat Deb
Keyword(s):  
Fiscal Deficit ◽  
Level Playing Field ◽  
Corporate Tax ◽  
Tax Rate ◽  
Playing Field ◽  
Finance Minister ◽  
Doing Business ◽  
Short Run ◽  
The Government ◽  
Stimulus Package

The Union Finance Minister on 20 September 2019 announced the highest corporate tax rate cuts in the last 28 years as a level-playing field for both the existing and green-field firms for turning around the sluggish economy. The stimulus package, notwithstanding, has likely to accelerate the demand in the short run, but to increase the fiscal deficit inasmuch, the government would increase its spending through borrowings, which could lead to fiscal slippage. Instead of excessive dependence on the fiscal measures, the government should initiate economic and judicial reforms for accelerating the growth and improving doing business in the country.

scholarly journals Faktor Penentu Tarif Pajak Efektif Pada Perusahaan Kesehatan: Sebelum dan Saat Covid-19

2021 ◽  
Vol 26 (3) ◽  
pp. 412
Author(s):  
Anindita D. Pinastika, Ferry Irawan
Keyword(s):  
Ownership Structure ◽  
Health Sector ◽  
Tax Rates ◽  
Corporate Tax ◽  
Effective Tax Rate ◽  
Tax Rate ◽  
Tax Management ◽  
State Tax ◽  
Corporate Tax Rates ◽  
The Government

The pandemic of Covid-19 had attacked and contribute to the Indonesia’ economics negatively. State tax revenues could not be achieved given the restrictions on activities that were intensified to prevent the spread of virus. Incentives issued by the government are one of the factors causing the decline in state revenues, one of which is in the form of lowering corporate tax rates. The effective tax rate used in measuring corporate tax management is tested with related-parties transaction, profitability, leverage, and ownership structure variables. The effect of this variable is then compared in 2019 and 2020 to observe whether there is a difference before and during the pandemic. The research was conducted on health sector companiesas a sector that was positively affected by the pandemic. The results of the study show that leverage has an effect on the effective tax rate (ETR) in 2020 while ownership structure has an effect on the ETR in 2019. The effective tax rate of health sector companies, which allegedly decreased due to incentives from the government, has actually increased during the pandemic.

Indonesia’s e-commerce growth faces multiple obstacles

2019 ◽  
Keyword(s):  
East Asia ◽  
Personal Data ◽  
South East Asia ◽  
Multiple Constraints ◽  
Level Playing Field ◽  
Content Type ◽  
Playing Field ◽  
The Government ◽  
Multiple Obstacles ◽  
Future Growth

Subject E-commerce outlook. Significance Indonesia’s e-commerce sector is booming. The government is adopting business-friendly regulations, but the sector’s future growth still faces multiple constraints. Impacts Jokowi’s recent re-election as president promises continuity to investors and policy inertia in areas such as personal data legislation. The lack of personal data protections makes Indonesia a laggard in South-east Asia. Bricks-and-mortar businesses, facing unequal tax burdens, will pressure the government for a level playing field.

scholarly journals Modelling the synergy between fiscal incentives and foreign direct investment in Ghana

2020 ◽  
Vol 22 (2) ◽  
pp. 325-334
Author(s):  
Adamu Braimah Abille ◽  
Desmond Mbe-Nyire Mpuure ◽  
Ibrahim Yahaya Wuni ◽  
Peter Dadzie
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Impact ◽  
Corporate Tax ◽  
Test Technique ◽  
Fdi Inflows ◽  
Content Type ◽  
Tax Rate ◽  
Fiscal Incentives ◽  
Short Run

PurposeThe purpose of the paper was to investigate the role of fiscal incentives in driving foreign direct investment (FDI) inflows into the Ghanaian economy based on data from 1975 to 2017 with the Eclectic paradigm as the theoretical basis. FDI inflows was the dependent variable whiles trade openness, corporate tax rate, exchange rate and market size were the independent variables with corporate tax rate as the main explanatory variable of interest.Design/methodology/approachThe autoregressive distributed lag (ARDL) bounds test technique was employed to investigate Cointegration in the model. The results showed the presence of cointegration among the variables.FindingsThe results revealed that corporate tax rates have a significant negative impact on FDI inflows into the Ghanaian economy in the long run and significant positive impact on FDI inflows in the short run. In the context of Ghana, the positive short-run relationship observed is attributed to the lag effect of tax policy on FDI inflows.Research limitations/implicationsOne obvious limitation of the research is that, it does not identify the specific foreign businesses that are more deserving of a low corporate rate and to what extent can that boost FDI inflows in Ghana. Another limitation is that the data analyzed in the paper is exclusively for Ghana and the findings may not be generalized for other countries.Practical implicationsBased on the research findings, it is recommended that the Ghana Revenue Service (GRA) restructures the corporate tax regime in the country to deal with the policy lapses. It is also recommended that low corporate rates should be maintained especially in respect of foreign companies that are into the production of goods and services for which indigenous companies in Ghana have a comparative disadvantage in order to drive FDI into the Ghanaian economy.Originality/valueThis paper is unique for providing up to date and dynamic insights into the tax incentive and FDI nexus in the Ghanaian context.

DOES FISCAL DEFICIT CROWD OUT PRIVATE CORPORATE SECTOR INVESTMENT IN INDIA?

2016 ◽  
Vol 64 (05) ◽  
pp. 1201-1224 ◽  
Author(s):  
RANJAN KUMAR MOHANTY
Keyword(s):  
Negative Impact ◽  
Investment Decision ◽  
Private Investment ◽  
Fiscal Deficit ◽  
Corporate Sector ◽  
Significant Negative Impact ◽  
Short Run ◽  
Financing Pattern ◽  
The Government ◽  
The Impact

This paper examines the impact of fiscal deficit and its financing pattern on private corporate sector investment in India, for the period from 1970–1971 to 2012–2013. Using Autoregressive Distributed Lag (ARDL) Models, the study finds that fiscal deficit crowds out private investment both in the long run and in the short run. The results also show that internal (domestic) financing of fiscal deficit has significant negative impact on private investment but external (foreign) financing of fiscal deficit has insignificant effect. In the short run, availability of bank credit plays a more important role in investment decision making than the rate of interest in India. The study suggests that government should maintain the fiscal deficit within a sustainable level by reducing its unnecessary non-developmental expenditure, subsidies etc. The government should restructure its financing pattern of fiscal deficit since internal financing has a significant negative impact on private investment.

scholarly journals Relationship between Foreign Direct Investment and Company Taxation: Case of Bangladesh

2016 ◽  
Vol 3 (1) ◽  
pp. 11-14
Author(s):  
Alim Al Ayub Ahmed
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Significant Relationship ◽  
Direct Investment ◽  
Annual Reports ◽  
Corporate Tax ◽  
Tax Rate ◽  
Independent Variable ◽  
Company Taxation ◽  
The Government

This study looks at the association between foreign direct investment and company taxation in Bangladesh from 2001-2010. The annual reports were sourced from the Bangladesh Bank Bulletin, Bangladesh Bureau of Statistics (BBS) and World Bank which was analyzed using Descriptive Statistic, correlation and regression. The independent variable corporate taxation was measured using corporate tax rate (CTR) whilst dependent variable foreign direct investment was measured using FDI net inflow (% of GDP). GDP, exchange rate and inflation rate were used as control variables. The result showed negative significant relationship between CTR and FDI whereas exchange rate and FDI indicated negative insignificant relationship. On the other hand, GDP was positively insignificantly related with FDI whilst inflation had positive significant relationship with FDI. Based on the result, the study suggested that there is require for the government to lo trim down corporate tax rate in order to create a centre of attention FDI into the country.  

Loss of Employment, Lockdown Measures and Government Responses in Malaysia during the Covid-19 Pandemic: A Note

2021 ◽  
Vol 22 (3) ◽  
pp. 1525-1549
Author(s):  
Muzafar Shah Habibullah ◽  
Mohd Yusof Saari ◽  
Sugiharso Safuan ◽  
Badariah Haji Din ◽  
Anuar Shah Bali Mahomed
Keyword(s):  
Job Loss ◽  
Positive Association ◽  
Distributed Lag ◽  
Long Run ◽  
Ardl Approach ◽  
Short Run ◽  
Auto Regressive ◽  
The Government ◽  
The Relationship ◽  
Stimulus Package

In this paper, we use daily administrative data from January 25, 2020 to December 31, 2020 to examine the relationship between job losses and the Malaysian lockdown measures. The Auto Regressive Distributed Lag (ARDL) approach is used to estimate both the long-run and short-run models. The results of the Bounds F-test for cointegration reveal that there is a long-run link between job losses and the Malaysian government lockdown measures (both linear and non-linear). The positive association between job loss and lockdown measures shows that as the lockdown gets tighter, more people will lose their jobs. However, as time passes, especially in conjunction with the government stimulus package programmes, job losses decrease.

Tax justice

2021 ◽  
pp. 197-214
Author(s):  
Frédéric Mérand
Keyword(s):  
Tax Policy ◽  
European Parliament ◽  
Level Playing Field ◽  
Corporate Tax ◽  
Tax Base ◽  
Tax System ◽  
French Government ◽  
Playing Field ◽  
Political Work ◽  
The Common

After his initial success in tax policy, the Moscos became more ambitious. Pushed by the French government and in competition with the OECD, they promoted an overhaul of the entire European tax system that would have allowed member states to tax multinationals more effectively, including a digital tax on the so-called GAFAs and the Common Consolidated Corporate Tax Base (CCCTB), creating a level playing field for corporate taxation. The commissioner promoted his ideas in different forums, including the G20 and in Washington. But after two years, this political work lost momentum, as a handful of governments managed to veto efforts in the Council. Despite the support of the European Parliament, the Commission’s efforts stalled in the Council, where the opposition of tax-light countries such as Ireland prevailed.

Climate extraction and supply chains of data

2020 ◽  
Vol 42 (7-8) ◽  
pp. 1095-1114 ◽  
Author(s):  
Patrick Brodie
Keyword(s):  
Data Center ◽  
Data Centers ◽  
Critical Infrastructure ◽  
Natural World ◽  
Corporate Tax ◽  
Tax Rate ◽  
Transnational Companies ◽  
The Government ◽  
Global Data ◽  
Cool Climate

The global data center industry relies on what this article defines as ‘climate extraction’. Through this peculiar but critical infrastructure for global Internet operations, a focus on Ireland reveals the entanglements of state, corporate, and environmental actors within the extractive calculations of transnational companies. Ireland has been advertised to and by data center developers because of its ‘cool’ climate while downplaying the importance of its low corporate tax rate and the government and planning system’s favorable treatment of big tech companies. Public discourses around big tech ‘greenwash’ power and contribute to a material climate (both atmospheric and infrastructural) from which value can be extracted. This is achieved by extracting for and from data circulation through the built and ‘natural’ environment. This article articulates the ways in which the spatial development of data centers as ‘strategic infrastructure’ contributes to the ongoing naturalization of capital and state power’s entanglements with the so-called natural world through technological systems.

scholarly journals Deferred Tax Positions under the Prism of Financial Crisis and the Effects of a Corporate Tax Reform

2015 ◽  
Vol 2 (2) ◽  
pp. 21-58 ◽  
Author(s):  
Evangelos Chytis ◽  
Evangelos Koumanakos ◽  
Spiridon Goumas
Keyword(s):  
Financial Crisis ◽  
Policy Design ◽  
Economic Recession ◽  
Corporate Tax ◽  
Tax Reforms ◽  
Tax Rate ◽  
Deferred Tax Assets ◽  
Corporate Behavior ◽  
Short Run ◽  
Deferred Tax

The effects of corporate tax reforms in reported profits and firms' financial position have been extensively studied in the literature. However, only few studies disaggregate deferred tax items to jointly explore political implications and aspects of corporate behavior around such reforms. Greece's recent financial crisis and economic recession provides an intriguing setting for examining possible incentives and consequences of substantial tax rate changes, such as the 6% increase imposed by the Greek Government in year 2013. Results reveal a totally different picture between financial and non-financial firms, with the former being clearly favored, at least from this short-run effect. These findings seem to coincide with the view that tax policy design is usually shaped by taking into consideration powerful groups' interests. Regarding probable Determinants of Deferred Tax Assets for Tax Loss Carry forwards, the authors find that firms the audit firm may significantly affect recognized amounts due to firm specific internal guidelines and due to the overall quality of the audit.

scholarly journals Effect of Corporate Taxation on the Profitability of Firms in NIGERIA

2019 ◽  
Vol 11 (1(J)) ◽  
pp. 191-201
Author(s):  
Olaoye Clement Olatunji ◽  
Alade Elizabeth Oluwatoyin
Keyword(s):  
Value Added ◽  
Secondary Data ◽  
Corporate Taxation ◽  
Least Square ◽  
P Value ◽  
Value Added Tax ◽  
Corporate Tax ◽  
Tax Rate ◽  
Withholding Tax ◽  
The Government

The paper examined the effect of corporate taxation on the profitability of some selected firms in Nigeria from 2007 to 2016 using secondary data which was sourced from various publications of the firms’ financial report. The study employed pooled ordinary least square as the estimation technique. The analytical results revealed that the coefficient of corporate tax on profit after tax was positive with the value of 2.418830 and its P-values were 0.0000, the coefficient of value-added tax was 14.51298 and its p-value was 0.0000. Equally, the coefficient of withholding tax was positive with the value of 7.256489 with p-value 0.0000. Furthermore, education tax result depicts that the coefficient is 36.28245 and it p-value is 0.0000. However, the study concluded that corporate tax rate and education tax as the major taxes paid by companies have positive and significant effects to influence profit after tax. It is also clinched that value-added tax rate and withholding tax being used as other variables that could have effects on profit after tax equally revealed positive and significant effects on profit after tax. Therefore, the study recommended that the government and relevant tax authorities should improve in the administration of corporate taxes to avoid non-compliance

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