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 Persepsi Keadilan dan Kepatuhan Pajak Pada Wajib Pajak Pengusaha dan Pekerja di Kota Salatiga

2021 ◽  
Vol 4 (2) ◽  
pp. 145-173
Author(s):  
Ferry Ayu Wardani
Keyword(s):  
Tax Compliance ◽  
Sampling Technique ◽  
T Test ◽  
Primary Data ◽  
Tax System ◽  
Significance Level ◽  
Tax Rate ◽  
Self Interest ◽  
The Government ◽  
Questionnaire Method

The purpose of this research is to provide a description of the perception of tax fairness and tax compliance on taxpayer businessmen and employee in city Salatiga. The samples of this research are businessmen and employees in Salatiga city which is using accidental sampling technique to choose the sample with. The data used in this research is primary data which was obtained directly from the respondents with questionnaire method. The method used in this research is descriptive statistic and t-test with 5% significance level. The results of this research indicate that (1) generally there is no difference in perception between businessmen and employees in dimentions of general fairness, exchange with the government, special provisions, tax-rate structure and self interest (2) employess are more than compliance compared businessmen with witholding tax system.

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 Pengaruh Tarif Pajak dan Probabilitas Audit terhadap Kepatuhan Pajak Penghasilan (Studi Eksperimen Laboratorium)

2014 ◽  
Vol 5 (1) ◽  
Author(s):  
Lintje Kalangi
Keyword(s):  
Laboratory Experiment ◽  
Income Tax ◽  
Tax Compliance ◽  
Model Analysis ◽  
Tax Rates ◽  
Individual Income ◽  
Tax Rate ◽  
Compliance Behavior ◽  
Individual Income Tax ◽  
Positive Effect

The objective of this research  is to analyze   the effect of tax rates, and the probability of audit on individual income tax compliance.This research is an explanatory  research, which done through  laboratory experiment, to explain the casual   relationships (causality)  between variables. Participants of  this experiment  consit of 30  students Master of Accounting and Accounting Professional  Program at Faculty of Economics, Sam Ratulangi University, Manado. The model analysis was of the research  using Normal Censored Tobit ).The results indicate that: (1)  tax rate has  positive effect on tax compliance behavior. (2) probability of audit has   positive effect on compliance tax and changes in probability  of audit level has different effect   on compliance tax.

scholarly journals Income Tax Issues on the Omnibus Law and Its Implications in Indonesia

2021 ◽  
Vol 12 (2) ◽  
pp. 164
Author(s):  
Prianto Budi Saptono ◽  
Cyntia Ayudia
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Tax Compliance ◽  
Electronic System ◽  
Tax Rates ◽  
Domestic Investment ◽  
Tax Rate ◽  
Income Tax Policy ◽  
The Government ◽  
Using Data

This research has two objectives. The first objective is to analyze the issue of income tax policy based on the idea of taxation omnibus law. In 2020, Law No. 36 of 2008 concerning Income Tax was amended twice as stipulated in Law No. 2 of 2020 and Law No. 11 of 2020 (Job Creation Law). The second objective is to analyze the implications of income tax policy changes on taxation practices in Indonesia. This research is a descriptive qualitative study using data collection techniques in documentation and literature studies. The research concludes that the omnibus law policy aims to encourage domestic investment funding. Income tax issues in Law No. 2 of 2020 include lowering the corporate income tax rate and imposing taxes on trade through an electronic system. Besides, the issue of income tax in Law No. 11 of 2020 includes tax subjects' determination, the territorial system's adoption, tax objects' exclusion, and changes to the provisions on dividends. The implication of the change in income tax policy on taxation practices is that taxes distort the economy. The delegation of regulations for reducing income tax rates to the government through government regulations creates legal uncertainty. Thus, it is necessary to have tax regulations with minimal complexity, not overlap, provide legal certainty, and further encourage voluntary tax compliance.

scholarly journals ASSESSMENT OF FAVOURABLENESS FOR THE TAX SYSTEM OF UKRAINE IN THE INTERNATIONAL CONTEXT

2019 ◽  
Vol 5 (2) ◽  
pp. 124 ◽  
Author(s):  
Valentyna Martynenko
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Administration ◽  
Tax Rates ◽  
Tax System ◽  
Tax Rate ◽  
The Government ◽  
Tax Payments ◽  
The Impact ◽  
Average Index

The purpose of the article is to study the background and key factors that ensured an increase in the ranking of the Ukrainian tax system favourableness from the 174th position to the 43-d position during 2005–2016 – the greatest progress in the whole history of the “Paying Taxes” ranking. Methodology. The research was made on the basis of the countries ranking method according to the tax system favourableness, conducted by the World Bank together with the consulting firm PricewaterhouseCoopers for the implementation of the annual “Paying Taxes” ranking. The ranking is based on the analysis of: taxes and mandatory deductions that a typical medium-sized enterprise must pay in the concerned year; the administrative burden connected with the payment of taxes and deductions; processes after filing and paying taxes. Another method used in the article is the regression analysis of the impact of the unified social tax rate, the corporate income tax rate, the personal income tax rate, the volume of tax revenues, consolidated budget revenues and gross domestic product (GDP) in actual prices on the ranking position of Ukraine in the “Paying Taxes”. Results. In course of the study, it was found that the increase of the ranking of Ukraine from the 174th to the 43-d position in the “Paying Taxes” during 2005–2016 became possible due to the liberalization of taxation for 2013–2017, in particular, the reduction of the corporate income tax rate by 7% and the unified social tax rate by 10%. Other factors are as such: improving the tax administration quality: reducing the time for registration, filing and tax payment from 2185 hours in 2005 to 328 hours in 2016, with the worldwide average index of 240 hours per year; reducing the number of tax payments from 98 in 2005 to 5 (the worldwide average index is 24 payments) in 2016. Practical implications. The result of the effective tax policy of the Government of Ukraine was the reduction of the total tax burden on business from 60.3% in 2005 to 37.8% in 2016 at the worldwide average index of 40.5% at the end of the investigated period. Also, during 2005–2016, the consolidated budget revenues grew from 131.3 to 782.7 billion UAH, including tax ones – from 100.7 to 650.8 billion UAH. Value/originality. Based on the results of the study, the author substantiated that the main factor of the significant progress of the tax system of Ukraine in the “Paying Taxes” ranking (from the 174th to the 43-d position during 2005–2016) was the liberalization of taxation by reducing the tax rates of corporate income tax and a unified social tax, as well as improving the quality and efficiency of tax administration.

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.

scholarly journals Taxing Micro, Small and Medium Enterprises in Yogyakarta: Regulation and Compliance

BESTUUR ◽  
2021 ◽  
Vol 9 (1) ◽  
pp. 59
Author(s):  
Siti Rahma Novikasari ◽  
Duc Quang Ly ◽  
Kerry Gershaneck
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Government Regulation ◽  
Small And Medium Enterprises ◽  
Tax Avoidance ◽  
Tax Compliance ◽  
Legal Compliance ◽  
The Government ◽  
Medium Enterprises ◽  
Compliance Constraints

<p>Government Regulation No. 46/2013 has not been optimal in providing legal compliance on taxation for Micro, Small, and Medium Enterprises (MSMEs), especially in Yogyakarta. This policy was evaluated and amended with Government Regulation No. 23/2018. The amendment in tax policy for MSME actors was this research background to examine: First, how does the final income tax policy impact MSME taxpayers' compliance in Yogyakarta? Second, what are the legal compliance constraints of MSME taxpayers? The method used in this research was a juridical empirical, supported with the statute and conceptual approach. The results showed that the amendment in the final income tax tariff policy from 1% to 0.5%, as well as provide legal certainty of the timeframe of taxation had a positive impact on increasing taxpayer compliance. There was an increase in the number of taxpayers to 41,000 in 2019, or an increase of 15.5% compared to the number of taxpayers in 2017. However, tariff reduction has not been the answer to taxpayer non-compliance, the Regional Office of the Directorate General of Taxes of the Special Region of Yogyakarta still found tax avoidance. Tax compliance constraints were also caused by taxpayers' distrust of the government, poor tax morale, and tax knowledge. The government needs to conduct a cooperative compliance approach in taxation policies based on trust and dialogue between taxpayers and the government to improve MSME taxpayer compliance.</p><p><strong>Keywords:</strong> Tax Compliance; Final Income Tax Regulation; Micro; Small; Medium Enterprises.</p>

scholarly journals Impact of Implementation of Goods and Service Tax on Indian Banking Sector

2018 ◽  
pp. 18-32
Author(s):  
Revathi R. ◽  
Madhushree ◽  
P. S. Aithal
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Value Added ◽  
Tax System ◽  
Tax Rate ◽  
Bank Branches ◽  
Goods And Services ◽  
The Government ◽  
One Year ◽  
The Impact

The banking sector is one of the biggest and revenue generating sector in our economy. Indiais a country with impressively splendid banks with sufficient capital and well-regulated rulesand regulations. One of the biggest transformations that the sector faced during this period isGST i.e., Goods and Service Tax, a new tax regime introduced in the midnight of 1 July2017. Now the new tax regime has become one year old and there are so many changeswhich happened in the banking sector during this one-year periods. Introduction of GST tothe banking sector was one the highly risky and challenging role for the government. GST isa replacement to the Value Added Tax (VAT) which was implied on goods and services. Themain purpose of studying the impact of implementation of GST is to avoid double taxationon goods and services. It is a self-regulated tax system with a simplifies tax regime whichreduces the multiplicity of tax. The purpose of this study is to know the challenges faced bythe Banking sector and its effects on the customers after the implementation of the GST.New tax regime made an incredible step by the abolish of centralized registration of thebanks. Now all the bank branches have to register under GST in each state for the smoothfunctioning. The tax rate has created an impression in the banking sector that the sector iscontributing much toward the economic growth of the country. Tax slabs is anotherimportant and critical thing discussed in this paper which has substantially increasedcompared to the old tax regime. Data for the study have been collected from secondary datasources such as journals, internet, and news articles. Using the ABCD qualitative analysistechnique, advantages, benefits, constraints, and disadvantages for both banks and thecustomers for payment of GST are identified.

Tax Expenditures and the Tax Reform Act of 1969 in the United States

2022 ◽  
pp. 1-26
Author(s):  
Seiichiro Mozumi
Keyword(s):  
United States ◽  
Income Tax ◽  
Public Perception ◽  
Tax Reform ◽  
The United States ◽  
Tax Revenue ◽  
Tax System ◽  
Federal Income Tax ◽  
Federal Taxation ◽  
The Government

Abstract In the United States, tax favoritism—an approach that has weakened the extractive capacity of the federal government by providing tax loopholes and preferences for taxpayers—has remained since the 1930s. It has consumed the amount of tax revenue the government can spend and therefore weakened the possibility of the redistribution of fiscal resources. It has also made the federal tax system complicated and inequitable, resulting in undermining taxpayer consent. Therefore, since the 1930s, a tax reform to create a simple, fair, and equitable federal income tax system with the capacity to raise revenue has been long overdue. Many scholars have evaluated the Tax Reform Act of 1969 (TRA69), which Richard M. Nixon signed into law on December 30, 1969, as one of the most successful steps toward accomplishing this goal. This article demonstrates that TRA69 left tax favoritism in the United States. Furthermore, it points out that TRA69 turned taxpayers against the idea of federal taxation, a shift in public perception that greatly impacted tax reform in the years to follow.

Measuring Revenue-maximizing Elasticities of Taxable Income

2016 ◽  
Vol 45 (2) ◽  
pp. 174-204 ◽  
Author(s):  
John Creedy ◽  
Norman Gemmell
Keyword(s):  
Income Tax ◽  
Tax Rates ◽  
Marginal Rate ◽  
Tax System ◽  
Tax Rate ◽  
Taxable Income ◽  
Wide Range ◽  
The Us ◽  
Marginal Tax Rates ◽  
The Right

This article considers the question of whether marginal tax rates (MTRs) in the US income tax system are on the “right” side of their respective Laffer curves. Previous attention has tended to focus specifically on the top MTR. Conceptual expressions for these “revenue-maximizing elasticities of taxable income” (ETI L), based on readily observable tax parameters, are presented for each tax rate in a multi-rate income tax system. Applying these to the US income tax, with its complex effective marginal rate structure, demonstrates that a wide range of revenue-maximizing ETI values can be expected within, and across, tax brackets and for all taxpayers in aggregate. For some significant groups of taxpayers, these revenue-maximizing ETIs appear to be within the range of empirically estimated elasticities.

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