Designing a Tax Incentive Scheme: The Case of a Wage Tip

This study aims to assess the effectiveness of the COVID-19 tax incentives that the government has issued. It focused on Micro, Small, and Medium Enterprises (MSMEs) taxpayers to participate in COVID-19 tax incentives. Using a qualitative method, this study used in-depth interviews with 2 informants who were a tax consultant and a small-medium enterprise accountant. The findings show that the effectiveness of the COVID-19 tax incentive is still lacking, and it is in line with the participation of MSMEs that is still low in utilizing tax incentives. The low participation of MSMEs in utilizing tax incentives can be seen from the data, which shows that after 5 months of running the program, out of around 2.3 million MSMEs, only 200,000 have taken advantage of this facility. The tax consultant states that the scheme that has been implemented in mitigating the financial burden of MSMEs is not effective for the object of incentives in not substantial. The informant suggests incentives to cover value-added tax also. The government is expected to create a new and better incentive scheme. The new incentive scheme is also to provide an equilibrium of responsibility for both government and society. This paper contributes theoretically by examining new types of tax incentives, namely COVID-19 tax incentives, and helping policymakers make better tax incentive schemes in the future.

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R&D tax incentive scheme and in-house R&D expenditure: evidences from Indian firms

Journal of Advances in Management Research ◽

10.1108/jamr-05-2019-0080 ◽

2019 ◽

Vol 17 (3) ◽

pp. 333-349 ◽

Cited By ~ 2

Author(s):

Manu Jose ◽

Ruchi Sharma ◽

Madan Dhanora

Keyword(s):

Innovation Policy ◽

Raw Materials ◽

Manufacturing Firms ◽

Incentive Scheme ◽

Tax Credit ◽

Firm Innovation ◽

Content Type ◽

Tax Incentive ◽

Pharmaceutical Industries ◽

The Impact

Purpose The purpose of this paper is to examine the impact of research and development (R&D) tax credit scheme on participating firm’s R&D expenditure in Indian manufacturing firms. Design/methodology/approach Tobit model is used to estimate the impact of R&D tax credit scheme on R&D expenditure. Findings The results suggest that there is a positive and significant effect of R&D tax incentive scheme on R&D. The introduction of the R&D tax credit scheme and the policy amendment are positively influencing R&D investment of the participating firms. However, industry-specific results suggest that these positive results are mainly driven by electronic and pharmaceutical industries. The study reveals that import of technology, import of raw materials, competition, profitability, age and leverage position of the firm also positively influence the R&D intensity of the firm. Research limitations/implications The study is limited to the listed manufacturing firms in India. Practical implications The study evaluates the innovation policy to help the policymakers in designing an effective policy. Originality/value The paper provides evidence on the impact of R&D tax incentive scheme on firm innovation to explain the factors that contribute to the R&D expenditure of the participating firms. It also summarises the effectiveness of tax incentive scheme on different industry groups and firm size.

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Optimal research and development expenditures under an incremental tax incentive scheme

Operations Research Letters ◽

10.1016/0167-6377(85)90038-0 ◽

1985 ◽

Vol 4 (2) ◽

pp. 85-90 ◽

Cited By ~ 5

Author(s):

P L'Ecuyer ◽

A Haurie ◽

A Hollander

Keyword(s):

Research And Development ◽

Incentive Scheme ◽

Tax Incentive

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Canadian research: Tax incentive scheme goes awry

Nature ◽

10.1038/320673b0 ◽

1986 ◽

Vol 320 (6064) ◽

pp. 673-673

Author(s):

Joseph Palca

Keyword(s):

Incentive Scheme ◽

Tax Incentive ◽

Canadian Research

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Tax incentives of China’s investments in Zabaykalsky Krai: implementation of behavioral economic models

Финансы и управление ◽

10.25136/2409-7802.2020.2.33353 ◽

2020 ◽

pp. 69-84

Author(s):

Evgeniya Mikhailovna Popova ◽

Irina Vitalevna Mezentseva

Keyword(s):

Behavioral Economics ◽

Tax Incentives ◽

Human Mind ◽

Investment Climate ◽

Investment Activity ◽

Investment Projects ◽

Tax Incentive ◽

Regional Budget ◽

Subjective Aspect ◽

Investment Process

Currently, the Russian regions apply a vast array of tools for regulating the investment process, including tax incentives. Active use of tax preferences is dictated by the fact that in the conditions of regional budget deficit, tax incentives, unlike subsidies, do not require direct budget expenditures for stimulating investment activity. However, the world experience demonstrates that tax incentives do not fall under the group of factors that strongly affect investment decisions. For determining the degree of preference of tax incentives in relation to other measures of regional support, a survey was carried among Chinese investors, who implement investment projects on the territory of Zabaykalsky Krai. The survey was based on a method of hierarchical analysis based on the special matrices by filed in by the investors. The acquired results displayed that out of ten measures of state support, tax incentives hold the eighth place. The calculated coefficient of the significance of tax incentives testifies to the low attractiveness of fiscal stimuli for the Chinese investors. The authora attempted to find the reasons for tax incentive not being in demand. The scientific novelty of this work consists in conducting the analysis of regional legislation that regulates the order of granting investment tax incentives based on the concept of behavioral economics. In the course of application of the provisions of behavioral economics, emphasis was made on the subjective aspect of the mechanism of preferential taxation. The reasonableness of considering such peculiarities of human mind as cognitive inertia and relativity is substantiated with regards to arranging the structure of tax incentives that would allow increasing the importance of tax incentives in formation of investment climate on the territory of Zabaykalsky Krai. The authors make recommendations on increasing the attractiveness of tax incentives among Chinese investors based on the concept of reference point and the effect of loss aversion.

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