VAT withholding tax and its impact on vat compliance: evidence from the Zimbabwe revenue authority

2021 ◽  
Vol 2021 (1) ◽  
pp. 228-243
Author(s):  
Blessings Majoni
Keyword(s):  
Public Finance ◽  
Developing Countries ◽  
Regression Analysis ◽  
Empirical Investigation ◽  
Value Added ◽  
Ordinary Least Squares ◽  
The Philippines ◽  
Difference In Differences ◽  
Withholding Tax ◽  
The Empirical Analysis

Value-added tax (VAT) withholding tax is a key instrument used in various tax administrations to curb revenue leakages that emanate from clients that charge VAT on their services and supplies and then fail to remit it to revenue authorities. The Zimbabwe Revenue Authority (ZIMRA) implemented VAT withholding in 2017 with the expectation that it would positively affect VAT compliance. The motivation of this study therefore arises from the knowledge that a number of developing countries are considering implementing a withholding tax mechanism on VAT. In addition, a number of developing countries such as the Philippines, Ethiopia and Ghana, have implemented VAT withholding tax with varying outcomes. Public finance literature on the empirical analysis of VAT withholding tax is, however, limited as it requires administrative data that most tax researchers are not privy to. This paper sought to undertake a more comprehensive empirical investigation of the direct effect of the introduction of VAT withholding tax on VAT compliance. To estimate the empirical effect of VAT withholding tax on VAT compliance, this paper exploited data of VAT registered clients in ZIMRA over a 24-month period. The study used an ordinary least squares (OLS) multiple regression analysis to investigate the effects of VAT withholding tax on VAT revenue. The study further used a difference-in-differences estimator by classifying VAT taxpayers into two groups. Empirical evidence indicates that there is a positive significant relationship between implementing VAT withholding tax and VAT revenue in the ZIMRA scenario.

scholarly journals The impact of government debt on public finance stability in Lithuania

2019 ◽  
Author(s):  
Liucija Birškytė
Keyword(s):  
Public Finance ◽  
Regression Analysis ◽  
Multiple Regression Analysis ◽  
Multiple Regression ◽  
Financial Stability ◽  
Government Debt ◽  
Ordinary Least Squares ◽  
Small Sample ◽  
Series Data ◽  
The Impact

Purpose – though the global financial crisis is well behind us several EU countries continue to experience problems with public finance stability and need to cope with the consequences of high public debt. The purpose of the article is to find the relationship between government debt and of public finance stability in Lithuania. Research methodology – in order to achieve the aim of the article Financial Stability Index (FSI) for Lithuania has been created. It is based on theory and previous research. To find the determinants of FSI the multiple regression analysis model was specified and tested using Ordinary Least Squares (OLS). Findings – the results of multiple regression analysis indicate the government debt has a statistically significant impact on FSI, ceteris paribus. Other findings of the research show that profit or loss of the non-financial sector, foreign trade balance as well as a foreign direct investment are significant determinants of public finance stability. Research limitations – one of the limitations of this research is the small sample size that has an impact on the validity and generalizability of the results. Having a longer time-series data or panel data for more countries would improve the robustness and applicability of research results. Practical implications – the results of the research provide guidance to policymakers in the public finance area. Originality/Value − this paper contributes to the scarce literature on government debt and other determinants of financial stability in Lithuania

scholarly journals An Analysis of Value-Added Agricultural Exports to Middle-Income Developing Countries: The Case of Wheat and Beef Products

1991 ◽  
Vol 23 (2) ◽  
pp. 141-154 ◽  
Author(s):  
Jung-Hee Lee ◽  
David Henneberry ◽  
David Pyles
Keyword(s):  
Developing Countries ◽  
Value Added ◽  
Ordinary Least Squares ◽  
Income Growth ◽  
Negative Effects ◽  
Middle Income ◽  
Agricultural Exports ◽  
Positive Effects ◽  
Beef Products ◽  
Import Share

AbstractThis study determined probable future directions in U.S. value-added agricultural exports to middle-income developing countries (MIDCs) under the assumption of continued income growth. Import share equations for U.S. bulk, semi-processed and value-added wheat or beef products, as a percent of total U.S. wheat or beef product exports to each MIDC, were econometrically estimated using the ordinary least squares (OLS) technique. The empirical results indicate that in most MIDCs, increases in real per capita income have negative effects on the import share of processed wheat products while having positive effects on the import share of bulk wheat. However, import shares of U.S. processed beef products are likely to increase with income growth in most MIDCs.

scholarly journals Impact of defense spending on unemployment in five countries from Asia

2015 ◽  
Vol 11 (3) ◽  
pp. 117-129
Author(s):  
Abdul Qayyum Khan ◽  
Muhammad Azam ◽  
Aznita binti Samsi ◽  
Chandra Emirullah ◽  
Mustofa Usman
Keyword(s):  
Regression Analysis ◽  
Empirical Investigation ◽  
The Philippines ◽  
Defense Spending ◽  
Annual Data ◽  
Domestic Investment ◽  
Positive Relation ◽  
Military Expenditures ◽  
The Impact ◽  
Unemployment Problem

The objective of this study is to examine empirically the impact of defense spending on unemployment along with a number of control variables for a set of five selected countries from Asia which include Cambodia, China, Malaysia, Pakistan, and the Philippines. For empirical investigation annual data over the period of 1992 to 2013 are used. While, prior to regression analysis, the data were sensibly checked using sundry of relevant tests. The empirical results reveal that defense spending is not a better option to overcome unemployment problem in most of the sample countries. Thus, the findings suggest that lower defense budget allocation will provide more resources for other sectors which are relatively more productive and can help to improve economic and social welfare of these selected countries from Asia. Besides decreased military expenditures, encouraging domestic investment and discouraging population growth can help reduce unemployment. Remittance appears to have a positive relation with unemployment, the implications of which need to be addressed by policymakers.

How Does Globalization Affect the Government's Public Finance?

2021 ◽  
pp. 49-61
Author(s):  
Irem Cetin
Keyword(s):  
Public Finance ◽  
Developing Countries ◽  
Least Squares ◽  
Public Debt ◽  
Government Expenditure ◽  
Ordinary Least Squares ◽  
Tax Revenue ◽  
Long Run ◽  
Indirect Taxes ◽  
Using Data

This chapter investigates the long-run effect of globalization on public finance using data of developing countries from 2005 to 2017. The present research makes a contribution to the literature from various aspects. Firstly, integration and cointegration properties of the variables are considered. Then, the cointegrating relationship between globalization and public finance indicators is estimated by employing the fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) estimators. The empirical results are mixed. Globalization influences both government expenditure and public debt positively and significantly in the long run, while it influences tax revenue negatively. Moreover, the effect of globalization on the increased share of indirect taxes in the long run is more than the effect on the increased share of direct taxes.

Taxable capacity and effort of value-added tax in Kenya

2021 ◽  
Vol 2021 (1) ◽  
pp. 189-210
Author(s):  
Jane Muguchu ◽  
Nelson H Wawire ◽  
Anthony Wambugu
Keyword(s):  
Developing Countries ◽  
Capital Investment ◽  
Stochastic Frontier ◽  
Value Added ◽  
Ordinary Least Squares ◽  
Tax Administration ◽  
Effort Estimation ◽  
Value Added Tax ◽  
Tax Effort ◽  
Development Objectives

Domestic tax revenue mobilisation has received great focus among developing countries in order to achieve the development objectives with less reliance on foreign aid. The effort to mobilise revenue in developing countries has been undermined by some challenges such as high levels of non-compliance, low taxable capacity and effort averaging 10 to 20 per cent compared to Organisation for Economic Cooperation and Development (OECD) countries, which collect 30 to 40 per cent of their gross domestic product (GDP). To achieve Kenya’s Vision 2030 development objectives, the tax administration is expected to collect over 20.7 per cent of GDP and ensure revenue growth of 10 per cent per annum (Republic of Kenya, 2007). This called for establishing how far the country is from reaching its maximum tax potential and the effect of various factors that determine the taxable capacity of the country. Emphasis was placed on value-added tax (VAT) due to its high revenueraising potential. Using the Ordinary Least Squares (OLS) estimation technique and maximum likelihood for stochastic frontier approach, the study estimated the taxable capacity and effort of value-added tax (VAT). The results indicated that capital investment, manufacturing and private credit as a per cent of GDP impacted positively on taxable capacity while inflation, exports and agriculture negatively affected taxable capacity. The tax effort estimation results indicated that the average tax effort between 2011 and 2015 was 0.5, thus classifying the country under low collection, high effort category. Therefore, broadening the tax base through increased investments, manufacturing and improving on the efficiency of tax administration is fundamental in enhancing revenue mobilisation.

scholarly journals Who Really Benefits from Consumption Tax Cuts? Evidence from a Large VAT Reform in France

2019 ◽  
Vol 11 (1) ◽  
pp. 38-63 ◽  
Author(s):  
Youssef Benzarti ◽  
Dorian Carloni
Keyword(s):  
Value Added ◽  
Consumption Tax ◽  
Difference In Differences ◽  
Firm Level ◽  
Employment Effects ◽  
Level Data ◽  
Price Effects ◽  
Firm Level Data ◽  
Material Goods ◽  
Firm Owners

This paper evaluates the incidence of a large cut in value-added taxes (VATs) for French sit-down restaurants in 2009. In contrast to previous studies, which only focus on the price effects of VAT reforms, we estimate the effects of the VAT cut on four groups: workers, firm owners, consumers, and suppliers of material goods. Using a difference-in-differences strategy on firm-level data, we find that: firm owners pocketed more than 55 percent of the VAT cut; consumers, sellers of material goods, and employees shared the remaining windfall with consumers benefiting the least; and the employment effects were limited. (JEL H22, H25, L83)

scholarly journals The Impact of B Corp Certification on Growth

2021 ◽  
Vol 13 (13) ◽  
pp. 7191
Author(s):  
Valerie Paelman ◽  
Philippe Van Cauwenberge ◽  
Heidi Vander Bauwhede
Keyword(s):  
Regression Analysis ◽  
Propensity Score ◽  
Panel Regression ◽  
Medium Term ◽  
Difference In Differences ◽  
Dual Purpose ◽  
Full Effect ◽  
The Impact ◽  
Positive Effect ◽  
Over Time

We empirically test whether B Corp certification affects the short- and medium-term growth rates of sustainable enterprises. These businesses are growing in popularity and prevalence but, due to their hybrid nature, often suffer from external credibility issues and competing internal logics. Because of the rigorous and time-involving audit procedure, B Corp certification potentially sends a credible signal about the sustainable nature of the enterprise to its stakeholders. In addition, the B Corp label could help to straighten out internal tensions and align the company towards its dual purpose. Hence, B Corp certification could contribute to company success. We observe 129 firms that were certified between 2013 and 2018 over a period between six years prior and five years post-certification. Using propensity score matching, we identify 129 non-certified matching companies. On this sample, we conduct a difference-in-differences panel regression analysis to investigate the effect of certification. Our dataset allows us to study how the effects of B Corp certification evolve over time, which was previously untested. Our study documents a positive effect of B Corp certification on turnover growth and also that this effect increases with the time since certification, implying that certification requires some time for its full effect to become apparent.

scholarly journals Institutional Reforms and Their Impact on Economic Growth and Investment in Developing Countries

2021 ◽  
Vol 13 (9) ◽  
pp. 4941
Author(s):  
Jin Zhao ◽  
Ghulam Rasool Madni ◽  
Muhammad Awais Anwar ◽  
Syeda Masooma Zahra
Keyword(s):  
Developing Countries ◽  
Economic Prosperity ◽  
Institutional Reforms ◽  
Difference In Differences ◽  
Human Interactions ◽  
Political Reforms ◽  
Vast Literature ◽  
Treatment Analysis ◽  
The Difference ◽  
The Impact

It is widely accepted that the economic and social system may be more efficient by reforming institutions. Institutional reforms are attempts to change the rules affecting human interactions and these reforms are fundamental for development and economic prosperity. The reforms can be divided into two categories; political and economic institutional reforms. It is need of the hour to determine the category of reform that is more suitable for developing countries. Moreover, a vast literature describes the impact of institutional reforms but little focused on exploring their impacts on macroeconomic activities. So, this study is an effort to determine the impact of institutional reforms on macroeconomic variables by considering the panel data of 122 developing countries covering the time span from 1996 to 2019. The study applied treatment analysis using the difference-in-differences technique to gauge the effects of reforms. Besides, it will be interesting to know the causes triggering the institutional reforms in developing countries. The findings of the study reveal that economic reforms are more important as compared with political reforms to grow the economies. The countries focusing on political reforms are not able to overcome the economic crisis. Moreover, both types of reforms do not cause each other in these countries.

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