Commenced in January 2007
Frequency: Monthly
Edition: International
Paper Count: 7

Taxation Related Abstracts

7 An Exposition of Principles of Islamic Fiscal Policy

Authors: Muhammad A. Ishaq, S. U. R. Aliyu

Abstract:

This paper on an exposition of Islamic fiscal policy attempts to discuss the basic principles of Islamic fiscal policy in an Islamic economy. The paper presents a number of definitions of the subject matter, its nature and its tools of application. Government spending, taxation and public borrowings were identified as the tools of the policy. The paper identifies zakat both as a veritable source of revenue and a major instrument of economic stabilization. Furthermore, the paper presents an algebraic 2-sector and 3-sector models from the basic Keynesian model. The paper posits that in view of uniqueness of its instruments, absence of interest rate in the economy and the policy’s derive towards socioeconomic justice and redistribution, Islamic fiscal policy is capable of stabilizing Islamic economy and ushering it into the path of long term economic growth and prosperity.

Keywords: Taxation, zakat, automatic built-in-stabilizers, government spending, Islamic fiscal policy

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6 Criminal Liability for Criminal Tax

Authors: Theresia Simatupang dan Rahmayanti

Abstract:

Tax Law is a legal product and therefore should be subject to the legal norms, both about this actions, implementation, and about the material. Law has always aimed at providing justice, and besides that the law as a tool used to organize the order or rule of law. tax classification of a crime in this is very necessary, because the crime of taxation is very detrimental to the country and is still very high in society and socialization associated with punishment in sentencing that would have to provide a deterrent for the perpetrators, so refer to the this, these criminal offenses can endanger the stability of the nation's economy and the country that require special snacks. The application of legal sanctions against the perpetrators of the crime of taxation already has a strong legal basis, namely UU KUP. UU KUP have loaded threat (sanctions) severe punishment for tax payers who commit offenses and crimes in the field of taxation, which is contained in Article 38, and Article 39, Article 41, Article 41 A, and 41 B as well as Article 43 of Law and Law No. 12 KUP about 1985 Land Tax and Building. Criminal sanctions against violators of the tax provision are important because tax payers sanctions for violating tax laws.

Keywords: Taxation, Accountability, tax crime, criminal liability

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5 Tax System Reform in Nepal: Analysis of Contemporary Issues, Challenges, and Ways Forward

Authors: Dilliram Paudyal

Abstract:

The history of taxation in Nepal dates back to antiquity. However, the modern tax system gained its momentum after the establishment of democracy in 1951, which initially focused only land tax and tariff on foreign trade. In the due time, several taxes were introduced, such as direct taxes, indirect taxes, and non-taxes. However, the tax structure in Nepal is heavily dominated by indirect taxes that contribute more than 60 % of the total revenue. The government has been mobilizing revenues through a series of tax reforms during the Tenth Five-year Plan (2002 – 2007) and successive Three-year Interim Development Plans by introducing several tax measures. However, these reforms are regressive in nature, which does not lead the overall economy towards short-run stability as well as in the long run development. Based on the literature review and discussion among government officials and few taxpayers individually and groups, this paper aims to major issues and challenges that hinder the tax reform effective in Nepal. Additionally, this paper identifies potential way and process of tax reform in Nepal. The results of the study indicate that transparency in a major problem in Nepalese tax system in Nepal, where serious structural constraints with administrative and procedural complexities envisaged in the Income Tax Act and taxpayers are often unaware of the specific size of tax which is to comply them. Some other issues include high tax rate, limited tax base, leakages in tax collection, rigid and complex Income Tax Act, inefficient and corrupt tax administration, limited potentialities of direct taxes and negative responsiveness of land tax with higher administrative costs. In the context, modality of tax structure and mobilize additional resources is to be rectified on a greater quantum by establishing an effective, dynamic and highly power driven Autonomous Revenue Board.

Keywords: Development, Taxation, corrupt, inefficient

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4 Assessing the Macroeconomic Effects of Fiscal Policy Changes in Egypt: A Bayesian Structural Vector Autoregression Approach

Authors: Walaa Diab, Baher Atlam, Nadia El Nimer

Abstract:

Egypt faces many obvious economic challenges, and it is so clear that a real economic transformation is needed to address those problems, especially after the recent decisions of floating the Egyptian pound and the gradual subsidy cuts that are trying to meet the needed conditions to get the IMF support of (a £12bn loan) for its economic reform program. Following the post-2008 revival of the interest in the fiscal policy and its vital role in speeding up or slowing down the economic growth. Here comes the value of this paper as it seeks to analyze the macroeconomic effects of fiscal policy in Egypt by applying A Bayesian SVAR Approach. The study uses the Bayesian method because it includes the prior information and no relevant information is omitted and so it is well suited for rational, evidence-based decision-making. Since the study aims to define the effects of fiscal policy shocks in Egypt to help the decision-makers in determining the proper means to correct the structural problems in the Egyptian economy, it has to study the period of 1990s economic reform, but unfortunately; the available data is on an annual frequency. Thus, it uses annual time series to study the period 1991: 2005 And quarterly data over the period 2006–2016. It uses a set of six main variables includes government expenditure and net tax revenues as fiscal policy arms affecting real GDP, unemployment, inflation and the interest rate. The study also tries to assess the 'crowding out' effects by considering the effects of government spending and government revenue shocks on the composition of GDP, namely, on private consumption and private investment. Last but not least the study provides its policy implications regarding the needed role of fiscal policy in Egypt in the upcoming economic reform building on the results it concludes from the previous reform program.

Keywords: Taxation, Fiscal Policy, government spending, structural vector autoregression

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3 Artificial Intelligent Tax Simulator to Minimize Tax Liability for Multinational Corporations

Authors: Sean Goltz, Michael Mayo

Abstract:

The purpose of this research is to use Global-Regulation.com database of the world laws, focusing on tax treaties between countries, in order to create an AI-driven tax simulator that will run an AI agent through potential tax scenarios across countries. The AI agent goal is to identify the scenario that will result in minimum tax liability based on tax treaties between countries. The results will be visualized by a three dimensional matrix. This will be an online web application. Multinational corporations are running their business through multiple countries. These countries, in turn, have a tax treaty with many other countries to regulate the payment of taxes on income that is transferred between these countries. As a result, planning the best tax scenario across multiple countries and numerous tax treaties is almost impossible. This research propose to use Global-Regulation.com database of word laws in English (machine translated by Google and Microsoft API’s) in order to create a simulator that will include the information in the tax treaties. Once ready, an AI agent will be sent through the simulator to identify the scenario that will result in minimum tax liability. Identifying the best tax scenario across countries may save multinational corporations, like Google, billions of dollars annually. Given the nature of the raw data and the domain of taxes (i.e., numbers), this is a promising ground to employ artificial intelligence towards a practical and beneficial purpose.

Keywords: Taxation, Law, Corporation, multinational

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2 The Characteristics of a Fair and Efficient Tax Auditing Information System as a Tool against Tax Evasion: A Theoretical Framework

Authors: Dimitris Balios, Stefanos Tantos

Abstract:

Economic growth and social evolution are connected to trust relationships in a society. The quality of the accounting information, the tax information system and the tax audit mechanism evolve multiple benefits in an economy. Tax evasion, the illegal practice where people and companies do not pay taxes, is a crime because of the negative effect in economy and society. In this paper, we describe a theoretical framework on the characteristics of a fair and efficient tax auditing information system which could be a tool against tax evasion, a tool for an economy to grow, especially in countries that face fluctuations in economic activity. We conclude that a fair and efficient tax auditing information system increases the reliability of tax administration, improves taxpayers’ tax compliance and causes a developmental trajectory for the economy.

Keywords: Taxation, Tax Evasion, auditing information system, auditing mechanism

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1 The Impact of Bequest Taxation on Human Capital Accumulation

Authors: Maciej Dudek, Robert Kruszewski, Janusz Kudla, Konrad Walczyk

Abstract:

In this paper, we study how taxation of bequests affects human capital formation in the long term and short term horizon. Our underlying model is an overlapping generation model (OLG) with some degree of altruism on the part of the ancestors' generation towards their descendants. We ask the question in three separate frameworks. First, we study a simple one-sector model where a proxy of human capital is wage income. It the steady-state -for CRRA utility function and human capital produced with non-decreasing returns -the taxation of bequests is neutral to the accumulation of human capital. In the second framework, neutrality applies to the growth rates of human capital, physical capital, and consumption. In this case, taxation increases the level of bequests, leading to a lower value of current consumption. Finally in we consider two periods model instead of infinite horizon model as long as the tax revenue is at least partially rebated back to the public, the fraction of human capital engaged in the process of formation of human capital increases with the tax rate on bequests. In other words, taxation of bequests is partially offset by an increase in human capital formation. Higher human capital allows the future generation to earn higher wages, and today's generation can find it optimal to endow the future generation with more human capital when taxation is imposed on physical capital transferred to the next generation.

Keywords: Taxation, Policy, Human Capital, bequests

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