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Currently, aspects of tax reform are being actively discussed and discussed, and proposals are increasingly being put forward to abolish the value-added tax and return to its origins-the turnover tax. Of course, each of them has its own «pros» and «cons» of using a particular tax system. But the transition from VAT to turnover tax is natural, and to justify this in this article, it is proposed to conduct a comparative characteristic of them.

Industrial tax, based on archaic solutions, has aroused opposition from the beginning of its operation, especially in the context of the introduction of the trade tax, which was given the features of a consumption tax, and the maintenance of industrial certificates were given the features of income tax. It should also be remembered that the industrial tax acts themselves were extremely complicated in their content, the legislator in one act tried to regulate as many economic issues as it was possible. Adopted solutions towards the industrial tax allowed the legislator to obtain a permanent influence on the state budget, the size of which, however, varied depending on the period and the social and economic situation, on average constituted 10% of the total revenues of the state budget. Attempts to rationalize the system of collecting industrial tax and break with the principle of the unevenness of this tax, based on the external characteristics of the enterprise, and finally with the mechanical combination of income tax and turnover tax, was made only by the Act of 25 April 1938 on turnover tax. The tax reform was the result of changes in the tax system long awaited by entrepreneurs, mainly in the area of ??industrial tax. Unfortunately, due of the start of war, the regulations did not enter into force.

Countries seeking to address the challenges of taxation in a digitalizing economy have proposed or enacted indirect digital services taxes (DSTs) rather than income taxes in part to attempt to avoi...

We study the tax compliance effects of value-added tax (VAT) by exploiting the reform replacing business tax (BT) with VAT in China beginning in 2012. We find that replacing the BT with VAT significantly increases reported sales and reported cost for treated firms, and the impact is much stronger among business-to-business (B2B) transactions than business-to-consumer (B2C) transactions. Buyers in B2B transactions have stronger incentives to claim invoices to credit their output VAT and reduce their tax liabilities. In B2C transactions, individual consumers do not need VAT credit, so the reform has little impact. Moreover, firms report higher costs after the reform to offset their tax liability. The results indicate that VAT has higher tax compliance than a turnover tax and the VAT system has self-enforcing properties in B2B transactions.

The article is aimed at studying the Soviet fiscal policy and its effects on the country’s economic development in 1926–1940. We used a historical and logical method to research the effectiveness of the two instruments of taxation – the turnover tax and tax charges on profits – and their role in the impressive achievements of the Soviet economy. To analyze and compare the data we used the key indicators of economic development and tax collection for 1926–1940. The results of the analysis have confirmed our hypothesis that the turnover tax and tax charges on profits along with price regulation and planned economy led to the formation of a cost-effective economic model in the USSR. We have shown that this model ensured constant reduction of production costs, accelerated growth of the urban population and unprecedented expansion of heavy industry. Radical simplification of the tax system, which was a part of the 1930s reform, not only had a considerable fiscal effect but also affected social development. The turnover tax and tax charges on profits allowed the government to mobilize considerable resources for investment to stimulate growth in production of heavy industry at a rate of 10–16% a year, which created a multiplier effect in the whole economy. However, financial resources were mobilized at the expense of consumers, since higher taxes were mainly imposed on enterprises of light industry and food industry. This led to “commodity hunger”, the introduction of ration cards, and strict administration. It is concluded that the distinctive feature of the Soviet fiscal policy was its complex nature and subordination to the single goal of the country’s industrialization. For citation Sodnomova S. K., Leontyeva Yu. V. Fiscal policy and incentives for development of the Soviet planned economy in the industrialization period. Journal of Tax Reform. 2019;5(1):70–82. DOI: 10.15826/jtr.2019.5.1.061 Article info Received December 20, 2018; accepted March 25, 2019

In view of the objective reality that the market prices stay high in recent years, inflation which continues to rise is not effectively inhibited, combined with the previous economic circles who attributed the reasons to inflation for commodity supply and demand, the issuance of money and neglect the role of tax factors led to national governance inflation decision-making that is limited by the phenomenon. By means of comparative analysis, Granger causality analysis and Augmented Dickey-Fuller test, we dissect the external disturbance and endogenous factors of influencing inflation, select the 2001-2016 tax index and CPI index and make an empirical research of the interference from government taxation to price and inflation trends and strength. It is approved there is single causal relationship between tax and price rising, and sums up that government taxation can promote inflation, but inflation can’t lead to tax rising. Of course, this conclusion can also provide theoretical support for national governance of inflation.

The adoption of the value-added tax the Democratic Republic of Congo in 2012 led to price increases that are thought to adversely affect the welfare of most Congolese households. To date, research has not yet examined the poverty and distributional impacts of this tax reform. Using data from the 2012 Living Standards Measurement Survey, this paper investigates whether the current value-added tax regime, with its exemptions, is progressive. Relying on the Quadratic Almost Ideal Demand System and several welfare measures, the analysis finds that the adoption of the value- added tax erodes the purchasing power of all Congolese households by a factor of 10 to 12 percent. Yet, the value-added tax appears to be highly progressive. Households in the top food expenditure quintile bears approximately 40 percent of the welfare loss compared with less than 10 percent among households in the bottom food expenditure quintile. Other inequality measures, such as the Gini coefficient, further support this finding that the value-added tax is progressive. Finally, the study finds that the adoption of the value-added tax leads to a worsening of the food poverty headcount by approximately 1.2 percentage points.

Presumptive income taxes in the form of a tax on turnover for SMEs are pervasive as a way to reduce the costs of compliance and administration. We analyze a model where entrepreneurs allocate labor to the formal and informal sectors. Formal sector income is subjected either to a corporate income tax or a tax on turnover, depending on whether their turnover exceeds a threshold. We characterize the private sector equilibrium for any given configuration of tax policy parameters (corporate income tax rate, turnover tax rate, and threshold). Given private behavior, social welfare is optimized. We interpret the first-order conditions for welfare maximization to identify the key margins and then simulate a calibrated version of the model.

The author tried to point at the historical aspects of development of value added tax in Slo-vakia. Her aim was to analyze the formation and subsequent changes of turnover tax as the most important consumption-based tax. The historical development was accomplished by the present legal regulation of value added tax.

How should developing countries tax corporate income? This paper studies this question in Costa Rica, where firms face discontinuously higher average tax rates on profits when their revenue marginally increases. The paper combines a discontinuity and a bunching design to estimate the profit elasticity and separate it into revenue and cost elasticities. Faced with higher tax rates, firms slightly reduce revenue but considerably increase costs, generating a large elasticity of profits. In this context, the revenue maximizing rate for profit taxation is below 25 percent and broadening the tax base while lowering the rate can increase revenue for these firms by 80 percent.

In the last decades, VAT/GST systems have proliferated across the globe and have usually replaced any eventual cumulative turnover taxes or retail sales taxes (RST) previously operated in the respective country of adoption. However, the input VAT credit inherent to a VAT/GST facilitates some particular types of tax fraud which are absent in a turnover tax or RST system, especially because the entitlement of the business customer to the tax credit is normally not contingent upon the prior payment of the corresponding VAT/GST liability by the supplier. The ensuing ‘VAT gap’ has fueled the debate in the EU whether VAT should be transformed into a so-called ‘general reverse charge regime’ that would be equivalent to a RST while maintaining the invoice and audit trail of a VAT system . The reform project has gained momentum recently due to a proposal by the Commission which would allow the temporary application of a generalised reverse charge mechanism by Member States that so desire. This article discusses the pros and cons of such a hybrid system.

This article analyses the relationship of tax contribution and income gap between urban and rural areas. First of all, we comb their relationship from theoretical knowledge. Secondly, we use 2000- 2014 panel data of 29 provinces and cities in our country (except Tibet) to establish the fixed effects model for analysis. Results show that the improvement of tax contribution will expand the income gap between urban and rural areas. This is due to that turnover tax contribution is the most important part in the tax contribution. From the structural analysis, improvement of turnover tax and income tax contribution are not conducive to narrow the income gap between urban and rural areas. The improvement of property tax contribution is conducive to narrow the income gap between urban and rural areas. Finally, from the empirical results, we can give the policy suggestion of structural tax cuts and others.

Value Added Tax (VAT) is a consumption-based taxes imposed on the added value of a good or service transacted. In Indonesia in 1983 has implemented a turnover tax (VAT) and then on April 1, 1985 is replaced with the name of the Value Added Tax (VAT). if there is excess pembayaan value-added tax as reported in a notification letter (SPT) or if there are errors that caused the collection or deduction of tax overpayment is called restitution. This right can be accomplished after submitting a request followed by examination and study of the truth of the tax payment. The research problem is how the level of restitution to the acceptance of value added tax in Manokwari service office and how the inspection process of restitution in Manokwari service office. This study uses a quantitative that describes the influence of restitution and value-added tax receipts, as well as qualitatively explain the inspection process of restitution in the Tax Office Primary Manokwari. Designs in this study is in Sequential Explanatory. The data used in the data restitution, value added tax receipts 2010 - 2015 and the process of examining the restitution. Equipment is simple regression analysis that describes the relationship of the independent variable (X) is a value-added tax refunds and the dependent variable (Y) is a value-added tax receipts. Further see restitution process performed by verification that the procedure examination procedure for restitution under the rules and the implementation of restitution checks by the tax office manokwari. The results obtained in the regression is the coefficient of determination (KD) obtained was 23%, which can be interpreted to mean that the independent variable is restitution accounted for 23% of the variable Y is tax revenue and 77% are influenced by other factors outside of the variable tax refunds ( X). the correlation value is 0.480, with significant amounting to 0.336 which means the linear regression model is weak and variable restitution does not affect the variable tax revenue. The inspection process refunds in the Tax Office Manokwari take place in accordance with Regulation of the Minister of Finance No. 184 / PMK.03 / 2015 on Procedures for Examination., Pajak Pertambahan Nilai (PPN) adalah suatu jenis pajak yang berbasis konsumsi yang dikenakan atas nilai tambah dari suatu barang atau jasa yang ditransaksikan. Di Indonesia pada tahun 1983 telah menerapkan pajak pejualan (PPn) dan kemudian pada 1 April 1985 diganti dengan nama Pajak Pertambahan Nilai (PPN). apabila terdapat kelebihan pembayaan pajak pertambahan nilai sebagaimana dilaporkan dalam Surat Pemberitahun (SPT) atau apabila terdapat kekeliruan pemungutan atau pemotongan yang menyebabkan kelebihan pembayaran pajak yang disebut restitusi. Hak ini dapat ditunaikan setelah mengajukan permohonan yang ditindaklanjuti dengan pemeriksaan dan penelitian akan kebenaran pembayaran pajak. Masalah penelitian adalah bagaimana tingkat restitusi terhadap penerimaan pajak pertambahan nilai di kantor pelayanan manokwari dan bagaimana proses pemeriksaan restitusi di kantor pelayanan manokwari. Penelitian ini menggunakan mix method, yaitu kuantitaif yang menjelaskan tentang pengaruh restitusi dan penerimaan pajak pertambahan nilai, serta kualitatif yang menjelaskan proses pemeriksaan restitusi di Kantor Pelayanan Pajak Pratama Manokwari. Desain dalam penelitian ini yaitu secara Sequential Explanatory. Data yang digunakan data restitusi, penerimaan pajak pertambahan nilai 2010 – 2015 dan Proses pemeriksaan restitusi. Alat analisis adalah regresi sederhana yang menggambarkan hubungan variabel bebas (X) adalah restitusi pajak pertambahan nilai dan variabel terikat (Y) adalah penerimaan pajak pertambahan nilai. Selanjutnya melihat proses restitusi yang dilakukan dengan verifikasi yaitu melihat prosedur tatacara pemeriksaan restitusi berdasarkan peraturan dan penyelenggaraan pemeriksaan restitusi oleh kantor pelayanan pajak manokwari. Hasil yang diperoleh secara regresi adalah Nilai koefisien determinasi (KD) yang diperoleh adalah 23% yang dapat ditafsirkan bahwa variabel bebas yaitu restitusi berkontribusi sebesar 23% terhadap variabel Y yaitu penerimaan pajak dan 77% lainnya dipengaruhi oleh faktor-faktor lain diluar variabel restitusi pajak (X). nilai korelasi adalah 0,480, dengan significant sebesar 0,336 yang berarti model regresi linier bersifat lemah dan variabel restitusi tidak mempengaruhi variabel penerimaan pajak. Proses pemeriksaan restitusi di Kantor Pelayanan Pajak Manokwari berlangsung sesuai dengan Peraturan Menteri Keuangan RI Nomor 184/PMK.03/2015 tentang Tata Cara Pemeriksaan.

Artykuł dotyczy koncepcji Paula Kirchhofa uproszczenia prawa podatkowego. Została ona przedstawiona w projekcie "Bundessteuergesetzbuch: Ein Reformentwurf zur Erneuerung des Steuerrechts" (Federalny kodeks podatkowy: projekt reformy dla odnowienia prawa podatkowego [2011]). Projekt uproszczenia prawa podatkowego Kirchhofa jest próbą odpowiedzi na dobrze rozpoznane słabości współczesnych systemów podatkowych i powtarzające się wezwania do ich reformy. Choć kodeks został stworzony z myślą o Niemczech, nieukrywane ambicje heidelberskiego profesora są większe. Zgodnie z nimi jego koncepcja uproszczenia prawa podatkowego może być zastosowana w innych państwach, a częściowo także w regulacjach podatkowych w prawie Unii Europejskiej. Celem artykułu jest zapoznanie czytelnika z motywacjami Kirchhofa, przyjętymi przez niego założeniami, a także podstawowymi regulacjami projektu. W miejsce ponad 30 podatków występujących w prawie niemieckim projekt pozostawia jedynie cztery: podatek dochodowy, podatek od spadków i darowizn, podatek obrotowy oraz podatek akcyzowy. Znacznie ograniczona została liczba wyjątków, zwolnień i regulacji szczególnych. W efekcie zamiast ponad 50 000 paragrafów obowiązującego prawa podatkowego proponowana regulacja zawiera tylko 237 paragrafów. Jest to pierwsze omówienie koncepcji Kirchhofa w polskiej doktrynie prawa. Zdaniem autora artykułu przedstawiony przez Kirchhofa kodeks zasługuje na pozytywną ocenę, może być wzorem dla nadaktywnego ustawodawcy oraz inspiracją dla reform systemów podatkowych we współczesnym świecie. Autor artykułu dostrzega jednak problem uzyskania przez tego rodzaju projekt trwałej akceptacji doktryny prawa, partii politycznych i opinii publicznej. ***The paper deals with Paul Kirchhof’s concept of simplification of tax law, presented in the book "Bundessteuergesetzbuch: Ein Reformentwurf zur Erneuerung des Steuerrechts" (Federal tax code: proposal of a reform to renewing tax law, 2011). It was drafted as an attempt to find a solution to the generally recognised but prevailing weaknesses of contemporary tax systems, as well as repeated voices demanding their substantial reforms. Although the Federal tax code was intended for German use, Paul Kirchhof ’s proposal was more ambitious. His concept of simplification of tax law could also be implemented in other countries, and, at least partly, in tax regulations of the European Union law. The aim of this paper is to present Paul Kirchhof ’s main assumptions and premises, as well as basic regulations of the proposed new tax. In place of thirty different taxes existing under present German tax law Kirchhof proposed only four: income tax, gift and inheritance tax, turnover tax and excise tax. Additionally he significantly reduced the number of exemptions, exceptions and specific regulations. As a result, out of the previous more than 50,000 articles of the existing tax regulations, the proposed tax code contains only 237. This paper is the first one in Polish legal doctrine literature that addresses Kirchhof ’s concept, and contains its positive evaluation. It is stressed that it may well serve as a model for over-active legislator and become an inspiration for reforms of tax systems in the modern world. Its implementation, however, might be difficult, because it requires first the lasting acceptance by legal doctrine, political parties, as well as the public opinion. 50

Regional industrial restructuring has been one of the major items in the transformation of economic development mode. An exploration was made into the influence of tax arrangement on the regional industrial structure by setting up a panel data econometric model based on the evaluation and analysis of the regional industrial structure in China. It was shown that tax arrangement influenced the regional industrial restructuring in terms of three aspects. Microlevel: the turnover tax and income tax appeared with a U-path of influence on upgrading of the industrial structure while appearing with an inverted U-path of influence on rationalization of the industrial structure. In addition, the levy of resource tax had a negative impact on both upgrading and rationalization of the industrial structure. Mesolevel: taxation in the secondary and tertiary industries appeared with a U-path of influence on upgrading of the industrial structure. An increase of taxation in the secondary industry had a negative impact on rationalization of the industrial structure. The taxation in the tertiary industry appeared with an inverted U-path of influence on rationalization of the industrial structure. Macrolevel: the macrotax burden had a U-path of influence on both upgrading and rationalization of the industrial structure.

According to National Treasury’s Explanatory Memorandum on the Revenue Laws Amendment Bill, 2008, small businesses in South Africa are instrumental in the growth of the South African economy as they are a source of job creation and a counter to poverty. Research, however, indicates that small businesses face many obstacles, such as relatively high tax compliance costs. It was, therefore, proposed in the 2008 Budget Review that a turnover tax system be implemented for micro businesses with a turnover of up to R1 million per annum to simplify the tax compliance process. Similarly, section 12E was introduced earlier in the Income Tax Act No. 58 of 1962 to offer additional income tax relief to small business owners. Sections 12E(4)(a)(iii) and (d) and paragraph 3(b) of the Sixth Schedule, however, prevent certain small business owners from making use of these concessions. This article investigates these barriers to entry and explores possible solutions to the problems presented by them.

Global financial turmoil in recent years has resulted in renewed interest in Stock Transaction Taxes (STT). Given that the existing literature on the quantitative impact of STT on turnover is limited and/or outdated, this article reinvestigates the issue, taking up the Japanese market reforms during the 1990s as an example. The analysis using an ordinary, fixed parameter model and Bayesian, variable parameter model finds that STT and, more generally, increased transaction cost significantly reduced trading volume. It is also found that the elasticity of turnover somewhat increased as the reforms were implemented. Finally, it is found that even in 2003 the elasticity was considerably smaller in the Japanese market than in European markets many years before.

Japan eliminated turnover tax on stock trading through the end of the 1990’s to revitalize its ailing stock market by reducing the overall transaction cost for stock trading. This paper empirically examines the effect of this exogenous, institutional change in tax policy on stock trading volume in the Japanese market. To do so, we use panel data of stocks traded in both the Japanese and United States markets and compare changes in their trading volumes at the times of the tax changes. We use a well-established V-shape relationship between turnover and price change, with three different assumptions as regards how the price change relates to turnover across stocks and markets . Although a model allowing for both slope and intercept shifts does not offer any indications one way or the other, a more restricted model allowing only for an intercept shift clearly suggests a statistically significant increase in trading volume in the Japanese market but not in the United States markets for April 1999. However, such a result was not obtained for April 1996. These results indicate that the abolition of turnover tax in 1999, but not the rate reduction in 1996, contributed to the trading volume increase.

Windfall revenues from foreign aid or natural resource exports can weaken governments’ incentives to design or maintain efficient tax systems. Cross-country data for developing countries provide evidence for this hypothesis, using a World Bank indicator on “efficiency of revenue mobilization.” Aid’s negative effects on quality of tax systems are robust to correcting for potential reverse causality, to changes in the sample, and to alternative estimation methods. Revenues from natural resources are also associated with lower-quality tax systems, but results are somewhat sensitive to the choice of resource dependence indicators, and to a few extreme values in the data. Disaggregating by resource type, revenues from fuel exports are found to be more strongly associated than revenues from metals and ores exports with inefficient tax systems.

Based on the yearly turnover tax statistics, the German turnover tax statis-tics panel allows for the first time detailed longitudinal analyses of nearly alleconomic sectors. In addition to turnover tax related variables, the dataset pro-vides information about exports, imports and, due to the combination with theGerman business register (Unternehmensregister), information about employ-ees liable to pay social insurance. The panel contains more than 4.3 millionenterprises and 1.9 million of these are covered over the whole time periodfrom 2001 to 2005. There is no other German statistics that covers nearly alleconomic sectors with such completeness.In the following we give an overview of the turnover tax statistics and thematching process (sections 2 and 3). Section 4 describes the variables includedin the dataset and in section 5 examples of the research potential are presented.The paper closes with information about the way of data access

A number of states and countries have promoted the development of a casino industry primarily to attract tourists. The policies operated have generally used regulatory or taxation instruments. Such policies may or may not lead to an efficient level of investment and production for the sector. This paper considers four alternative forms of regulatory and taxation policies and examines the interactions between these two sets of investments. The authors find that a turnover tax yields an efficient outcome with a competitive industry and also in the case of a cartel association; but it will be distortionary if a multiplant private monopoly controls the sector. Furthermore, a pure public sector-owned multiplant monopolist is efficient, while a tax on the fixed costs is inefficient if a casino association regulates the sector.

In this article, we investigate the information efficiency of the Berlin stock exchange using returns of a new daily stock-market index for the years 1892–1913. We focus on the impact of the 1896 stock exchange law and of the increases of the stock-market turnover tax in 1894 and 1900 on information efficiency. We fit an ARMA(0,1)-GARCH(1,1) model to the data and search for structural breaks. This approach yields no convincing evidence that the tax increases had a negative influence on weak information efficiency. In addition, the restriction of derivative trading by the 1896 stock exchange law did not result in measurable changes in the autocorrelation of daily returns.

Introduction In 2013, the VAT in China yielded approximately the equivalent of USD 500 billion for the government, making it very likely the largest VAT in the world in terms of the dollar value of revenue generated. It is, however, not normally regarded as a paragon of VAT design and is perceived not only by international experts but also by Chinese tax policymakers and commentators themselves to be inferior to the VAT regimes adopted in advanced economies. The Chinese government has continuously attempted to “improve” its VAT in the last two decades, sometimes in part (but only in part) to make it conform more to common international practice. In this chapter, we present select aspects of the Chinese VAT, giving special emphasis to those features of it that contradict the normal recommendations for VAT design. We do this for three interrelated reasons. The first is that many developing and middle-income countries and many transitional economies heavily rely on the VAT for revenue generation. Many of them have “imperfect” VAT systems relative to policies recommended by standard public finance theory and practices adopted in developed countries. However, from a comparative perspective, these systems (especially those found in large countries like China, India, and Brazil) are important in an obvious sense: they shape the understandings of large populations of taxpayers, tax professionals, and tax administrators about what the VAT is. For example, as discussed in this chapter, Chinese VAT taxpayers and tax administrators are accustomed to the fact that no refund for excess input credit will ever be given for domestic supplies. (The difficulty of issuing VAT refunds will resonate as a critical issue for those dealing with VATs in many, if not most, developing countries.) They also seem content with the absence of the concept of economic or business activity, supposedly central to the VAT laws of other countries. Relative to conventional portrayals of the VAT, these and other features of the Chinese VAT look quite unusual. However, it is useful for our comparative study to reflect some of this diversity of VAT law and design. Moreover, we may conclude, after careful analysis, that some of the supposedly “inferior” features of an impure VAT do not make enough of a difference in practice.

Under the Texas margin tax, firms are taxed on their gross receipts, without a full deduction for business expenses. The margin tax is similar to a turnover tax, which tax economists have long condemned as inefficient because it imposes uneven tax burdens on labor used at different stages of the production chain and creates artificial incentives for firms to merge with each other. Although the margin tax diverges from a simple turnover tax in several respects, the modifications generally do not make the tax more efficient. Indeed, some of the modifications may actually magnify the inefficiencies.

THE SYSTEM OF DIRECT TAXES OF INTERWAR POLAND IN THE FIRST YEARS OF THE PEOPLE’S REPUBLIC OF POLAND Summary The process of building the system of direct taxes of the People’s Republic of Poland was initiated in 1946. The tax legislation from before September 1939 which had been used until then was abolished. The urgency and scale of expenses which the Polish Committee of the National Liberation had to finance resulted in a decision in 1944 to temporarily use the prewar tax system despite the fundamental change of the political system of the state. Already in 1944 the prewar system of direct taxes was simplified by abolishing some taxes of smaller fiscal significance. The prewar acts of law on the turnover tax and income tax, after changes which deepened their fiscal nature, lost their binding force as of 1st January 1946. Moreover, the decree of 18th August 1945 on the employment tax replaced on 1st September 1945 the so far binding regulations of section II “Taxation of income from service emoluments, pensions and remunerations from hired work” of the act of 16th July 1920 on the national income tax. The system of national direct taxes supplemented the decree of 13th April 1945 on the emergency tax on war enrichment.

The relationship between firm size and the actual tax burden is the foundation of making economic policy. This paper adopts descriptive statistics and multiple regression analysis and other methods to evaluate and study the tax pressure of different scale manufacturing firms by two angles that are effective tax rates (income tax rate and turnover tax rate), taking the manufacturing firms in Quzhou Zhejiang, as a research object. There are two conclusions. One is that there is negative correlation between firm size and the corresponding tax burden. The other is that small and micro firms have the heaviest actual tax burden.

The international aviation and maritime sectors today enjoy relatively favorable tax treatment, as their fuels are not taxed and the sectors are not subject to any value-added tax or turnover tax. Nor are these fuel uses subject to any global measures to reduce their associated CO2 emissions, even though they represent at least 5 percent of the global greenhouse gas emissions. A carbon charge on fuels for international aviation and shipping equal to $25 per tonne of emitted CO2 could raise about $12 billion from aviation and about $26 billion from shipping by 2020. Market-based instruments ought to be used to raise such revenue, preferably charges based on the carbon contents of fuels. Such charges would also scale back emissions by at least 5-10 percent. Developing countries ought to be able to keep their own tax revenue, and additional compensation to them for the economic burdens of these carbon charges may be warranted. Such compensation would constitute at most 40 percent of the raised global revenue. Implementing these charges can be a challenge, especially for aviation, where a large number of bilateral air-service agreements would need to be rewritten.

The absence of universally acknowledged indicators for assessing the current housing situation and the performance of the shelter sector is a generally recognized problem. It is often considered partly responsible for the weak bargaining position of the sector amid the competition for scarce resources. The battle for these resources and strengthening of the 'competitive standing' of housing policy are associated particularly with the developing countries. There, housing problems are in quite another class compared with developed European nations. There has been a general rise in housing standards in Western Europe, and several countries have achieved an extremely high level of quality, even by world standards. However, this does not mean that the task of measuring the performance of the housing sector has lost its significance. There are at least two reasons for this. First, Europe is going through a process of rapid integration. That process increases the need for comparable data on, for instance, housing policy and its effects in different countries. Proof of this growing need is the publication of Statistics on Housing in the European Community, which was compiled by the Netherlands for the meeting of EC housing ministers. Secondly, rapid change in the housing-policy environment also increases the need for intensified monitoring of the housing sector. At the moment, for reasons of fiscal austerity, several European countries are having to reduce the burden on society caused by housing subsidies and to target those subsidies more effectively. At the same time, though, the housing expenditure of households in many countries is rising because of higher tax burdens. These largely take the form of energy tax and turnover tax on housing construction. Tax relief on housing is also being cut by restricting the right to deduct interest paid on housing loans from taxable income. In view of the fact that cuts in and reallocation of social subsidies coincide with rising housing expenditure, the need to establish how these changes are affecting the housing sector has become acute.

Pridėtinės vertės mokestį yra įsivedusios apie 150 pasaulio valstybių, jis sudaro reikšmingą valstybių biudžeto pajamų dalį (statistiškai apie penktadalį). Pagrindinėmis priežastimis, nulėmusiomis beprecedentį PVM populiarumą ir sparčią mokesčio integraciją į daugumos pasaulio valstybių mokestines sistemas, laikomi reikšmingi alternatyvių netiesioginių apyvartos mokesčių sisteminiai trūkumai, kurių PVM neturi. Pridėtinės vertės mokesčio unikalumas ir pranašumas prieš kitus apyvartos mokesčius slypi pirkimo PVM atskaitos mechanizme, sudarančiame sąlygas apmokestinti tik kiekvienoje iš prekių ir paslaugų paskirstymo grandžių sukurtą pridėtinę vertę. Todėl, siekiant, kad PVM funkcionuotų efektyviai ir sugebėtų išlikti neutraliu apyvartos mokesčiu, yra labai svarbu, kad pirkimo PVM atskaita apmokestinamiesiems asmenims būtų arba visai neribojama, arba ribojama tik išimtiniais atvejais ir tik proporcingai tokiu ribojimu siekiamiems tikslams. Dėl šios priežasties magistro baigiamajame darbe nagrinėjama problema, ar pagrįstai Lietuvos PVM įstatymo nuostatos, suteikiančios teisę į PVM atskaitą tik PVM mokėtojams, riboja apmokestinamųjų asmenų teisę į pirkimo PVM, patirto ir sunaudoto apmokestinamoje veikloje iki registracijos PVM mokėtoju, atskaitą. Kaip pradinė išeities pozicija iškeliama hipotezė, kad galbūt Lietuvos Respublikos PVM įstatymo nuostatos, ribojančios apmokestinamojo asmens teisę į iki įsiregistravimo PVM mokėtoju patirtą pirkimo PVM, netinkamai įgyvendina 2006/112/EB... [toliau žr. visą tekstą] Approximately 150 countries of the world have already introduced the value added tax in their tax systems. Value added tax compose a significant portion of the income of the revenue of these states’ (statistically one fifth). As the main reasons which determined the unprecedented popularity of VAT and its rapid integration into the tax systems of the most countries of the world are recognized the meaningful disadvantages of the alternative turnover tax systems, which are not typical to the systems of VAT. The uniqueness of value added tax and its advantage over the other turnover taxes lies in the mechanism of input VAT deduction. Certain mechanism allows to charge only the value added created in the stages of distribution (no cascade effect emerges). Therefore in order for VAT to operate effectively and to remain neutral, it is particularly important that taxable persons’ right to input VAT deduction is either not restricted at all, or if restricted then only in exceptional cases and only in the strict proportionality with the objectives in purpose. For the above reasons we examine the problem whether the provisions of the Lithuanian Law on VAT which entitle solely the VAT payers with the right to VAT deduction legitimately restrict the taxable persons’ right to deduct input VAT incurred and absorbed in the taxable activity prior the registration as VAT payer. As the initial starting position we hypothesize that conceivably the provisions of the Lithuanian Law on VAT... [to full text]

In this paper, a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos. The situation being considered is in a country where casinos cater exclusively to foreign tourists. The goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation. When the price of gambling is set by regulation above its competitive level, the economic losses created by excessive investment in the sector can be reduced by taxation. A turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country. Due administrative constraints, a number of countries rely on the taxation of the casinos’ fixed assets or a combination of a turnover tax and a tax on fixed costs. The model is applied to the situation in North Cyprus. The annual economic efficiency loss from its poorly designed tax policies on casino gambling is estimated to be about 0.5 percent of GDP.

FORMS OF CONSUMPTION-BASED TAXES INTRODUCTION In this section of the chapter, there is a discussion of a direct tax on individuals that is measured by their level of consumption rather than their income. This tax is commonly referred to as a cash-flow or consumption-based income tax. Most taxes on consumption are indirect taxes. These taxes, also discussed in this chapter, are collected by sellers of taxable goods and services and are expected to be borne by final consumers of those goods and services. The indirect tax on consumption may take the form of a single-stage tax like the retail sales tax or a multistage tax like a value added tax. A value added tax is a generic name associated with a multistage tax that is levied on the value added by each business firm at every stage of production and distribution of goods and services. In part, the description of a VAT depends on the method used in calculating tax liability. In this chapter, there is a discussion of the addition, sales-subtraction, and credit-subtraction methods of calculating VAT liability. The legislature may alter a VAT base by removing some sellers or some goods and services. This alteration of tax base is accomplished by providing an exemption for designated businesses (such as small businesses) or entities, such as units of government or nonprofit organizations. The legislature also can alter the tax base by granting exemption or altering the rate for particular goods and services, regardless of the nature of the seller.

The VAT is compared to a turnover tax (TT) given monopoly final goods and intermediate goods firms interacting strategically. Linear demands and constant costs are assumed. Via examples it is shown that for both "Cournot" and "Stackelberg" games, a revenue neutral VAT may not exist to a given turnover tax; and the TT can dominate the VAT simultaneously in welfare, revenue and output terms; In other examples it is shown that the VAT dominating the TT by all three indicators is also possible. It is also shown that outcomes are identical to the "Cournot" game when the consumer goods firm is the strategic leader. When the intermediate goods firm is the leader, intermediate price distortion is lower and welfare higher than in the "Cournot" game under both taxes; and the output neutral VAT rate to any feasible TT rate is higher than in the "Cournot" game.

The cases of the seven industrial democracies discussed in Chapters 2 and 3 demonstrate that the development of a tax state and a welfare state is path-dependent upon the development of the state's funding capacity. The focus is on a revenue reliance shift from income to consumption before the government's experience of chronic budget deficits. In newly developing countries, however, the pattern of path dependence of the tax revenue structure is different from the one in the industrial democracies, because it has been common knowledge which tax is effective to raise revenue and how to administer it. A comparison between Japan and newly industrializing Taiwan and South Korea in this chapter will explicate how a different pattern of path dependence explains the different development of the funding capacity of the welfare state. The Diffusion of the Value Added Tax into Newly Developing Economies Mobilizing financial resources and raising tax revenue are important tasks for newly democratizing and industrializing countries. The failure to finance the public sector results in deficit finance and excessive money printing. Both are undesirable for developing economies, which often suffer from balance-of-payment problems and exposure to more competitive and industrialized economies. Whereas industrialization provides potential resources for the government to extract tax money, democratization makes social groups and private organizations express their demands and ties the hands of the government with respect to the democratic policy-making process (Bates and Lien 1985).

After decades of high trade restrictions, fiscal distortions, and currency overvaluation, Cameroon implemented important commercial and fiscal policy reforms in 1994. Almost simultaneously, a major devaluation cut the international price of Cameroon's currency in half. This article examines the effects of those reforms on the incentive structure faced by manufacturing firms. Did the reforms create a coherent new set of signals? Did they reduce dispersion in tax burdens? Was the net effect to stimulate the production of tradable goods? The results of applying a cost function decomposition to detailed firm-level panel data suggest that the reforms created clear new signals for manufacturers, as effective protection rates fell by 80 to 120 percentage points. In contrast, neither the tax reforms nor the devaluation had a major systematic effect on profit margins. The devaluation did shift relative prices dramatically in favor of exportable goods, causing exporters to grow relatively rapidly.

Most Central and Eastern European countries have recently replaced the traditional turnover tax system, with its multiplicity of rates, with a value added tax (VAT). Since the VAT is a major source of tax revenue, it is important to have a reasonably accurate means of estimating the base and potential revenue. When exports are exempted and a credit for capital investment is allowed, the VAT is essentially a retail sales tax and can be estimated from sales. However, once a number of exemptions is added, estimation becomes more complex. Taxes are not paid on exempt goods, but neither is a credit received for purchases of exempt goods. Exempt goods must be taken out of the taxable base, but when an exempt good is purchased to produce a taxable good, it must be added back in.

The transition from socialism characteristically reduces existing tax revenues at the same time that it increases the need for government spending. An increasing need for revenue combined with an eroding tax base creates a transition-related fiscal gap and a challenge for tax policy. The solution, say the authors, is not to lay a heavier tax burden on new private firms. The issue is how to meet revenue needs without inhibiting private sector development. Large-scale tax evasion in the private sector - the de facto outcome in Bulgaria and in many other transitional economies - may be a good incentive for development of private enterprise, but it is illegal and inequitable to wage-earners and salaried workers. The chief means of increasing tax revenue are to: (1) reduce tax rates to decrease the benefit of evasion; (2) improve tax administration (to increase tax coverage and better dectect evasion); and (3) increase penalties for evasion. These three measures effectively decrease the benefits and increase the cost of tax evasion to economic agents. It takes time to improve tax administration, however. Given administrative limitations, what should the tax structure be? The authors contend that an administratively feasible system designed to encourage development of the private sector during the transition should: (i) be simple, not complex or oversophisticated; (ii) be administratively implementable with current resources; (iii) impose a low tax burden on all economic agents; (iv) rely on broad tax bases with minimum exemptions; (v) begin the long-term improvement of tax administration; and (vi) limit the severity of tax penalties in the transition from an authoritarian to a democratic regime. In theory, reducing the cost of compliance and increasing the expected cost of noncompliance should reduce tax evasion and increase tax revenue. In practice, small businesses and self-employed citizens tend to evade taxes, providing an effective zero tax base. The government has little to lose from reducing taxes on the self-employed but, to be equitable, it should reduce taxes for everyone. As a general rule, say the authors, economies in transition should impose lower tax burdens than are imposed in mature western market economies. It may also reduce the perception of"exploitation"by giving the impression of a more modest government consistent with the dynamic private sector led economy.

The way in which taxation influences economic growth is a matter which has preoccupied economists ever since taxes were first levied. It is not only the economy which feels the impact of taxes; political developments are also affected. There are numerous examples of political developments with a fiscal background. Many a king was deposed as a result of a tax rise. In the Netherlands a 10 per cent turnover tax — modest by our modern standards — was one of the reasons, 400 years ago, for a conflict to erupt which lasted for 80 years. Thankfully, our present tax troubles are less long-drawn-out, and ′furthermore we no longer drag the crown into our conflicts with the tax authorities. The fact that in our modern times uncrowned heads, meaning politicians, get caught in the line of fire when feelings run high about taxation is evidenced by the situation in the United Kingdom. What drastic interventions in industrial relationships and conflicts within and outside the British Government were unable to achieve, that is to undermine the almost iron position of the former Prime Minister, was brought about by the commotion around the poll tax. Finding the best possible tax system, namely one that is generally accepted and at the same time causes the least possible disturbance of the economic process, seems to be more difficult than a number of academic studies on this subject would have us believe.

In the Federal Republic of Germany (FRG), the harmonization of taxation has been continuously discussed since the signing of the EEC Treaty (1957). At first, the harmonization of the system of turnover taxes was of primary interest, because until 1967 the FRG levied a turnover tax in the form of an all-stage gross turnover tax (the tax base was total turnover of taxable activities valued at gross sales prices). This system of turnover taxes generated negative effects of tax cumulation, which led to distortions in competition and to vertical concentration. It also prevented exact tax border adjustments. The tax-deductions for exports and the taxation for imports were done on the basis of flat rates. Consequently, the FRG was continuously accused of setting this flat rate higher than the average domestic tax rate and thus of attaining protectionist effects by appropriate border tax adjustments.

General principles can guide the design of the overall contours of a tax reform package to a considerable extent. This paper reports on the use of three tax policy models to analyze issues in the course of undertaking economic work with the regional departments in the World Bank's Operational Complex. The first model, that for Bangladesh, is used to demonstrate how the relative attractiveness of different revenue-raising options depends sensitively on the workings of labor markets and substitution relationships in production. The second model, that for China, emphasizes the importance of taking a system-wide view of taxation in a decentralizing socialist economy, where the coexistence of administered and free market prices for the same commodities can make standard tax reform prescriptions most inappropriate. The third model, that for India, examines the kinds of domestic tax adjustment that would be necessary in the wake of reductions in import tariffs in order to allow the government to continue to meet its real expenditures wihout any change in foreign borrowing, but taking into account changes in the prices of intermediates and capital goods resulting from tariff reform. The paper also discusses the costs involved in constructing and implementing tax policy models and summarizes the principal finding of the paper.

The comprehensive value added tax (VAT), now a principal source of revenue for some forty countries, was nowhere to be found only thirty years ago. This article analyzes the reasons for this dramatic change and weighs the advantages and disadvantages of the VAT for developing countries. It points out the choices a government instituting a VAT must make with respoect to taxing all final products or only consumer goods, and it offers suggestions on how to treat exports and imports, how to compute the VAT payable, whether to use "exemption" or "zero-rating" approaches, and whether to have one or various tax rates. For countries with a fragmented retail trade the VAT may apply only to wholesale and earlier stages. The article draws no general conclusions on the suitability of the VAT for developing coutnries, because these countries differ so widely. Copyright 1988 by Oxford University Press.