Trust and Tax Compliance Among Malaysian Working Youth

A high level of tax morale is necessary in promoting tax compliance among the public, including youth who tend to have a low sense of responsibility. The current tax system and working youth segment of Malaysia are first explained. Based on the relevant literature on taxation, important factors that influence trust and the resulting tax compliance are conceptualized in a research model. An online survey was administered on youth throughout Malaysia that resulted in 2,030 usable responses, of which 500 were used in testing the model. The empirical results from using partial least squares analysis show that one of the two trust variables and tax knowledge are significant determinants of tax compliance. In addition, youth in the registered taxpayers group exhibited a greater level of compliance intention than non-registered youth.     

The Determinants of Medium Taxpayers’ Compliance Perspectives: Empirical Evidence from Siem Reap Province,Cambodia

Studies of tax compliance have focused primarily on individual taxpayers rather than representative enterprises. However, this paper examines several determinants of tax compliance perspectives among medium taxpayers. Using an ordered logit model, the associations of psychological and institutional factors with medium taxpayers’ compliance perspectives are analysed. The results indicate that tax law enforcement, penalties, tax awareness, trust in tax authority, and accounting agency are the main determinants increasing medium taxpayers’ high-compliance perspectives and reducing their medium-compliance perspectives. Tax law enforcement and accounting agency also remedy their low-compliance perspectives. These findings provide guidance for policymakers in enhancing tax compliance.     

Benchmarking Tax Compliance Efficiency Among South African Retail Firms Using Stochastic Frontier Approach

Random selection of taxpayers for audit mostly nets tax compliant taxpayers. There is hence a need to adopt other methods that are efficient and and effective in performing their specific and general deterrence roles. This article uses profit efficiency benchmarking to analyze selected retail firms tax compliance risk in South Africa over the 2005–2006 period. It seeks to identify firms that should be audited because of their suspected tax compliance risk, using a stochastic frontier analysis. The profit efficiency estimates of 24 retail stores are used to rank them in terms of their performance. They are also tracked over time. Approximately, 50 percent of the firms performed better than the average profit efficiency of 0.39. The top 10 firms are significantly performing better. However, the bottom 50 percent of the retail firms performed poorly and could be targeted for tax audit.     

Tax Compliance as a System: Mapping the Field

Tax evasion is a serious and growing problem all over the world. In most cases, non-compliant tax behavior is associated with tax evasion. Such approach, however, is incomplete. There is a lack of clear definitions of compliance and non-compliance. This article focuses on defining the key terms related to tax compliance and on mapping and systematizing the determinants of tax compliance and proposes a way to develop an administrative strategy for tax compliance. The novelty of the study lies in approaching tax compliance as a systemic whole. A systemic approach to tax compliance as a comprehensive whole could serve as the basis for the tax authority in developing administrative strategies.     

What Factors Influence the Intentions of Individuals to Engage in Tax Evasion? Evidence from Ghana

ABSTRACT

This study examines the views of students on the ethics of tax evasion, their intentions to evade tax, and investigates the factors that predict such intentions. Relying on the extended version of the Theory of Planned Behaviour, the study investigated whether attitudes, subjective norms, perceived behavioural control, and moral obligation may be good predictors of the intention to evade tax. Data were gathered from 662 students of University of Ghana Business School using questionnaires. The hypotheses were tested using the structural equation modelling technique. Results indicate that the intention to evade tax among the students is low and most respondents generally perceive tax evasion as an unethical practice. The results also demonstrate that attitude, subjective norms and moral obligations have important implications on the intention to evade tax. The evidence we provide should be useful to governments and tax agencies interested in promoting responsible tax compliance behaviour among individual taxpayers.     

Understanding the Accumulation of Local Government Savings: A Dynamic Analysis

Government savings can be a conundrum that perplexes taxpayers. Excessive savings indicate that taxpayers either pay unnecessarily high taxes, or they do not receive adequate returns on services. Insufficient savings leave government officials little financial flexibility. The Great Recession and its aftermath have renewed interest in understanding government savings. This article uses dynamic panel modeling to analyze the determinants of municipal discretionary savings. Results show that risk factors are the primary drivers of municipal savings, and high-risk factors have greater impact on the amount of savings. This finding confirms organization theory’s view of savings as a crucial buffer against risk.     

加强两岸税收合作促进两岸融合发展——基于《两岸税收协议》文本的分析

近年来,海峡两岸经济交往密切,人员来往频繁。为防范和消除重复征税,促进两岸经济合作,2015年8月25日《两岸税收协议》正式签署。本文通过对照OECD协定范本、UN协定范本及大陆与其他国家(地区)签署的税收协定或税收安排,分析《两岸税收协议》文本的主要条款,揭示其中所体现的协定立场,即大陆为促进两岸融合发展而让渡了诸多税收利益。随后从理论上分析了该协议生效后预期将产生的积极影响,包括实现税收协定通常的目的,以及增加台湾当局税收收入、减轻台湾地区纳税人税负、提升台湾经济地位等。最后展望未来,期待两岸共同努力,促成《两岸税收协议》尽早生效执行。     

The growing role of computers in american federal tax compliance and administration

Computers have had a significant impact on reducing both compliance and administrative costs under the American Federal Internal Revenue Code. Computer assisted legal research systems have vastly facilitated legal research for both taxpayer and tax collecting officials. Tax evasion and under-reporting have been brought under better control with the assistance of computers. At present successful experiments are being conducted under which returns prepared by the taxpayer with the assistance of computers are being filed in electronic format so as to allow for virtual instant processing by tax collecting officials. Taxpayers have also found computers to be of considerable assistance in preparing tax returns and developing tax saving strategies.     

An economic appraisal of the Egyptian revolution

Historical research, mainly focused on early-modern Europe, has suggested a positive link between taxation and democracy. This study approaches the connection in a present-day developmental context by looking at differences between taxpayers and non-taxpaying citizens in terms of political interest, a precondition for accountability demands. Using survey data from sub-Saharan Africa, a multilevel analysis shows that taxpaying increases political interest. The causal direction of this finding is confirmed through an instrumental variable analysis. The results support the existence of the mechanisms underlying the theory of taxation working as a generator of political engagement and democracy.     

Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research

Abstract

This paper reviews the literature on taxation of the informal economy, taking stock of key debates and drawing attention to recent innovations. Conventionally, the debate on whether to tax has frequently focused on the limited revenue potential, high cost of collection, and potentially adverse impact on small firms. Recent arguments have increasingly emphasised the more indirect benefits of informal taxation in relation to economic growth, broader tax compliance, and governance. More research is needed, we argue, into the relevant costs and benefits for all, including quasi-voluntary compliance, political and administrative incentives for reform, and citizen-state bargaining over taxation.     

Tax Evasion and the Role of the State Actor(s) in Bangladesh

Little attention has been paid to tax evasion in developing countries due to a lack of data. This article addresses this lacuna by investigating the tax evasion practices and finds significant increases in tax evasion in Bangladesh. The study makes a major contribution to the literature in tax evasion, and indicates that the norms of state actor(s) (i.e. the National Board of Revenue–the sole tax authority in Bangladesh) lie in the interests of politicians and the continuation of corruption. The legitimacy of the state actors in this case means that they act as facilitators for increasing tax evasion practices. Therefore, the current system has endured remarkably robustly to date, and coercive isomorphism is indeed needed in the institutionalization process.     

Gaining Legitimacy as a Public Official: The Case of Supportive Employee Attitudes to the Standardization of Work

The standardization of work processes is a common feature of the public administration, aiming at both efficiency and equal treatment of citizens. Combining this standardization with employee motivation is considered a challenge. This challenge is explored, based on a survey to 261 social insurance officers (SIOs) at the Swedish Social Insurance Agency. Results reveal that, contrary to expectations, 73 per cent of these officials perceived the standardized protocols as supportive, rather than burdening. Justifications were codified in order to identify factors affecting these attitudes. Four categories emerged. These factors are discussed and it is concluded that the standardization of work increased professional status, by providing with legitimacy and authority. However, in order to ensure compliance and increase professional status, better opportunities for officials to influence protocols and contribute to the shared knowledge base are required.     

Incoherence between Tax and Development Policies: the case of the Netherlands

Abstract

This article discusses incoherence between tax and development policies, a relatively new area in the debate on policy coherence for development, using a case study of the Netherlands. Dutch business entities play a key role in tax avoidance structures of multinational corporations. We argue that the Dutch tax regime facilitates the avoidance of substantial amounts of tax revenues in developing countries when compared to the Dutch aid budget. As domestic tax revenues are an important source of financing for development, this suggests that the Dutch tax policy is incompatible with the Dutch policy on development co-operation. The lack of policy coherence is largely unintended but it has structural and political causes.     

Tax Innovation or Excise Duty in Disguise? Deviations and Distortions in Value-Added Tax in Bangladesh

The article examines and analyzes the nature of deviations and distortions in the VAT system in Bangladesh. The article argues that the Bangladesh VAT introduced in 1991—with a view to maximize tax revenue by broadening tax base and curbing tax evasion while simplifying the process—has deviated significantly from standard and international best practices. It further argues that most of the deviations have their roots in the excise system of taxation that VAT has replaced and, while some of them produce ad hoc benefits in terms of generating revenue and easing compliance, most of them, besides eroding the coherence of the tax system, defeat the core principle of VAT—self assessment. The article concludes that if the process of adulterating VAT with so many ingenious adaptations and deviations is allowed to continue, the objective of VAT to evolve as an efficient tool for maximizing revenue will remain elusive.     

Small-Business Participation in the Informal Sector of an Emerging Economy

We investigate the characteristics of the owners of small businesses that participate in the informal sector of an emerging economy and their perception of the risk of detection by tax authorities while doing so. Data are gathered from a survey covering 1027 small businesses in Trinidad and Tobago. Results suggest that small business owners are motivated to participate in the informal sector when they believe that the risk of detection by the tax authorities is low and that government regulations are burdensome, but there is no evidence that the tax rate itself is an issue. Their perception of the risk of detection by the tax authority is determined largely by the time they spend and the income they earn in the formal sector.     

Business priorities and the relative importance of state and local economic-development incentives

State and local governments commonly use a variety of incentives to encourage economic development and business retention. Policies which include economic development incentives are commonly criticized as being ineffective and wasteful uses of public funds. This paper addresses the issue of wastefulness through a business community's assessment of the relative value of eighteen incentives commonly used for business retention and development. Results are based on survey responses from nearly 700 businesses located in Wichita, Kansas. This study illuminates differences in value assigned to incentives by different types of business. Findings indicate that state and local governments that offer incentives without consideration of business type are in many cases delivering “windfalls” to the private sector. Even such highly touted incentives as property tax abatements are not valued equally by all types of businesses. This paper provides state and local governments with an improved understanding of business investment motivation and the relative value of different incentives to effective economic development policy.     

The effect of green taxes and carbon tax shifting on the state of Minnesota

Although it is well established that taxes have a distortionary and negative effect on the economy, not all taxes are equally deleterious. This study examines the effect of a revenue neutral tax on Carbon Emissions, using the Energy 2020 and REMI models. The revenue raised by the carbon tax is off-set by corresponding reductions in other taxes (property and payroll taxes). The results indicate that the carbon emissions tax may or may not be as negative to economic growth as the taxes that they replace were. Therefore, it is possible to tax pollution, and only minorly slow or even stimulate the economy     

Local Political Decision-Making: A Case of Rationality or Appropriateness?

The party and trustee principles are two representational styles used to describe how politicians make decisions. Swedish politicians have historically relied more on the party principle than the trustee principle. This article studies the decision-making practices of local Swedish politicians by exploring to what extent they rely on these principles when making decisions on two issues that diverge in political dignity: tax level and organisational change in the municipal administration. The study draws on new institutional theory, in which theories from rational choice and sociological institutionalism were used for modelling and performing a large study. The results indicate that, although Swedish politicians still rely on the party principle when making decisions, there is a significant difference as to what extent they do so in regard to the two policy issues. The trustee principle is more frequently used when deciding on organisational change than on tax levels. This result is valid for all Swedish parties, except for a relatively new political party at the extreme right of the ideological spectrum. Future research of the two decision-making principles in relation to other policy issues, as well as research that delves deeper into the deviant results of the different political parties, is encouraged.     

An (in)effective tax and expenditure limit (TEL): Why county governments do not utilize their maximum allotted property tax rate

Tax and expenditure limits (TELs) are restrictions placed on governments limiting their ability to collect and spend revenue. Residents support these TELs, as they desire lower tax burdens and more government efficiency; yet, residents still desire the same level of public services. Property tax rate limits, a specific type of TEL, are placed upon local governments to limit their ability to collect revenue and expand authority. Rate limits were implemented on the assumption that governments would tax at their highest maximum possible rate, but this is not always the case. This article studies why some local governments choose not to utilize their maximum allotted property tax rate. Using an open systems governance approach, a panel data analysis was conducted using data from 67 Florida counties from 2008 to 2017. Results of the analysis show that the use of special districts and the age of the residential population have significant effects on property tax rate decisions.     

‘Faulty’ fiscal illusion: examining the relationship between revenue diversification and tax burden in major US cities across the economic cycle

We investigate how revenue diversification affects tax burden in major U.S cities as it interacts with fiscal balance reported in the general fund over the economic cycle. We find that more diversified cities have higher tax burdens, and that this effect is strengthened when cities maintain a large surplus in the general fund. We also test models of revenue diversification's impact on tax burden using data from 1995 to 2010, separated into good fiscal years (1995-2001, 2004-2007, 2010) and bad fiscal years (2002-2003, 2008-2009). Model estimates show that greater revenue diversification leads to higher tax burden in bad fiscal years but this outcome is not found in good fiscal years. Cities seek greater revenue diversification when they are experiencing economic recessions. This study contains important implications for local financial management and contributes to the literature on revenue diversification and tax burden.