scholarly journals Effect of volatility of foreign direct investment inflows on corporate income tax revenue volatility

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Income Tax ◽  
Corporate Income Tax ◽  
Tax Revenue ◽  
Fdi Inflows ◽  
Content Type ◽  
Cross Border ◽  
Tax Haven ◽  
Revenue Volatility ◽  
Positive Effect ◽  
Income Tax Revenue

Purpose This paper aims to examine how the volatility of foreign direct investment (FDI) inflows affects the volatility of corporate income tax revenue. Design/methodology/approach The study has used an unbalanced panel data set of 129 countries over the period 1981–2016 and the two-step system generalized methods of moment approach to perform the empirical analysis. Findings The main findings are that FDI volatility enhances the volatility of corporate income tax revenue in less advanced economies, but reduces it in relatively advanced countries. The positive corporate income tax revenue volatility effect of FDI inflows is far higher in non-tax haven countries than in tax haven countries. Additionally, FDI volatility exerts a higher positive effect on corporate income tax revenue volatility as countries experience greater dependence on natural resources. Finally, the positive effect of FDI volatility on corporate income tax revenue volatility is further amplified by higher FDI volatility. Research limitations/implications One important limitation of the present analysis is the use of aggregate FDI inflows because of the lack of data over a long period on greenfield FDI inflows and cross-border mergers and acquisitions FDI inflows. Therefore, an avenue for future research could be to explore separately the effect of the volatility greenfield FDI inflows and the volatility of cross-border mergers and acquisitions FDI inflows on the volatility of corporate income tax revenue, when long-time series data (covering many countries) would be available. Practical implications These outcomes particularly shed light on the role of FDI volatility on the volatility of corporate income tax revenue, particularly in countries that are highly dependent on natural resources. Foreign capital flows, notably FDI flows, play an essential role for countries’ economic development through, inter alia, technology transfer, jobs creation and economic growth. Policymakers should aim to attract FDI, while also reducing their volatility, by designing and implementing policies and measures (such as those in favor of business environment improvement, property rights enforcement and political stability) that would assure foreign investors of the continuous high returns of their investments. Originality/value To the best of the author’s knowledge, this is the first time this topic is being addressed empirically in the literature.

scholarly journals International tax competition and foreign direct investment in the Asia–Pacific region: a panel data analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chengwei Xu ◽  
Alfred M. Wu
Keyword(s):  
Tax Competition ◽  
Income Tax ◽  
Asia Pacific ◽  
Corporate Income Tax ◽  
Pacific Region ◽  
Asia Pacific Region ◽  
Public Governance ◽  
Fdi Inflows ◽  
Content Type ◽  
International Tax Competition

PurposeThe purpose of this study is to investigate how a country's competitive tax policy influences its inward foreign direct investments (FDI) in the Asia–Pacific region, even when given particular constraints (e.g., population, public governance, skilled labor, and so on) exist.Design/methodology/approachThe paper uses the system GMM estimation approach to test the hypothesis. Data on FDI, corporate income tax, and various confounding factors were drawn from Ernst and Young's worldwide corporate tax guide, the World Bank, and other sources to create a panel of 28 economies over the period 2000–2016.FindingsThe present research confirms the negative association between corporate income tax (CIT) and FDI inflows. The effects of other confounding factors on FDI net inflows are also supported (e.g., connectivity, GDP per capita, population, skilled labor, and trade openness). Our results support the argument that foreign investments may be more sensitive to CIT. Therefore, CIT is an effective indicator to observe international tax competition.Originality/valueThe present research uses rich data on statutory CIT and other economic and public governance factors to investigate the relationship between tax competition and FDI inflows in the Asia–Pacific region. The findings add important supplements to the nuanced understanding of the political-economic dynamics in this region, especially when cut-throat tax competition, trade tensions, and stagnant economic growth have been key challenges for global economies.

scholarly journals Inclusion of the Corporate Income Tax Revenue into the Municipal Budget: Needs, Risks, and Solutions

2013 ◽  
Vol 29 (1) ◽  
pp. 56-66 ◽  
Author(s):  
Biruta Pūle
Keyword(s):  
Local Governments ◽  
Income Tax ◽  
Tax Incentives ◽  
Business Development ◽  
Corporate Income Tax ◽  
Tax Revenue ◽  
Personal Income Tax ◽  
Income Tax Revenue ◽  
New Jobs ◽  
Budget Revenue

Abstract The author assesses the opportunities for inclusion of the corporate income tax into the budgets of the local governments on whose territories there are legally registered companies. For this purpose the same territorial code principle is recommended, which is applied to administer personal income tax. In order to motivate companies to register legally and engage in business activities in the regions of Latvia, tax incentives should be established. The application of tax incentives need to be delegated to the local governments, thus ensuring their interest in business development in their territories. The diversion of corporate income tax into the budgets of local governments would significantly strengthen their budget revenue base, increasing the interest of municipalities into the development and modernization of the companies, as well as creation of new jobs. Inherent risks are defined, and possible solutions how to eliminate these risks are suggested.

scholarly journals FAKTOR-FAKTOR YANG MEMPENGARUHI PENERIMAAN PAJAK PENGHASILAN BADAN PADA KANTOR PELAYANAN PAJAK DI KOTA BANJARMASIN

2018 ◽  
Vol 19 (1) ◽  
Author(s):  
Aris Setia Noor ◽  
Berta Lestari
Keyword(s):  
Data Collection ◽  
Path Analysis ◽  
Survey Research ◽  
Income Tax ◽  
Research Method ◽  
Corporate Income Tax ◽  
Tax Revenue ◽  
Literature Study ◽  
The Right ◽  
Income Tax Revenue

The purpose of this study are: (1) To find out how much the influence of tax climateon the receipt of corporate income tax partially, (2) To find out how much influencethe tax climate on corporate income tax revenue together. The research methodused is survey research method. Data collection techniques used the census method.Data collection is done through direct observation to the object of research and literature study. The method of analysis used in this study is Path Analysis. Based ondata used the statistic analistic shows that: (1) Simultaneously to fulfill and conveyclearly and accurately the tax form, to account correctly the debt tax, to pay the debttax at the right time give positive and significant to 5% real standard toward the acceptance of income tax body. (2) Partially to fulfill and convey clearly and accuratelythe tax form, to account correctly the debt tax, to pay the debt tax at the right timegive positive and insignificant to 5 % real standard toward the acceptance of incometax body.The result of this research shows that other unaccounted variable has verysmall affect in the amount of 0.32% toward acceptance of income tax body.

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