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Article
Publication date: 28 July 2023

Asma Senawi and Atasya Osmadi

The role of local authorities is crucial in addressing the essential needs of communities, and they possess the right to impose property taxes on all properties within their…

Abstract

Purpose

The role of local authorities is crucial in addressing the essential needs of communities, and they possess the right to impose property taxes on all properties within their territory. Property taxes are levied on all properties, contributing to approximately 60% of the local authority’s finances. However, their role in this policy is not frequently understood, primarily in executing property tax reassessment. Hence, this paper aims to reveal property tax reassessment implementation and identify its key challenges.

Design/methodology/approach

The latest tone of the list record was extracted from the local government division, Ministry of Housing and Local Government Malaysia, to answer the research objective. The data were received on November 2021 by email. Furthermore, through the literature review, the most significant challenges in property tax reassessment were identified, compared and presented.

Findings

The results highlight that property tax reassessment implementation in West Malaysia is at the level of concern where only two councils have the latest tone of the list. However, larger councils have a higher performance compared to smaller councils. The findings also reveal various challenges in property tax reassessment, such as insufficient human resources, inadequate property systems and software and lack of financial capacity. Others include a shortage of competent assessors, lower public education, political interference and socioeconomic uncertainty.

Practical implications

This study offers practical implications to policy and decision-makers in the West Malaysian local authorities. Despite inferior performance by West Malaysian local authorities, there is a need for conducting property tax reassessment activity to ensure the quality and uniformity of the assessment. This study suggests that local government stakeholders and managers should devote more attention to formulating long-term plans and promoting the property tax reassessment practice. The property tax reform could solve the current situation of substandard reassessment activity.

Originality/value

This study explains, compares and interprets the actual statistical data through the figures and summarises the challenges of property tax reassessment activity among local authorities.

Details

Journal of Financial Management of Property and Construction , vol. 29 no. 1
Type: Research Article
ISSN: 1366-4387

Keywords

Article
Publication date: 24 October 2023

Cyrine Khiari, Imen Khanchel and Naima Lassoued

This study aims to investigate the impact of pollution control bonds (PCBs) on overinvestment within utility firms.

Abstract

Purpose

This study aims to investigate the impact of pollution control bonds (PCBs) on overinvestment within utility firms.

Design/methodology/approach

This empirical study analyzes a data set comprising 215 US energy firms observed from 2011 to 2021, using the ordinary least square regression with standard errors adjusted for firm-level clustering.

Findings

The study reveals a negative relationship between PCBs and overinvestment, indicating that PCBs are an effective tool in curbing excessive investment. Additionally, it demonstrates that chief executive officer (CEO) overconfidence diminishes the influence of PCBs on overinvestment. These findings remain robust across various metrics for measuring overinvestment and CEO overconfidence, as well as when alternative estimation methods are used. These results align with insights derived from agency theory and upper echelon theories.

Research limitations/implications

Regulators are encouraged to actively promote the use of PCBs as a financing tool for environmentally focused initiatives. To achieve this, regulatory bodies should enhance their presence within the utility sector, particularly in regions grappling with higher pollution levels. This requires the implementation of strategic policies and regulatory frameworks aimed at mitigating excessive investments. Simultaneously, policymakers should take proactive measures to introduce financial instruments designed to optimize investment efficiency, thus facilitating eco-friendly projects.

Originality/value

To the best of the authors’ knowledge, this paper holds the distinction of being the first to examine the impact of a specific type of green bond, namely, PCBs, on overinvestment. Furthermore, it contributes to the literature on personality traits, particularly within the context of the upper echelon theory, by investigating the moderating influence of CEO overconfidence.

Details

Journal of Financial Reporting and Accounting, vol. 22 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Open Access
Article
Publication date: 11 September 2023

Raffaella Santolini

The paper aims to examine the role played by property tax in influencing strategic decisions regarding marital separation and divorce in Italian municipalities.

Abstract

Purpose

The paper aims to examine the role played by property tax in influencing strategic decisions regarding marital separation and divorce in Italian municipalities.

Design/methodology/approach

The empirical analysis is conducted on a sample of 6,458 Italian municipalities by applying the ordinary least squares (OLS) and instrumental variables (IVs) approaches.

Findings

The estimation results show a small increase in marital separations and divorces as the difference between the municipal secondary and primary home tax rate increases. Specifically, an increase of 1‰ in the property tax rate differentials is accompanied by an increase of six marital separations and four divorces per 1,000 inhabitants.

Research limitations/implications

The main limitation of the analysis is that the strategic behavior of the married couple is inferred from econometric analysis with data aggregated at the municipal level. To investigate this phenomenon more precisely, it would be useful to have individual data collected by surveys on strategic divorce decisions due to property tax incentives.

Originality/value

This study contributes to the scant existing literature on the tax incentives for strategic divorce. It is the first study to empirically investigate the effects of property tax on separation and divorce decisions by investigating the Italian context. In Italy, a property tax was introduced in 1993, encouraging “false” divorces by spouses with a second home since the tax on the secondary home was set at a rate higher than that on the primary residence. Moreover, there were no tax deductions and no additional tax breaks on the secondary home, while they were established on the primary one. Higher property taxes and the absence of tax breaks on the secondary home may have encouraged a strategic behavior whereby many married couples filed for false separation and divorce in order to recover part of property tax rebates.

Details

Journal of Economic Studies, vol. 51 no. 9
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 24 May 2023

Wanyi Chen and Fanli Meng

Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax…

Abstract

Purpose

Corporate digital transformation (CDT) has challenged traditional tax administration systems. This study examines the impact of CDT on tax avoidance behavior and tests whether tax authorities can identify this behavior.

Design/methodology/approach

Using data on listed companies on the Shanghai and Shenzhen Stock Exchanges from 2008 to 2020, this study applies the Heckman two-stage and cross-section models.

Findings

The results show that the higher the degree of CDT, the more aggressive the tax avoidance behavior. The CDT's impact on corporate tax avoidance is more significant under strong government tax efforts.

Originality/value

This study expands research on the economic consequences of CDT and the factors influencing corporate tax avoidance behavior. Moreover, it has important implications for governments to monitor tax avoidance behavior under the CDT, improve digital tax systems, and pay more attention to the tax administration of digital assets.

Details

International Journal of Managerial Finance, vol. 20 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 16 June 2023

Mohammad Kamal Abuamsha and Lana Majdi Hattab

The present research aims at identifying the latent factors that are driving the rise of the shadow economy in Palestine, assesses its magnitude from 1998 to 2021 and investigates…

Abstract

Purpose

The present research aims at identifying the latent factors that are driving the rise of the shadow economy in Palestine, assesses its magnitude from 1998 to 2021 and investigates the influence that its size has on the financial sustainability of Palestine's public budget.

Design/methodology/approach

The researchers employed the multi-indicator multi-causes (MIMIC) model to estimate the size of the shadow economy and investigate its effect on the financial sustainability of the public budget. Economic factors such as direct taxes, indirect taxes, government welfare, government spending and unemployment were considered causal variables, while indicators of financial sustainability included budget deficit, public debt and gross domestic product (GDP). The shadow economy served as an intermediary variable.

Findings

Based on the findings, the researchers recommend regulating and formalizing legitimate activities within the shadow economy. Additionally, they suggest promoting investment projects to reduce unemployment rates, lowering taxes on essential goods and consumer items and providing support to local producers in Palestine. These measures aim at addressing the challenges posed by the shadow economy and fostering economic stability.

Originality/value

The study reveals that the average size of the shadow economy in Palestine between 1998 and 2021 was 43.80%, fluctuating within the range of 39.92%–46.30%. It further establishes that an increase in direct and indirect taxes as well as unemployment contributes to the expansion of the shadow economy. Conversely, government welfare and spending exert a diminishing effect. Moreover, the study finds that the rise of the shadow economy correlates with an increase in public debt, budget deficit and GDP, indicating a negative impact on the financial sustainability of the public budget.

Details

Journal of Economic Studies, vol. 51 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 26 March 2024

Abba Ya'u, Mohammed Abdullahi Umar, Nasiru Yunusa and Dhanuskodi Rengasamy

Most research on tax evasion focused on microeconomic variables revolving around perceptions and decisions of individual taxpayers. However, a new wave of research is now…

Abstract

Purpose

Most research on tax evasion focused on microeconomic variables revolving around perceptions and decisions of individual taxpayers. However, a new wave of research is now investigating the role of macroeconomic variables in inducing tax evasion. This study adds to the limited studies in this new direction of research. Previous studies found that inflation, low gross domestic product (GDP) growth and gross fixed capital formation causes recession, increases unemployment, raise interest rates, hurts both domestic and foreign direct investments. This study examined the relationship between these variables and estimated tax evasion in Sub-Saharan Africa.

Design/methodology/approach

The study adopts a correlation research design with 2,300 data points collected from 23 countries in Sub-Saharan Africa. Specifically, tax to GDP ratio, gross fixed capital formation per GDP and the GDP annual growth report from each country for the period 2011–2020 was retrieved. Generalised least square regression technique was employed to analyse the data due to the presence of heteroskedasticity in the model and random effect was utilized based on the Hausman test. To avoid misspecification and biased result; therefore, all relevant test was conducted including the multicollinearity test.

Findings

The results indicate that GDP annual growth and gross fixed capital formation have a significant negative impact on estimated tax evasion in Sub-Saharan Africa. The findings further indicate a negative but insignificant relationship between inflation and estimated tax evasion in Sub-Saharan Africa. The study concludes that both GDP annual growth rate and gross fixed capital formation negatively influence estimated tax evasion and the policy implications in the African continent were discussed.

Originality/value

The new findings on the effects of GDP annual growth, growth fixed capital formation and inflation on estimated tax evasion provide novel knowledge that is currently lacking in the current literature, specifically Sub-Saharan African continent.

Details

African Journal of Economic and Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 25 September 2023

Md. Harun Ur Rashid, Farhana Begum, Syed Zabid Hossain and Jamaliah Said

This study aims to investigate whether socially responsible businesses with corporate social expenditure are less prone to engaging in tax avoidance. The study also examines…

Abstract

Purpose

This study aims to investigate whether socially responsible businesses with corporate social expenditure are less prone to engaging in tax avoidance. The study also examines whether political connections moderate the association between corporate social responsibility (CSR) and tax avoidance.

Design/methodology/approach

The study uses ordinary least squares to analyse the panel data of all 30 listed banks on the Dhaka Stock Exchange covering 2012 to 2020. The study uses a set of alternative variables to check the robustness of the findings.

Findings

Confirming the corporate culture theory, the study findings indicate that the higher the firms’ CSR expenditure, the lower the tax avoidance. Contrarily, the moderating effect of political connection weakens the role of CSR in tax avoidance, implying that political relation makes the firms socially irresponsible. Besides, the findings document that firms with strong political connections are more likely to be tax aggressive by weakening the role of CSR. The findings imply that firms with weaker political connections are more socially responsible than firms with strong political ties.

Research limitations/implications

The study provides the bank management and regulatory bodies valuable insights to take necessary actions so that they can easily monitor whether the banks follow their instructions regarding CSR and tax payments. As the politicians make the firm socially irresponsible, the regulatory bodies and bank management should not keep them or their relatives on the board.

Originality/value

The study contributes to the CSR and tax avoidance literature considering the moderating role of political connections in Bangladesh banking sector.

Details

Social Responsibility Journal, vol. 20 no. 4
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 14 August 2023

Robson Soe Rocha

Since the early 1990s, Brazil has adopted an experimental approach to environmental management. Its reforms continue to this day and have produced robust water-management…

Abstract

Purpose

Since the early 1990s, Brazil has adopted an experimental approach to environmental management. Its reforms continue to this day and have produced robust water-management policies. This article reveals the different positions, the power structures involved, and the result of the disputes and agreements concerning the social construction of legitimate environmental behaviour in jeans manufacturing.

Design/methodology/approach

Comparative case study. Data collection for this research started in 2017 and ended in 2020. The data were gathered by concentrating on a few cases in two clusters. The author visited public agencies, trade associations, and firms of all sizes and levels of specialization in the industry and conducted semi-structured interviews with them. The intention was to acquire systemic and deep knowledge of the local industry.

Findings

The article's findings demonstrate a divergence in typologies that reflects the ecological limits in the use of natural resources, law-enforcement policies, and firms' legal status. The article extends our understanding of the ability of organizations to respond to institutional pressures to become sustainable. This study's findings provide insights for policy design in times of increasingly catastrophic pollution in regions that are immersed in global competition.

Research limitations/implications

The study focuses only on two industrial textile clusters in Brazil, which may not be representative of the wider industry in the country or in other regions. The findings may not be generalizable to other industries or locations with different ecological limits, legal frameworks, and firm structures.

Practical implications

The article's practical implications include the need for tailored regulatory frameworks, effective law enforcement policies, promoting a culture of environmental responsibility among businesses, and collaboration among stakeholders in promoting sustainability. Policymakers, regulators, and businesses in industrial textile clusters in Brazil and other regions facing similar ecological and regulatory challenges can use these insights to develop more effective policies and practices that balance economic growth with environmental sustainability.

Social implications

State actors emerge as the most important stakeholder group in forging the upgrading of water-management systems and technology. The optimal solution to the problem is cross-institutional and multilevel collaboration and coalitions between the different authorities and organizations involved who need to pay due attention to the relevant ecological limits and social needs. Only when this multilevel collaboration is achieved and maintained will the state's agents be able to collaborate with industrial actors and society at large.

Originality/value

The article examines the various factors that influence water usage and analyses the dynamics of change in two distinct locations in an emerging market. It demonstrates that, despite the existence of the same regulatory framework in both locations, different outcomes can arise due to the construction of diverse coalitions between social actors.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2023-0154

Details

International Journal of Social Economics, vol. 51 no. 3
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 12 March 2024

Muiz Abu Alia, Islam Abdeljawad, Mamunur Rashid and Renad Anwar Frehat

This study aims to explore the use, effectiveness, motives and obstacles of analytical procedures (APs) used by auditors in Palestine, a context characterised by a pool of small…

Abstract

Purpose

This study aims to explore the use, effectiveness, motives and obstacles of analytical procedures (APs) used by auditors in Palestine, a context characterised by a pool of small and medium enterprises (SMEs), a limited skill set, poor quality of data, political uncertainty and a community-based business culture.

Design/methodology/approach

The study considers the audit market in Palestine using a sequential mixed-methods approach combining a questionnaire survey and a series of in-depth interviews. A total of 129 Big-4 and non-Big-4 auditors were surveyed.

Findings

The use of APs is driven by the auditor size (Big-4 vs non-Big-4) and the client size (large vs SMEs). Even though the use of APs has increased over the past decade, audit objectives, know-how, and personal, family and social connections among auditors and clients influence the quality of the audit process.

Practical implications

Small firms take advantage of the lack of audit governance in Palestine. Our findings suggest that the regulators should help bridge the knowledge-sharing programmes between the small and large audit firms to help improve audit quality.

Originality/value

Studies on audit quality, particularly using APs, in the context of politically unstable cases such as Palestine are limited. The study has implications for the use of APs in the case of SMEs to prepare for the technological revolution that will modernise audit procedures and quality soon.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

Open Access
Article
Publication date: 13 December 2023

David Feltenius and Jessika Wide

Since 2009 Swedish municipalities may apply the Act on System of Choice (LOV) in, among other things, eldercare. About half of the 290 Swedish municipalities have chosen this…

Abstract

Purpose

Since 2009 Swedish municipalities may apply the Act on System of Choice (LOV) in, among other things, eldercare. About half of the 290 Swedish municipalities have chosen this within home-care services for older citizens, thus creating conditions for a welfare mix where private and public providers compete. Some of these municipalities later made decisions to abolish LOV. This article aims to analyse the arguments put forward by municipal politicians to abolish LOV and discusses if the case of abandoning LOV represents a case of re-municipalization.

Design/methodology/approach

Qualitative method was used to analyse decision protocols and media materials from 20 Swedish municipalities that had abolished LOV in home-care services.

Findings

The article shows that politics and ideology seem to have only a limited significance in abolishing LOV. The most important arguments found in the empirical materials were instead pragmatic and related to the transaction costs: in smaller municipalities about the weak position of private providers and in larger municipalities about reported cases of welfare crime and extensive needs to control and review. In smaller municipalities, LOV was replaced by public monopoly and in larger municipalities by other types of procurements.

Originality/value

With its focus on eldercare in party-dominated municipalities, the article adds knowledge to the literature on drivers of re-municipalization but also discusses possible delimitations of the concept of re-municipalization.

Details

International Journal of Public Sector Management, vol. 37 no. 2
Type: Research Article
ISSN: 0951-3558

Keywords

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