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Article
Publication date: 2 October 2019

Zhiyuan Wang, Jagdeep Singh-Ladhar and Howard Davey

This paper aims to examine the indirect tax reform process in China. Specifically, it examines the reform of business tax to value-added tax. Inefficiencies within the new…

Abstract

Purpose

This paper aims to examine the indirect tax reform process in China. Specifically, it examines the reform of business tax to value-added tax. Inefficiencies within the new tax system are identified and discussed. The “business tax to value-added tax” reform was seen as an essential element in promoting the economic transition and stimulating the service industries (Jin and Jin, 2013).

Design/methodology/approach

The paper uses archival and current literature. In undertaking the study, the different periods of indirect tax are examined, prior to 1994, 1994-2012, the changes from 2012 culminating in the new 2017 regime. Attributes of “good” value-added tax (VAT) systems are covered as well as a comparison with New Zealand’s goods and services tax (GST).

Findings

The paper finds that to align with the international trend of indirect tax development and more efficiently accomplish the economic transition China needs to build a more neutral VAT system with fewer reduced rates and exemptions and the tax system have created tax inefficiencies and increased the compliance cost. VAT is imposing an increasingly significant impact on China’s national economy and industrial structure as well as accountants.

Originality/value

This is the first study that analyses the indirect tax reforms that are currently being implemented in China and as such has lessons for China but also for VAT/GST in general. We should not forget how special New Zealand’s GST is and the clarity of focus of those who implemented it!

Details

Pacific Accounting Review, vol. 31 no. 4
Type: Research Article
ISSN: 0114-0582

Keywords

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Article
Publication date: 8 September 2021

Ayse Nil Tosun and Ayfer Ezgi Yilmaz

This study examines the effect of taxes, similar financial liabilities, and demographic variables such as respondent age, company age, and field of operation on the table…

Abstract

Purpose

This study examines the effect of taxes, similar financial liabilities, and demographic variables such as respondent age, company age, and field of operation on the table wine market in Turkey.

Design/methodology/approach

An online survey was conducted on the wine producers and importers via SurveyMonkey. Thirty-six survey questions were answered using a five-point Likert scale. The responses obtained from 51 owners and administrators of wine companies were analyzed using the Statistical Package for the Social Sciences 23 program.

Findings

Excise and value-added taxes affected the amount and price of table wine production in Turkey, whereas the banderole affected quality and price. The excise tax, value-added tax, banderole, Resource Utilization Support Fund, customs duty, and authorizations also affected the amount, quality and price of table wine imports. Although financial liabilities such as the banderole, Resource Utilization Support Fund and authorizations required for import do not constitute a heavy load on wine costs, they do have similar effects as other taxes on table wine imports.

Research limitations/implications

A limitation of this study was its sample size. Only 51 individuals responded, as it was an online questionnaire. However, this did not compromise the representativeness of the sample with regard to the company's field of operation (production and import of table wine), lending credibility to the opinions provided.

Originality/value

This study establishes that, contrary to popular belief, decisions regarding wine production and import are not solely affected by a heavy tax burden. Other factors, such as the banderole, Resource Utilization Support Fund, ages of companies and respondents and authorizations required for import, which are not viewed as a heavy burden in monetary terms, also prove to be decisive.

Details

British Food Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 1 February 1989

GORDON RICHARDS

This article examines the macroeconomic impact of a consumption‐based value‐added tax (VAT) using simulations of a large‐scale model. The VAT is imposed as a structural…

Abstract

This article examines the macroeconomic impact of a consumption‐based value‐added tax (VAT) using simulations of a large‐scale model. The VAT is imposed as a structural reform of the tax code rather than as a revenue‐raising device, i.e., the revenues from the VAT are offset by compensatory reductions elsewhere. Three basic scenarios are examined, in which 1) the VAT is offset by individual rate reductions, 2) abolition of the corporate profits tax in conjunction with a small individual rate cut, and 3) an investment tax credit with the balance of the revenues offset by a personal rate cut. Additionally, this paper examines the effects of the microeconomic incidence of the VAT, i.e., whether it is fully passed through to output prices or shifted back onto profits. The finding is that the VAT in general raises the long‐term level of output, but at the cost of initial output losses, which are in evidence even when the associated rise in the price level is accommodated by a corresponding shift in monetary policy. In addition to changes in the intertemporal distribution of growth, there are significant changes in the composition of GNP, which shifts away from consumption, toward business fixed investment and net exports. These changes are particularly pronounced when the VAT is fully passed through. When the tax is partially shifted back, the gains in investment and trade are less marked, while business profits are reduced, and the long‐term increase in output is smaller.

Details

Studies in Economics and Finance, vol. 12 no. 2
Type: Research Article
ISSN: 1086-7376

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Article
Publication date: 1 October 2004

L. Julyan

This article reports on a study on the value‐added tax (VAT) levied on new residential properties sold to individuals by developers registered for VAT purposes. The…

Abstract

This article reports on a study on the value‐added tax (VAT) levied on new residential properties sold to individuals by developers registered for VAT purposes. The objective of the research was to evaluate the current VAT provisions applicable to new residential properties in South Africa by measuring them against the principles of taxation, and by comparing the results with those obtained for the United Kingdom, Canada and Australia. Similarities and differences are established and evaluated. It is recommended that the supply of new residential properties in South Africa be zero rated.

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Article
Publication date: 16 October 2007

Konstantin V. Pashev

The paper sets out to study value added tax's (VAT's) exposure to missing‐trader or carousel fraud and possible countermeasures, their costs and benefits.

Abstract

Purpose

The paper sets out to study value added tax's (VAT's) exposure to missing‐trader or carousel fraud and possible countermeasures, their costs and benefits.

Design/methodology/approach

It studies the modus operandi of network fraud by distinguishing it from individual evasion. Drawing on the experience of Bulgaria, it discusses the costs and benefits of the principle of joint liability and of the VAT account, the latter being tried so far only in Bulgaria.

Findings

The study concludes that the possible solutions are in the field of optimizing risk management and the application of the principle of joint liability rather than through tighter controls at entry and on the conduct of business.

Originality/value

Confronted with the drastic increase of carousel fraud, the European Commission identified the urgent need of a coherent strategy to combat it. Yet, neither the literature nor the practices of tax and law enforcement have addressed the threat adequately. Tax evasion literature is focused on the drivers and deterrents of individual evasion, while studies of VAT network crime rarely consider the preventive instruments' extra compliance costs for taxpayers. In this context, Bulgaria's unique experience with the VAT account provides useful insights to policy makers about its limitations and the application of the joint liability principle.

Details

Journal of Financial Crime, vol. 14 no. 4
Type: Research Article
ISSN: 1359-0790

Keywords

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Article
Publication date: 1 April 2006

R.D. de Swardt and R. Oberholzer

E‐commerce has changed the way in which business is conducted. One instance of this is that it has made the digitisation of products possible. This shift has severe…

Abstract

E‐commerce has changed the way in which business is conducted. One instance of this is that it has made the digitisation of products possible. This shift has severe implications for traditional consumption taxes, which were developed under the premise of a physical presence in a tax jurisdiction. A large number of countries in the world that impose Value‐Added Tax (VAT) on the supply of goods and services, including South Africa, are affected by this shift. The Organisation for Economic Cooperation and Development (OECD) has suggested a number of principles that should apply to consumption taxes in e‐commerce. These principles are intended to provide fiscal climates in which e‐commerce can flourish and ensure taxation systems that secure individual countries’ tax bases. A comparison between the OECD principles and the rules pertaining to the imposition of VAT in South Africa on the supply of digitised products reveals several discrepancies and uncertainties. A baseline survey among VAT specialists in South Africa, conducted in order to substantiate these findings, confirmed these discrepancies and uncertainties in practice.

Details

Meditari Accountancy Research, vol. 14 no. 1
Type: Research Article
ISSN: 1022-2529

Keywords

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Article
Publication date: 1 April 2001

L. van Schalkwy

Years ago, the Katz Commission questioned the constitutionality of certain provisions of the Income Tax Act, 1962. The purpose of this article is to investigate the…

Abstract

Years ago, the Katz Commission questioned the constitutionality of certain provisions of the Income Tax Act, 1962. The purpose of this article is to investigate the general principles of human rights litigation and the progress made to date in respect of rectifying the unconstitutional provisions of the Income Tax Act that were identified by the Katz Commission. It has been established that, although some unconstitutional provisions have been amended, others still prevail, and that, in the light of the factors identified, they will probably not be challenged successfully by taxpayers.

Details

Meditari Accountancy Research, vol. 9 no. 1
Type: Research Article
ISSN: 1022-2529

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Article
Publication date: 1 October 1972

BILL WALSH

Next month Mr Walsh follows up this basic information by proposing a training plan for VAT.

Abstract

Next month Mr Walsh follows up this basic information by proposing a training plan for VAT.

Details

Industrial and Commercial Training, vol. 4 no. 10
Type: Research Article
ISSN: 0019-7858

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Article
Publication date: 1 February 1993

Richard Dobbins

Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that…

Abstract

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

Details

Management Decision, vol. 31 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 March 1994

Karl Socher and Paul Tschurtschenthaler

The paper tries to look into the economic relations between tourism and agriculture. Agriculture is supplying values for the tourism industry directly and indirectly. The…

Abstract

The paper tries to look into the economic relations between tourism and agriculture. Agriculture is supplying values for the tourism industry directly and indirectly. The direct supply arises from the sales of agricultural products, which are bought by the tourism sector either from farmers or from firms who use agricultural products as an input. The indirect supply is the cultivation and preservation of the landscape, the most important factor of production for summer tourism in the alps. The costs of preservation are born partly by the farmers, and partly by the tax payer subsidizing the farmers, the consumer paying higher prices than the world market prices and only in few cases by a small amount of subsidies paid directly or indirectly by the tourism industry. Whereas the direct supply of farmers could be substituted by foreign products, the indirect input of the agricultural sector for the tourism industry has necessarily to be produced by domestic farmers.

Details

The Tourist Review, vol. 49 no. 3
Type: Research Article
ISSN: 0251-3102

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