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1 – 10 of over 18000M. Elizabeth Howard, Robert A. Seay and Ryan A. Seay
Online retailers often lack nexus within a purchaser’s home state and do not collect sales tax at the point of sale. Consumers exacerbate the loss of tax revenue by typically not…
Abstract
Purpose
Online retailers often lack nexus within a purchaser’s home state and do not collect sales tax at the point of sale. Consumers exacerbate the loss of tax revenue by typically not remitting the use tax on these purchases. To date, very little research addresses the effectiveness of methods to increase use tax compliance, and the need for more work is well documented in the literature.
Design
This study examines, in a controlled economics-based experiment, the effectiveness of current approaches to close the use tax gap. Participants are randomly assigned to one of three treatments to determine the extent to which they would voluntarily pay use tax on a purchase transaction. The experiment mimics the natural environment and measures the participants’ actual compliance with cash payouts.
Findings
We find individuals are significantly more likely to pay the use tax when given detailed information about their online purchases and the use tax obligation compared to only receiving a description of the use tax. We also find compliance is significantly higher when individuals have a separate state income tax line on which to report use tax liability.
Value
Unlike personal income tax compliance, consumers are more likely to evade use tax payments because taxing authorities are usually unable or unwilling to audit consumer purchases. This makes an examination of the effectiveness of reporting and collection methods worthwhile. This study measures use tax compliance based on actual consumer behavior with real economic consequences rather than taxpayer intentions, as reported in prior work. This is important because intentions and behavior are often different, especially in an economic setting. Finally, policymakers will benefit from an effectiveness-assessment of actual methods, rather than hypothetical and potentially unfeasible approaches, to try and increase use tax compliance.
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Jeremy Lee and Alexey Nikitkov
Consumption taxes are an integral part of government revenue in countries around the world and are often subject to consumer evasion. The rapid rise of electronic commerce has…
Abstract
Consumption taxes are an integral part of government revenue in countries around the world and are often subject to consumer evasion. The rapid rise of electronic commerce has exacerbated this problem as cross-border selling over the internet has enabled foreign businesses to sell and avoid collection and remittance of tax on their sales.
In this paper, we search for the solution to this problem through the analysis of three tax collection models: vendor, financial institution, and internet service provider (ISP). In addition, we examine administrative tools that enable more effective collection as well as inducements for taxpayers or collection agents to carry out their responsibility.
We conclude that the ISP collection model is not feasible at this time. On the other hand, we find that the vendor model, when supplemented with appropriate administrative tools and inducements, and the financial institution model, both represent viable options for policymakers to consider.
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Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely…
Abstract
Nobody concerned with political economy can neglect the history of economic doctrines. Structural changes in the economy and society influence economic thinking and, conversely, innovative thought structures and attitudes have almost always forced economic institutions and modes of behaviour to adjust. We learn from the history of economic doctrines how a particular theory emerged and whether, and in which environment, it could take root. We can see how a school evolves out of a common methodological perception and similar techniques of analysis, and how it has to establish itself. The interaction between unresolved problems on the one hand, and the search for better solutions or explanations on the other, leads to a change in paradigma and to the formation of new lines of reasoning. As long as the real world is subject to progress and change scientific search for explanation must out of necessity continue.
Sees the objective of teaching financial management to be to helpmanagers and potential managers to make sensible investment andfinancing decisions. Acknowledges that financial…
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.
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Ram Al Jaffri Saad, Aidi Ahmi, Norfaiezah Sawandi and Norazita Marina Abdul Aziz
This study aims to identify the inputs from zakat administrators and experts needed for more efficient and effective zakat revenue generation.
Abstract
Purpose
This study aims to identify the inputs from zakat administrators and experts needed for more efficient and effective zakat revenue generation.
Design/methodology/approach
Face-to-face interviews with zakat executives, administrators and experts are conducted to collect data.
Findings
The findings show three components of input required in the zakat transformation: environment, resources and history. The environmental component comprises five sub-components: companies, banks, zakat recipients, individual zakat payers and the legislative, while the resource sub-components comprise tangible and intangible resources. For history, two components, namely, achievements and challenges, need to be taken into account by the zakat administration.
Research limitations/implications
This study’s main implication is that the components proposed in this study can serve as the basis for developing new strategies for improving zakat collection and distribution management to achieve a more efficient and effective level.
Practical implications
This study will be helpful for policymakers, especially zakat authorities, on how to enhance their administration.
Originality/value
The model developed in this study will help the zakat administration to reform and enhance zakat compliance and zakat revenue generation.
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Jorge Martinez-Vazquez, Jameson Boex and Javier Arze del Granado
Abdul Haris Muhammadi, Zahir Ahmed and Ahsan Habib
The purpose of this paper is to examine the challenges faced by Indonesian tax auditors in auditing multinational transfer prices of intangible assets. This study then explores…
Abstract
Purpose
The purpose of this paper is to examine the challenges faced by Indonesian tax auditors in auditing multinational transfer prices of intangible assets. This study then explores the suitability of mechanisms currently used by Indonesian tax auditors to ensure appropriate tax audit adjustments.
Design/methodology/approach
The authors use a qualitative research method involving semi-structured and open-ended interviews with the tax auditors in Indonesia. The authors also include some Indonesia court decisions pertinent to the research question above.
Findings
Findings indicate that Indonesian tax auditors face a number of difficulties during the audit of transfer pricing cases derived from intangible property, including a lack of transparency in taxpayers’ bookkeeping; limited taxpayer cooperation in providing data and documents; transfer pricing regulations; and problems related to organization and human resources. The study also finds that Indonesian tax auditors and tax officials handle transfer pricing cases by using a legal basis as reference and by performing a number of activities, including among others, comparable analysis.
Originality/value
The findings of this study should assist policy makers to improve the quality of transfer pricing audit. Also, tax auditors and account representatives who do not have enough experience in auditing transfer pricing cases derived from intangible property rights might use the outcomes of this study as a guide for dealing with those cases.
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