Fiscal policies for economic sustainability in COVID-19: what do subnational governments in Brazil and Colombia reveal?

This research aims to compare public governance response measures regarding the fiscal policies adopted by subnational governments for economic sustainability in Brazil and Colombia in the face of the Covid-19 crisis. Data collection was performed on 92 government websites from 27 Brazilian states and 33 Colombian departments (subnational governments). Through exploratory qualitative analysis, fiscal policies were studied between 2020 and 2021, instituted by laws and decrees. Categorized into two strands: (i) laws supporting the maintenance of economic sustainability and (ii) tax incentives. The main results indicated that in a short time government needed to create methods and tools to adapt to the context of social isolation and revealed fiscal policies to support small businesses. In Brazil, governments have implemented actions: supporting vulnerable people, self-employed entrepreneurs, small businesses, such as granting financial credit. In addition to tax incentives, there was exemption, postponement and payment in installments. In Colombia, a line of credit was granted to support the liquidity of all companies in the tourism sector, the incentives were granted through tax exemptions, except for the tourism and air transport sectors. As much as the incentives launched were aimed at minimizing the impacts of the pandemic and maintaining part of the revenue collected by governments, for both countries the need for tax reform was evident. It should be noted that Colombia started processing the tax reform project in 2021 and on November 4, 2023, it was approved by both legislative houses, and is in the final drafting process. This article theoretically contributes to the expansion of studies that assess economic sustainability and public governance in developing countries in the face of relevant economic crises.Alternate :Esta pesquisa tem como objetivo comparar as medidas de resposta de governança pública referentes as políticas fiscais adotadas pelos governos subnacionais para a sustentabilidade econômica no Brasil e na Colômbia frente à crise da Covid-19. A coleta de dados foi realiza em 92 websites governamentais de 27 de estados brasileiros e 33 de departamentos colombianos (governos subnacionais). Por meio da análise qualitativa exploratória foram estudadas as políticas fiscais, entre 2020 e 2021, instituídas por leis e decretos. Categorizados em duas vertentes: (i) as leis de apoio à manutenção da sustentabilidade econômica e (ii) os incentivos fiscais. Os principais resultados indicaram que em pouco tempo os governos precisaram criar métodos e ferramentas para se adaptar ao contexto de isolamento social e revelaram políticas fiscais de apoio aos pequenos negócios. No Brasil, os governos têm implementado ações: apoiar pessoas vulneráveis, empreendedores autônomos, pequenos negócios, como concessões de crédito financeiro. Além dos incentivos fiscais, houve isenção, postergação e parcelamento de impostos. Na Colômbia, foi concedida uma linha de crédito para apoiar a liquidez de todas as empresas do setor de turismo, os incentivos foram concedidos por meio de isenções fiscais, exceto para os setores de turismo e transporte aéreo. Por mais que os incentivos lançados visassem minimizar os impactos da pandemia e manter parte da receita arrecadada pelos governos, para ambos os países a necessidade de uma reforma tributária ficou evidenciado. Cabendo destacar que a Colômbia iniciou a tramitação do projeto de reforma tributária em 2021 e no dia 04 de novembro de 2023, foi aprovado pelas duas casas legislativas, estando em processo de redação final. Esse artigo contribui teoricamente para a expansão de estudos que avaliam a sustentabilidade econômica e a governança pública em países em desenvolvimento diante crises econômicas relevantes.

The Taxation of 'Digital Nomads' and the '3 W's': Between Tax Challenges and Heavenly Beaches

Work mobility is not something new, but it certainly received an important boost with the COVID-19 pandemic as many people began working remotely which reflected on their lifestyle. In this context, the objective of the present study is to analyse the challenges imposed by what is known as 'digital nomads' from the exclusive perspective of individual taxation. The first part aims to understand the first 'W', i.e., who the 'digital nomads' are and the factors that favour the choice for this type of work. Subsequently, it examines the impacts caused by the 'digital nomadism' in determining the tax residence (second 'W' – where) and presents the measures, albeit incipient and indistinguishable, adopted by some countries in relation to this phenomenon. The third section delves into the taxation of income obtained by 'digital nomads' through either an employment relationship or the provision of services (third 'W' – what). Based on the analysis of examples and the presentation of some alternatives, this study seeks to demonstrate the need to adapt the tax residence rules at both of the levels of domestic law and double tax treaties (tiebreaker rules). The rules on the taxation of income from employment and the provision of independent services also demand modifications that detach them from the strict need for a physical presence.

Facing or retreating? Evaluating the impact of fiscal pressure and the selection preference of tax efforts among Chinese local government

As China's economy enters a new era, fiscal pressure is growing rapidly. How will local governments determine their tax efforts under pressure? Facing or retreating? This paper selects macro data of 30 provincial administrative regions from 2000 to 2018, using instrumental variable method and threshold regression model, while, putting fiscal pressure, land-transferring fees, local government debt and transfer payments into the same regression equation to test the causal relationship between fiscal pressure and local tax efforts. We found that local governments will choose to raise tax efforts under fiscal pressure. Moreover, the heterogeneity analyses prove that eastern local governments prefer higher tax efforts. When the growth rate of tax and economy is low, local governments have less motivation to strengthen tax collection and administration. Threshold regression tests show that transfer payments have a moderating effect on local tax efforts, and transfer payments has a threshold effect. When the transfer payments are under the minimum threshold value or above the maximum threshold value, it may lead to inaction of local governments, who do not try their best to raise tax efforts. These findings are valuable in policy making for the construction of sustainable public finance.

La modernización del sistema fiscal en el Plan de Recuperación, Transformación y Resiliencia de España

El Consejo de Ministros del Gobierno de España, aprobó el pasado mes de abril el Plan de Recuperación, Transformación y Resiliencia (PRTR), como una herramienta más para superar la sacudida económica y social que ha supuesto la pandemia de COVID-19. Además de este plan, la reactivación de la economía española va a estar supeditada al proceso de vacunación;la estabilidad financiera global y la recuperación del comercio internacional;así como el grado de destrucción del tejido empresarial y de impacto estructural en el mercado laboral.

Pension systems in south-eastern Europe: what worked and what did not

Many south-east European states made the transition from socialist to market economies. All described here had to reform their pension systems to match the new context in which these operated. The experiences of 10 countries are reviewed – seven of which were once part of Yugoslavia. Some countries’ reforms were more radical than others. Five of them merely adapted the Bismarckian systems they had inherited;four others adopted the “three pillar” model that the World Bank had been propagating. One went further than that. The four who followed World Bank model were often forced to backtrack. Whatever the longer-term benefits, they generated their own shorter-term fiscal problems. Nonetheless, the most radical reformer gives some indications of possible ways forward. The south-eastern European states do not have financial markets that can support capitalised/funded pension systems. Nor do they have the resources to pay proportional pensions that, at the same time, keep retired people out of poverty. The article suggests that their governments should concentrate upon improving economic performance to satisfy longer term aspirations and on ensuring that pensioners are able to live properly if not luxuriously by using tax-financed transfer measures. Provision above this level can be secured through savings plans, but it must be accepted that the investments to secure those savings will have to be made abroad.

Expenditure Responsibility Assignment and High-Quality Equity of Compulsory Education—Empirical Analysis Based on OECD Countries

Education for sustainable development poses high challenges to governments and public finance. Compared with OECD countries, China’s local governments bear too much expenditure responsibilities with respect to compulsory education, which theoretically affects the high-quality equity of compulsory education. Through empirical analysis using cross-country data with the panel spatial model, it is found that the proportion of central government expenditure and the government’s educational effort both have a steady and negative impact on the regional variable coefficient of compulsory education completion rate. Unitary or federal regime does not have a significant impact on the result. This paper suggests establishing a sharing financing system among all levels of government. According to the minimum standard guarantee principle of basic public services, the central government, which has the strongest fiscal capacity, should establish the national standard and take the responsibility on coordinating and balancing education service among regions and promoting the inter-regional equity. Local governments are encouraged to provide education services above national standard in accordance with their fiscal capacities.

Identifying Growth-Enhancing Tax Reforms in Advanced Countries Using World Tax Index Dataset

One of the major economic reaction of the European union on Covid-19 was to create a programme called Next Generation EU. Due to the programme, national governments of member states should prepare and approve a set of reforms. Slovak government drafted a document labelled as Modern and successful Slovakia. The document has included a prepared public finance reform which among other things contains tax code changes which are presented as growth-enhancing. It takes basis from believing that some taxes are more growth-reducing than others. These are taxes mostly levied on labour and other productive doing. If there is a change within the structure of taxation, which goes from direct taxes to others, it should promote economic growth according to the arguments using in public debate. The goal of this paper is to identify such tax reforms employing a novel World Tax Index dataset in the cross-country sample in the period from 2000 to 2018.

How Do Firms Respond to Reduced Labor Costs? Evidence from the 2007 Swedish Payroll Tax Reform

One way for policymakers to reduce labor costs and stimulate the recruitment of marginalized groups of labor in a highly unionized economy is to lower payroll taxes. However, the efficiency of this policy instrument has been questioned, and previous evaluations have mostly found small employment effects for such reforms. We investigate the effects of a payroll tax cut in Sweden that decreased firms’ labor costs in relation to the number of young employees that they had employed when the reform was implemented in 2007. We find that most firms received small labor cost savings as a result of the reform, but those that received larger cost savings increased their number of employees significantly more than firms that received no, or minor, labor cost savings. Our findings also suggest that the payroll tax cut increased the total wages paid to incumbent workers, but the wage effect was too small to offset the positive extensive-margin employment effect of the reform. In total, we find that the Swedish payroll tax reform created 18,100 jobs over the period 2006–2008;most of these jobs were within the targeted group of young employees.

Analysis on the Steady Growth Effect of China’s Fiscal Policy from a Dynamic Perspective

Under the goal of a “new development pattern”, it is of great practical significance to accurately identify the economic growth effect of fiscal and tax policies. This paper constructs a TVP-FAVAR model to measure the economic effects of China’s fiscal and tax policies at the aggregate and structural levels. The results show that the reduction in total tax has a positive effect on real variables such as output and consumption;especially at the present stage, the promotion effect of total tax reduction on economic growth is relatively strong, but the stimulation effect on price is relatively weak. Further, the tax structure in which the ratio of direct tax to total tax increases and the ratio of indirect tax to total tax decreases is more conducive to the increase in output and consumption, and will not strongly stimulate the rise of price level. Therefore, at this stage, China should continue to vigorously implement the tax reduction policy and ensure the continuity of the tax reduction policy. At the same time, we should continue to optimize the tax structure and give better play to the regulatory role of fiscal and tax policies in income redistribution, so as to achieve the goal that fiscal and tax policies help build a “new development pattern” and promote high-quality economic development.

Influence of FII Flows on Indian Stock Market: An Empirical Study

This paper examines the impact of Foreign Institutional Investors (FIIs) on the Indian stock market. Secondary data was collected for a period of 15 years from 2006-07 to 2021-2022 and analyzed using descriptive statistics, correlation matrix, multiple regression and structural equation model. Descriptive statistics shows that the mean of Sensex is very high, followed by equity flow, debt, debt-VRR and hybrid. The highest variance has been found in equity, followed by debt, hybrid, Sensex and debt-VRR. Skewness is the highest in debt-VRR, followed by hybrid, debt, Sensex and equity. Sensex has a negative and insignificant relationship with equity flow, whereas debt-VRR has a positive and significant relationship at 10% level of significance. Hybrid and debt have a significant relationship. Multiple regression model has been used to examine the impact of FIIs on Sensex. The dependent variable is Sensex and the independent variables are equity, debt, hybrid and debt-VRR. The regression model indicates that adjusted R2 is 0.154, which means that all independent variables have caused 15.40% variance in Sensex during the study period. However, all the independent variables have insignificantly impacted Sensex.

Der steuerliche Umgang mit Verlusten: Reformoptionen für die Corona-Krise

ZussamenfassungIm Jahr 2020 werden viele Unternehmen durch die Corona-Pandemie Verluste erleiden. Das deutsche Steuersystem behandelt Gewinne und Verluste asymmetrisch: Während Gewinne sofort versteuert werden müssen, führen Verluste oft nicht zu direkten Steuererstattungen. Dieser Beitrag diskutiert verschiedene Möglichkeiten, wie die steuerliche Behandlung von Unternehmen in Verlustsituationen verbessert werden kann. Eine Mikrosimulation der Reformoptionen zeigt, dass eine betragsmäßige Ausweitung der Verlustrücktragsmöglichkeiten eine deutlich größere Wirkung entfaltet als ein längerer Rücktragszeitraum. Bessere Verlustrücktragsmöglichkeiten setzen zudem starke Investitionsanreize.Alternate :Due to the corona pandemic, many companies will suffer losses in 2020. The German tax system treats profits and losses asymmetrically: Whereas profits are taxed immediately, losses do not generate immediate tax refunds. This article discusses different options to improve the tax treatment of companies in loss situations. A microsimulation of these reforms reveals that extending the maximum amount for loss carry-back has a larger impact than extending the loss carry-back period. Enhancing loss carry-back opportunities also creates strong investment incentives.

Tax & Accounting Update: Certified Public Accountant

Clearly, the COVID-19 pandemic is a triggering event that would cause many companies to test goodwill for impairment on an interim basis-i.e., before the scheduled annual testing date, said Scott Ehrlich, president of Mind the GAAP, LLC. Because of the overall decline in market values, more reporting units would likely fail the goodwill (impairment test... the fair value) of the reporting unit will be less than its carrying amount. PCAOB News Auditors Obligated to Provide High-Quality Audits during Crisis With the unprecedented challenges presented by COVID-19, the PCAOB has issued a staff guide to remind independent auditors of their obligations to follow applicable rules and standards diligently as they complete their audit work. GASB News No Deferral Planned for Interest Rate Reform Standard GASB has said its decision to defer the effective date of some critical accounting standards to ease implementation hurdles brought on by the COVID-19 pandemic will not include rules on reference rate reform.

Excess Profits, Taxpayer-Subsidized Philanthropy, and the Coronavirus Crisis: Charitable Giving of the Tech Elite in Response to the Pandemic

This paper addresses how the tech elite has benefited financially from the Coronavirus crisis, as well as how they have sought to give back some of their gains in order to help the broader population. We have gathered data on the stock prices, corporate revenues, and profits of the Big Tech firms and on the incomes and wealth of the tech elite, and we compare these winnings with their philanthropic giving during the pandemic year of 2020. We note that tax policies undergird both the explosion of tech profits and the growth of philanthropic giving in response to the crisis. We find that the winners among the tech elite have benefited dramatically from the pandemic without necessarily donating large amounts of money relative to their wealth. We argue that tax reforms are necessary to ensure that more of the social product comes under the democratic control of the public treasury. Copyright © 2021 John Torpey, Hilke Brockmann, Braelyn Hendricks

What Is Out There and What Can We Learn? International Evidence on Funding and Delivery of Long-Term Care

This article describes the social care funding and delivery arrangements of a varied selection of developed countries, focusing on long-term care of older people. International evidence and latest reforms can inform the debate as countries struggle economically. Some have opted for mandatory social insurance that provides universal coverage. A premium is paid and if the insured individual or relatives require support, they are entitled to it. Others opted for a similar universal system but with earmarked taxation, while others fund their social care entirely from general taxation. Many chose a safety-net system in which benefits are means-tested leaving wealthier individuals to secure private arrangements of care. Within the UK, the level of support varies as Scotland provides personal care free of charge, being more generous than England, Wales and Northern Ireland. There is no “one solution”, but understanding different options can help in the discussion of current and future reforms.

Student Loan Planning in Response to COVID-19 and Recent Legislation

If you speak with any financial, tax, or legal professional, the consensus is usually the same--there has been an overwhelming amount of legislation passed in recent years. In 2017, there was the Tax Cuts and Jobs Act (TCJA), arguably the largest tax reform within the past two decades. Two years later, Congress passed the Setting Every Community Up for Retirement Enhancement Act (SECURE Act), bringing substantial changes to the employee benefit and retirement space. Then in 2020, the world came to a standstill due to the COVID-19 pandemic. To avoid a crippling and prolonged recession, the US Congress passed three stimulus packages. Altogether, each of the five bills impacts taxpayers in slightly different ways, but they share a high degree of correlation. This includes tax bracket and marginal rate adjustments, revised credits, stimulus checks, and employee benefit and retirement options. Yet despite the numerous legislative changes, there is one area that has gone relatively untouched: student loans.

Impact of COVID-19 on Small Industries in India: A Quarterly Peer Reviewed Multi-Disciplinary International Journal

Study is intended to emphasis significant impact of covid-19 a global pandemic situation in Indian economy. Indian economy consists various segments like, rail system, ecommerce industry, automobile sector, restaurants industry, information technology and software services, travels and tourism industry and lots of others industry having vital role in Indian economy. Economy was running as usual and suddenly at the end of third quarter of fiscal year 2019-20 a novel corona virus entered in Indian territory and start to infect the peoples silently. Gradually number of infected persons increased and a global pandemic situation been declared by the concerned authorities. Just within two months it's been spread across the country and survival gone typical in normal course. Hence Indian government decided to complete lockdown nationwide to cope up with this global pandemic situation. Indian economy been sickening due to global pandemic situation. Every industry adversely affected by this covid-19 a global pandemic. Financial as well as convenience crises been arisen. To run and maintain economy every government required funds which is collected inform of taxes like, incometax, goods and servicetax, etc. goods and services tax leviable only on supply of goods or services. Now in nationwide lockdown, supply of goods and services are completely affected adversely. Hence GST collection will also be affected adversely.

Precarious but popular? The German mini-job scheme in comparative research on work and welfare

This review paper critically examines a range of analytical frameworks used to analyse the German mini-job scheme in comparative research on work and welfare. The approaches examined include labour market dualisation in comparative political economy research and welfare-to-work policies in comparative social policy research. The paper claims that using stylized facts instead of a thorough understanding of the broader context of national employment and social systems leads to misinterpretations in terms of policy learning. By describing the institutional context and main drivers of the evolution of mini-jobs over time, based on variety of data sources, statistics and empirical studies, the paper addresses the critical role of this specific employment scheme for gender equality, largely ignored in the comparative literature.

Pandemic and progressivity.

Based on a survey of 2500 US adults, we show that serious illness or job losses caused by the COVID-19 pandemic increase support for temporary progressive levies or structural progressive tax reform, controlling for socioeconomic and demographic characteristics. People who reveal preferences for spending items (more on police, military, border protection; less on education, health, environment) that are associated with communitarian (rather than universalist) moral perspectives show generally weaker support for progressive reforms, but more of them change their views following personal experience. The results are consistent with previous findings that economic upheavals can mold individuals' views on policy matters. SUPPLEMENTARY INFORMATION: The online version contains supplementary material available at 10.1007/s10797-021-09700-2.