ABSTRACT
Value-added Tax (VAT), a turnover tax levied on the value appreciated in commodities production, circulation and sale, has been widely practiced by economies worldwide for its neutrality. From the international perspective, European Union VAT and New Zealand VAT stand out as characteristic models of VAT development and reform history. With changing economic development models and the growth of e-commerce businesses, VAT systems have been upgraded to meet taxation challenges brought about by the digital economy. Recently, VAT policies and measures have been introduced particularly to combat the COVID-19 impact. In China, the VAT system has been reformed constantly over the past 40 years and has been converging with international practice. China now needs to address emerging VAT issues through legislation, tax incentives, and tax-rate grades so as to meet challenges in VAT collection and management and to suit the "new normal” of economic development. © 2022 Brill Academic Publishers. All rights reserved.
ABSTRACT
Orientation: The taxability of e-commerce transactions have been the subject of many studies to protect governments from Value-Added Tax (VAT) erosion, illegal recovery and fraud. Research purpose: This study critically analyses the challenges posed by e-commerce transactions in South Africa's VAT Act . Recommendations are made for amendments to the VAT Act to improve rules to effectively tax e-commerce transactions occurring in South Africa. Motivation for the study: Globally, including in South Africa, enforcing relevant VAT legislation to target output tax collections and input tax credits from e-commerce transactions aptly remains a challenge. Research approach/design and method: By integrating qualitative literature reviews and comparative synthesis, this study employed a comparative legal methodology. VAT levied on e-commerce transactions in South Africa is compared to the Organisation for Economic Co-operation and Development's guidelines as well as New Zealand's and Australia's Goods and Services Tax legislations. Main Findings: While the South African VAT Act aligns with international best practices on the use of intermediaries, there are some differences as detailed in the study. Practical/managerial implications: To align with international trade counterparts, the South African VAT Act should differentiate between business-to-business and business-to-consumer sales. A provision concerning the place of consumption for bundled goods should be included in the VAT Act . The VAT Act should contain a provision that allows bad debts to be claimed on cash sales made instead of total sales made. Contribution/value-add: This study harmonises South African VAT legislation with international best practices within the context of continual advancement of e-commerce transactions.
ABSTRACT
The covid-19 pandemic has since March 2020 led to declarations of several states of emergency, to shutting down of schools, restrictions on gatherings as well as many business activities, with the aim to stopping the spread and transfer of the virus. Apart from the program of compensation bonuses, program Antivirus, postponing of the electronic sales record and so on, the state has reacted to the situation through tax legislation. The presented paper defines some steps as a result of the pandemic that are connected to tax law, these being specifically real estate tax, road tax, value added tax and excise tax.
ABSTRACT
This study aims to estimate the consequences of a value-added tax (‘VAT’) rate increase on the profitability of the Kingdom of Saudi Arabia (‘KSA’) non-financial companies. Using statistical empirical approaches such as Ordinary Least Squares, Wilcoxon-signed-rank test and Difference-in-Differences, the analysis targets data before and after the VAT rate increase as well as the discovery of COVID-19. The findings support the hypothesis that after-VAT rate increase firms are, on average, less profitable. The imposed 10% VAT rate increase has caused, on average, a-2.16% decrease in profitability of Saudi firms. The results explore the notion that government debt negatively influenced firm profitability in 2020 which means that will affect Saudi companies' growth in the long term. This paper recommends implementing some VAT incentives in the tax system and conducting further studies on VAT incentives efficiency using data in the long term. © 2021, Australasian Tax Teachers' Association. All rights reserved.
ABSTRACT
On 3 June 2020, the German government announced a EUR 130 billion fiscal stimulus package to stimulate market demand and jumpstart the economy in the wake of the COVID-19 pandemic lockdown in the spring of 2020. The most prominent measure of this package is an unconventional fiscal policy in the form of a temporary VAT rates cut for six months, from 1 July to 31 December 2020. Employing a dynamic stochastic general equilibrium (DSGE) framework, we study the efficiency of the VAT tax rates cut for ameliorating the consequences of the pandemic recession. The simulation of the calibrated DSGE model yields a tax policy-induced real GDP increase of about 0.3% points for 2020.