Using an analytical frame informed by Michel Foucault's ideas of governmentality and disciplinary power, this article analyses the concept of the integrity of the tax system, as it is articulated in the Tax Administration Act 1994 (NZ) and interpreted by the New Zealand tax authorities. The article identifies deficiencies in the concept and its current interpretation, and suggests recasting it as a balance between equity and efficiency principles, and supporting it by a concept of an integrity duty, which is defined as a combination of the shared and individual responsibilities of all of the participants in the taxation process. It also suggests using this concept as a moral framework only, thereby transforming it into an effective governing tool.
This study investigates the impact of the Global Reporting Initiative's GRI 207: Tax 2019 standard on corporate tax transparency and tax behaviour, using Shell plc as a longitudinal case study from 2011 to 2023. It critically evaluates how GRI 207 interacts with the UK's existing disclosure frameworks, assesses whether it introduces new dimensions of transparency, and examines its influence on Shell's tax disclosure and tax aggressiveness. The study finds that GRI 207 largely complements the UK's existing tax disclosure requirements, particularly in strategy, governance, and stakeholder engagement, but diverges by advocating public country-by-country reporting, which Shell has not fully adopted. Further, tax disclosure volume increased significantly following the introduction of GRI 207; however, effective tax rates (ETRs) and adjusted ETRs declined, suggesting increased tax aggressiveness. The study concludes that GRI 207, as a voluntary and soft-law initiative, enhances public reporting, but its impact on corporate tax behaviour, particularly in Shell's case, appears limited.
Qatar is a resource-endowed country where the oil, gas, power, and transport sectors produce high levels of CO2 emissions. To diversify its economy and reduce CO2 emissions from these sectors to improve environmental sustainability, restructuring the current tax system is inevitable. Therefore, tax reform is needed, and it may also contribute to environmental policy through introducing carbon taxes. To be in harmony with other developed countries, the aim of this article is to present the role of carbon taxes towards environmental development and to assess the possible introduction of carbon taxes in Qatar. In doing so, an analysis of the strengths, weaknesses, opportunities, and threats (SWOT) was applied. The results of the analysis should serve as a basis for providing specific policy recommendations with regard to using carbon taxes to overcome environmental issues and to diversify government revenue.
This study investigates the association between country-level statutory tax rates and cost stickiness using a sample of listed firms from 35 Organisation for Economic Co-operation and Development (OECD) countries from 1988 to 2017. Using a modified model proposed by Banker and Byzalov (2014), we find that statutory tax rates are positively associated with cost stickiness. These results are consistent with managers considering tax savings when deciding whether to maintain or release committed resources to maximise firm value. Thus, this study provides new insights that may explain determinants of cost stickiness and interest policymakers regarding the efficacy of tax laws.
Using 72 Volunteer Income Tax Assistance (VITA) program participants, we collected pre-and post-test data to analyse the impact of the Tax Cuts and Jobs Act of 2017 (TCJA) tax code changes on taxpayer and vote perceptions. Pre-test data provided a baseline on participants' political views and beliefs of the tax system, while post-test data provided insights as to how the changed tax code and its potential benefits might have changed perceptions. Further, we analysed framing effects by randomly assigning participants to a treatment that either referred to the TCJA by name or referred to it as the 'Trump Tax Cuts'. Our data suggest that in the pre-test, subjects that identify as Republican have greater approval of the TCJA when it is framed as 'Trump Tax Cuts' as opposed to 'TCJA'. The framing had no impact on Democrats either in the pre-test or post-test survey data. For Independents the framing had no impact in the pre-test survey but once the impact of the tax law was revealed in the post-test survey, the evidence suggests that Independents who see the 'Trump Tax Cuts' found the Act significantly less favourably than Independents who saw the TCJA frame. Lastly, the data also supports the idea that the more someone benefits from the TCJA the more positively they see the Act.
Tax compliance costs represent an economic burden to society and can result in reduced tax compliance behaviour. Traditional techniques used to establish the determinants of tax compliance costs include, inter alia, regression and simple descriptive statistics. This article explains how a Chi-square automatic interaction detection (CHAID) analysis, a decision tree modelling technique, was used to analyse the tax compliance costs of 10,260 individual taxpayers in South Africa. CHAID analysis provided granular insights beyond traditional techniques to enable a better understanding of the determinants which could lead to targeted support to enhance taxpayer compliance and reduce government collection costs.
The concept of causality is central to the Balanced Scorecard (BSC) framework. However, empirical evidence supporting these hypothesised relationships is scarce, particularly in the context of tax administration. Drawing on the Indonesian tax administration strategy map, this study conducts a path analysis using comprehensive key performance indicator data from 319 small tax offices across the country. Two key findings emerge. First, while a majority of the linkages are positive, outreach and enforcement activities are the most significant drivers of tax compliance, highlighting the importance of close monitoring in tax administration. Second, the relationship between tax compliance and revenue collection is complex and inconclusive, indicating a need for refining strategic alignment within the BSC framework. These results offer important insights for policy-makers aiming to improve the design and implementation of performance-based management. They underscore the importance of adopting context-specific approaches that align institutional capacity and behavioural dynamics to strengthen compliance and support sustainable revenue mobilisation.
New Zealand's tax system has undergone significant reform during the last four decades, motivated by both domestic and international influences. From a domestic perspective, significant modernisation has ensured that it is 'fit for purpose' operationally. Alongside this focus, the foundational principles of equity, simplicity and efficiency have guided reforms. With an increasingly globalised and integrated world, New Zealand's tax system has needed to adjust to harmonise with standard international tax practices, and to deal with issues such as base erosion and profit shifting. Reforms have been gradual, interposed by significant developments in both structure and composition of taxes. Major contributions to the evolving tax system include 'Rogernomics' during the 1980s, along with significant administrative and dispute resolution reforms in the 1990s. Several major tax reviews were prominent in the 2000s and 2010s. More recently, the 2020s are highlighted by the successful completion of Inland Revenue's Business Transformation and handling the government's fiscal response to Covid19. In many respects New Zealand's tax reform has either led or followed developments in Australia. This should not come as a surprise given the close economic and social ties between the two countries. Thus, the aim of this article is to critically examine New Zealand's tax system over the last 40 years, focusing on significant changes in tax policy, tax law and tax administration.
Small and medium enterprise (SME) taxpayers globally were severely impacted by the Covid-19 pandemic. This study analyses self-assessed presumptive tax payment data from 319 Indonesian tax offices to estimate how SME taxpayers' capacity to submit self-assessed tax payments responsively changed during January 2016-February 2023. We predict the expected amount of self-assessed tax payments in 2020 without the presence of the pandemic (pre-pandemic) and in 2022 in the presence of the pandemic (post-pandemic). Our predictive analyses are then compared to actual tax payments during March 2020-February 2021 and March 2022-February 2023. This benchmark case analysis may assist 'lesson-drawing' by tax administrations in developing countries to inform tax policy responses under presumptive tax systems.
On 22 November 2023, the groundwork was laid for a new United Nations (UN) Tax Convention, paving the way for a shift in leadership in international tax policy away from the OECD and towards a democratised approach that would give developing nations a greater voice in addressing aggressive tax practices and profit shifting. The move will also likely lead to a greater emphasis on sustainable development goals, which have the largest impact on the Global South, where strategies are needed to improve health and education, reduce inequality, and spur economic growth. Concurrently, it is well documented that a significant form of revenue for developing nations is taxation. However, the collection is generally lower than in developed nations. Further, increasing revenue from the corporate income tax base is the most realistic approach to aid economic development through the tax system. Aggressive tax practices are one cause of low corporate tax revenue collection. This article considers the most common practices multinational entities (MNE) use to shift profits to low-or no-tax jurisdictions. Noting that transfer pricing is a fundamental source of profit shifting, the article discusses the benefits of an alternative model known as global formulary apportionment. In doing so, the advantages of its adoption for developing nations are discussed. The article then undertakes an empirical analysis using publicly available data contained in country-by-country reports to determine the effects of a formulary apportionment model on developing nations. The study specifically investigates the potential increases or decreases in revenue collected using different apportionment formulas. Data contained in publicly available country-by-country reports are relied upon to estimate the likely revenue effects of these different formulas. The article also demonstrates the likely simplification of such a model and its ability to stem aggressive tax practices such as transfer pricing and thin capitalisation. The article concludes that the UN Tax Convention should propose a global formulary apportionment model for the allocation of profits between jurisdictions. However, it cautions against the use of a formula that fails to adequately take into account the contributions to profits of MNEs that occur through genuine economic activity in developing countries.
This article examines a possible effect of de-globalisation and growing isolationism on countries' fiscal capacities by studying the relationship between international trade and tax performance. We address the endogeneity between trade and tax performance by instrumenting for trade openness with geographical determinants of bilateral trade through gravity model estimations. We find that trade openness has a positive causal effect on tax revenue as a percentage of GDP. Additionally, applying stochastic frontier analysis we find that trade openness positively influences tax efficiency. Our results suggest that the current retreat from global trade may have negative implications for countries' fiscal capacities, particularly for emerging markets where trade plays a crucial role in economic development.
This article is concerned with the question of whether an additional pillar dedicated to taxes should be added to the three pillars - environmental, social, governance - of the ESG framework. Reporting on tax matters, including environmental taxes (E), approach to tax (S) and tax strategy (G), can already be performed within the existing framework. However, the inclusion of a tax pillar can bring some distinct benefits. This is due to, first, the inadequacy of the current regulatory landscape on ESG reporting characterised by lack of standardisation and the peripheral role of tax, and second, the importance of taxes to achieve sustainable development. Corporate taxes are an important instrument for wealth redistribution and financing of public spending to support sustainability policies. Conversely, corporate tax avoidance is linked to wealth and income inequality both intra- and inter-nationally, with developing countries being more negatively impacted. A tax pillar will improve the uniformity in tax reporting and provide more clarity to all stakeholders. More importantly, it will reflect the expectation that companies should go beyond the tax law and encompass ethical aspects in their corporate tax behaviour. The article concludes with some observations on the intricacies of taxation that would need to be taken into account when designing this new pillar.
Taxes can be designed to fulfil a number of different objectives for society, which can result in both intended and unintended consequences. Three of the core functions of tax include raising revenue, redistribution, and the regulation of behaviour. This article explores how regulatory taxes - taxes designed to change behaviour - interact with the other functions of tax. This article ultimately argues that regulatory taxes prioritise regulation over revenue-raising and redistribution, which may introduce messaging about taxation more generally. It communicates that it is acceptable not to pay tax, creating a possibility for 'permissive tax avoidance' in an anti-tax avoidance era. It also brings elements of regressivity to atax system and communicates that it is those with the least who should pay to address environmental and societal harms.
The concepts of sustainability and taxation are increasingly associated with each other, and the question of sustainable taxation has never been more urgent. Sustainable taxation, which is still largely vague, carries the risk of moral subjectivity and threatens to influence policy-makers and taxpayers. This article performs a concept analysis to clarify the concept of sustainable taxation and its fundamental characteristics. Furthermore, this article highlights the interaction between tax policy and the Sustainable Development Goals (SDGs), distinguishing between indirect and direct implications. Indirectly, tax policy serves as a supportive mechanism to achieve the SDGs by promoting domestic resource mobilisation and financing sustainable development through tax revenues. On the other hand, direct support requires the design of tax laws with regulatory objectives in mind that go beyond mere revenue generation. Both these interactions represent two of the main objectives of taxation, revenue generation and behavioural regulation.
Advocates for greater social responsibility by corporations who support corporate social responsibility or environmental, social and governance standards accounting by large companies increasingly call for tax behaviour to be considered one indicator of desired social behaviour. This advocacy may be based on naivety or a failure to understand the basis of tax avoidance by multinational enterprises. The decision by developed nations to allocate profits of multinational enterprises on the basis of notional arm's length prices effectively endorses and invites companies to shift profits through transfer prices. Since the transactions in question would almost never take place between unrelated companies in a genuine arm's length environment, there can be no comparable for developing an arm's length price. As a result, the law effectively gives companies free rein to nominate arm's length prices that are inherently fictional given the absence of similar transactions outside multinational enterprises. It can be argued, therefore, that it is both unfair and counterproductive to judge companies poorly because they follow the law and accept the invitation inherent in the arm's length system to shift profits and avoid tax. If social responsibility advocates are concerned about tax avoidance by multinational enterprises, they should shift their attention from law-abiding companies to the legislatures and press for replacement of the system for allocating international profits to one that attributes profits to their actual sources based on objective indicators, not an allocation using fictional prices nominated by the companies shifting profits to low-tax jurisdictions.
Governments and businesses share the responsibility for sustainable development, the environmental, societal and economic aspects of which are expressed in Sustainable Development Goals (SDGs) and environmental, social and governance factors (ESG). Tax is fundamental to collaborative steps towards sustainability and should therefore be integrated into both public and corporate sustainability agendas. Corporate tax governance should reflect the organisation's purpose, values and principles geared towards its sustainability commitment. Sustainable tax is a boardroom responsibility. Companies committing to SDG and ESG objectives should build on CSR, which should inform sustainable corporate (tax) governance. This requires that the ethical obligation to go beyond (strict) compliance with the law be viewed as an obligation to pay a fair share of tax and be proactively transparent to enhance accountability to a wide set of stakeholders. Important challenges are the change of mindset needed to integrate tax into the ESG framework and the design of a (public transparency) benchmark which provides detailed tax data to enable a proper analysis of corporations' substantive tax performance.
The interaction of the tax system with business entities was an area of academic research for Professor C John Taylor, especially the tax treatment of companies and trusts, and the influence of the tax impost on these. This article reports a study of 48 advisors in the small and medium enterprise (SME) sector and explores the factors that may inhibit SMEs from structuring, as well as the techniques used to reduce these inhibitors. The results demonstrate that advisors perceive transfer costs of capital gains tax and stamp duty as major inhibitors, but they are able to use mechanisms to reduce them.
Customs duties were the first sustainable source of revenue for New South Wales, the colonies that hived off from it, and the other colonial settlements in Australia. From Sydney's original three-roomed customs house, with its wooden walls and bark roof, to the magnificent neo-renaissance palazzo of Melbourne, the neoclassical splendour of the Brisbane Customs House, to a Queen Anne confection in Albany, custom houses became symbols of the Australian colonies' growing economic power. Yet, unlike Anglophone Canada and New Zealand, which also engaged in practices of marginalising First Nations peoples and asserting exclusionary Britannic identities, the Australian colonies were parochial. They competed with one another for revenue and protected their own infant industries. Tariffs played an important role in establishing and maintaining this fractured nationalism; they were also instrumental in healing it. Federation was only made possible by the horse-trading over customs duties that is enshrined in the Australian Constitution. Professor John Taylor's tax history practice included extracting uniquely Australian stories from the grand narrative of international taxation. This article seeks to pay tribute to that approach and investigates custom houses at the time of fractured nationalism as a story which, on the one hand is part of the greater British-heritage narrative of indirect taxation and related architecture, but, on the other hand, is specifically Australian.
This article seeks to pay tribute to John Taylor's scholarship in the field of the history of Australian double taxation agreements (DTAs). Referencing Taylor's formidable body of research, the article adopts a thematic approach to outline the history of New Zealand's DTAs, including tax treaties with Australia.
Co-operatives are business entities owned by their members and governed democratically with a view to providing benefits for their members and communities. Not driven by the need to maximise short-term profitability, they tend to have a long-term view of business, serving both economic and social needs. With a legal regime that differs from that of commercial, capital-based companies and a philosophy and purpose that are socially focused and community based, the question arises: how are co-operatives taxed in Australia? This article exposes a regime that is fragmented, ambiguous, inconsistent and complex in its application. Tax policy will become increasingly important as co-operatives, as a business model, increase. This article was inspired by Emeritus Professor John Taylor's contribution to the literature on the taxation of business entities, including his work related to this topic.
