Advances in Taxation Research

Tax Policies and Economic Growth: A Comparative Review

Mellisyah Mellisyah — Thu, 30 Jan 2025 00:00:00 +0000

Purpose: This study examines the impact of various tax policies on economic growth through a comparative analysis of different taxation models, including progressive, regressive, and corporate tax structures. It aims to identify best practices in tax policy design that balance revenue generation, investment stimulation, and economic equity while addressing emerging challenges such as digital taxation and environmental tax policies.

Research Design and Methodology: The study employs a systematic literature review (SLR) methodology, synthesizing existing empirical and theoretical research from peer-reviewed journals, policy reports, and economic analyses. The review focuses on comparative assessments of taxation policies across developed and developing economies, evaluating their role in fostering fiscal stability and economic expansion.

Findings and Discussion: The findings indicate that progressive tax structures contribute to income redistribution but may discourage investment if tax rates are excessively high. In contrast, regressive tax policies ensure stable revenue flows but disproportionately impact low-income groups. Corporate taxation influences foreign direct investment (FDI) and business competitiveness, requiring a balanced approach between fostering economic activity and ensuring adequate government revenue. The study also highlights gaps in digital taxation and environmental tax implementation, emphasizing the need for global cooperation and regulatory alignment to enhance tax efficiency.

Implications: The study provides strategic recommendations for policymakers to develop adaptive, data-driven tax policies that promote sustainable economic growth. It underscores the importance of fiscal transparency, digital tax administration, and well-structured tax incentives to enhance compliance and prevent tax evasion. Future research should focus on empirical analyses of taxation's long-term effects on economic development and the role of digital transformation in tax governance.

Comparative Analysis of Public Perceptions of Tax Justice and Public Responses to Changes in the Tax System

Tri Eka Saputra, Rahmat Eko Prabowo — Fri, 31 Jan 2025 00:00:00 +0000

Purpose: This study examines public perceptions of tax justice and responses to systemic tax reforms, particularly in the context of digitalization and reform-driven economies like Indonesia. It investigates how distributive and procedural fairness, financial literacy, and socio-economic dynamics shape trust, compliance, and acceptance of tax policies.

Research Design and Methodology: The study employs a qualitative approach, using a Systematic Literature Review (SLR) to synthesize insights from recent theoretical and empirical studies. Integrating key findings from interdisciplinary research explores the relationship between tax justice perceptions, digitalization, financial literacy, and public trust in tax reforms.

Findings and Discussion: The study reveals that perceptions of tax fairness significantly influence public trust and compliance. Distributive justice ensures equitable tax burdens aligned with economic capacity, while procedural justice emphasizes transparency and inclusive in policy implementation. Financial literacy moderates the relationship between perceived fairness and voluntary compliance, enhancing public understanding of taxation benefits. Digitalization offers efficiency but presents challenges of inclusivity, particularly for marginalized groups. The findings highlight the importance of tailoring reforms to socio-economic and cultural contexts to foster trust and acceptance.

Implications: The study underscores the need for transparent, equitable, and inclusive tax policies. Policymakers should prioritize public education on financial literacy, ensure equitable digital tax systems, and promote participatory governance in tax reform processes. These measures will enhance compliance, strengthen public trust, and promote sustainable economic development. Future research should empirically validate these relationships and explore cross-country comparisons to deepen understanding of taxation dynamics.

Digital Taxes on Global Tech Companies and Interstate Tensions in the Digital Economy

Andi Nurwanah — Fri, 31 Jan 2025 00:00:00 +0000

Purpose: This study examines the impact of Digital Services Taxes (DSTs) on multinational tech companies and explores the geopolitical tensions arising from fragmented digital tax policies. It aims to assess how DSTs influence corporate strategies and contribute to regulatory and economic challenges in the global digital economy.

Research Design and Methodology: A qualitative systematic literature review (SLR) was employed to analyze secondary data from peer-reviewed articles, policy documents, and international frameworks. The study integrates corporate strategy, international relations, and tax governance perspectives to understand DSTs' complexities comprehensively.

Findings and Discussion: The findings reveal that DSTs significantly affect investment allocation, operational efficiency, and pricing strategies of multinational tech firms. Increased compliance costs and risks of double taxation challenge profitability and global competitiveness. Geopolitical tensions between countries implementing DSTs and those opposing them highlight the need for collaborative international tax reforms. The OECD’s Two-Pillar Plan emerges as a critical framework to address regulatory fragmentation and foster fiscal equity. The discussion underscores the role of stakeholder theory in bridging conflicting interests among governments, corporations, and societies to create sustainable solutions for digital taxation.

Implications: This study highlights the importance of multilateral approaches to digital taxation and collaboration between policymakers and tech companies. Practical implications include developing transparent and inclusive tax frameworks that support innovation and global economic stability. For managers, adopting proactive compliance strategies and engaging in policy reforms are essential to navigate the challenges DSTs pose.

Tax Policy on the Growth and Competitiveness of SMEs in the National Economy Sector

Maria Anastasia — Fri, 31 Jan 2025 00:00:00 +0000

Purpose: This study examines the impact of tax policies on the growth and competitiveness of SMEs within the national economy. It aims to identify how well-structured tax frameworks, including incentives and simplified systems, can support SME performance and adaptation in an increasingly digital and globalized environment.

Research Design and Methodology: Using a qualitative approach, this study employs a Systematic Literature Review (SLR) methodology to synthesize and critically analyze existing research on SME tax policy. Agency theory is the lens through which to explore the alignment between tax policy design and SME compliance and growth dynamics.

Findings and Discussion: The findings reveal that well-designed tax policies significantly contribute to SME growth by fostering investment capacity, promoting innovation, and reducing administrative burdens. Simplified tax systems and digital tax platforms enhance operational efficiency and competitiveness, enabling SMEs to navigate domestic and international markets more effectively. However, challenges such as information asymmetry, limited resource access, and bureaucratic inefficiencies remain significant barriers. The study highlights the need for adaptive and inclusive tax policies that align with SMEs' unique operational realities, emphasizing the dual role of tax systems as enablers of growth and compliance mechanisms.

Implications: This research provides actionable insights for policymakers to design effective tax frameworks that support SME growth while fostering compliance. It offers practitioners managerial guidance on leveraging tax incentives and navigating regulatory systems. By addressing the challenges identified, this study contributes to sustainable economic development by empowering SMEs to thrive in competitive markets.

Effectiveness of Tax Incentives in Increasing Investment in Green Technology and Green Energy

Jhony Fahrin Sapar, Eka Raya Hadi Kusuma — Fri, 31 Jan 2025 00:00:00 +0000

Purpose: This study evaluates the effectiveness of tax incentives in promoting investments in green technology and renewable energy. It aims to explore how fiscal policies influence corporate investment behaviors, identify factors contributing to their success or limitations, and assess their role in supporting global sustainability objectives.

Research Design and Methodology: The research adopts a systematic literature review (SLR) approach to synthesize evidence from diverse contexts and methodologies. By analyzing academic studies and reports published after 2015, the study identifies patterns, challenges, and opportunities related to the design, implementation, and outcomes of tax incentives in green investments. The analysis integrates both quantitative and qualitative dimensions to provide a comprehensive perspective.

Findings and Discussion: The findings reveal that tax incentives significantly reduce financial barriers, fostering investments in renewable energy and green technologies. However, their effectiveness depends on well-structured designs tailored to industry needs, efficient administrative processes, and integration with other sustainability policies. The discussion highlights the short-term and long-term impacts of tax incentives, including increased green innovation, capacity expansion in renewable energy, and contributions to Sustainable Development Goals (SDGs). Challenges such as administrative complexity and limited awareness among businesses, especially SMEs, have also been identified.

Implications: This study offers practical and managerial insights for policymakers and stakeholders, emphasizing the need for simplified procedures, enhanced awareness, and coordinated policies. By addressing gaps in current practices, the study contributes to the design of more effective fiscal measures for accelerating sustainable investments and achieving global environmental goals.