DOCSLIB.ORG

Tax Systems and Tax Harmonisation in the East African Community (EAC)

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

U n i v e r s i tät Potsdam Finanzwissenschaftliche Diskussionsbeiträge Tax Systems and Tax Harmonisation in the East African Community (EAC) Hans-Georg Petersen (Ed.) Report for the GTZ and the General Secretariat of the EAC on Tax Harmonization and Regional Integration Diskussionsbeitrag 60 Potsdam 2010 Hans-Georg Petersen University of Potsdam and German Institute for Economic Research (DIW Berlin) E-mail: [email protected] Publisher: Prof. Dr. Hans-Georg Petersen University of Potsdam Faculty of Economics and Social Sciences Chair of Public Finance August-Bebel-Str. 89 D - 14482 Potsdam Homepage: http://lsfiwi.wiso.uni-potsdam.de/start/index.html Hans-Georg Petersen et al. Tax Systems and Tax Harmonisation in the East African Community (EAC) Report for the EAC/GTZ Program "Support to the EAC Integration Process" Januar 2010 Mit den Finanzwissenschaftlichen Diskussionsbeiträgen werden Manuskripte von den Verfassern möglichen Interessenten in einer vorläufigen Fassung zugänglich gemacht. Für Inhalt und Verteilung sind die Autoren verantwortlich. Es wird gebeten, sich mit Anregungen und Kritik direkt an sie zu wenden und etwaige Zitate aus ihrer Arbeit vorher mit ihnen abzustimmen. Alle Rechte liegen bei den Verfassern. ISSN 0948 - 7549 Tax Systems and Tax Harmonisation in the East African Community (EAC) by Hans-Georg Petersen (Ed.) University of Potsdam and DIW Berlin Abstract: In the first part of the report of the GTZ expert group an overview on the basics of integration and tax harmonisation within a common market is given. Chapter II. concentrates on the problems of national and international tax law regarding double taxation before the harmonisation process within the EU is described in detail. This process is not a best practice example but at least the experiences made in the course of the last five decades are interesting enough and might contribute important information for regions, which more or less recently have started a similar endeavour. The harmonisation needs are discussed for value added taxation (VAT), excise taxation, and income taxation. The problems of tax administrations, procedures laws, taxpayers’ rights and obligations as well as tax compliance are also taken into consideration. The second part of the study reviews the national tax systems within the EAC member countries. Be- fore the single taxes are described in more detail, the macroeconomic situation is illuminated by some basic figures and the current stand of the inner-community integration analysed. Then the single tax bases and tax rates are confronted to shed some light on the necessities for the development of a common market within the near future. Again the value added tax laws, excise taxes and income taxes are discussed in detail, while regarding the latter the focus is on company taxation. For a better sys- tematic analysis the national tax laws are confronted within an overview. The chapter is closed with a summary of the tax rates applied and a rough estimation of the tax burdens within the Partner States. The third part of this report contains the policy recommendations of the expert group following the same structures as the chapters before and presenting the results for the VAT, the excises and the corporate income tax (CIT). Additionally the requirements for tax procedures and administration as well as problems of transparency and information exchange are discussed in detail before the strate- gic recommendations are derived in close relation to the experiences made within the EU harmonisa- tion process. The recommendations are based on the following normative arguments: (1) Tax har- monisation is a basic requirement for economic integration. (2) Equality of taxation is an imperative of tax justice and demands the avoidance of double taxation as well as the combat of tax evasion and corruption. (3) The avoidance of harmful tax competition between the Partner States. (4) The strengthening of taxpayers’ rights in tax procedures. Hence, all kinds of income, goods and services should be taxed once and only once. Keywords: Centralization, decentralization, ethnic differences, fiscal federalism, fiscal planning, good governance, harmonization, integration, nation building, revenue sharing, sustainable fiscal policy, tax reform. Compliance, corruption, direct taxes, double taxation, East African Community, indirect taxes, informa- tion exchange, integration, international tax law, revenue authorities, tax administration, taxation, tax harmonization, tax system, transparency. JEL Codes: H2, H7, H83, F5, F15, N47, O2. Research Team: Team Leader: Prof. Dr. Hans-Georg Petersen, University of Potsdam Experts: Dr. Lothar Bublitz, Tax Authority Hamburg Biryungyi Cephas Kagyenda Theo Frank Munya Klaus Saalmann, Tax Authority North Rhine-Westphalia Dr. Siegfried Wismeth, Tax Authority Bavaria Project Officers EAC: Ally Alexander, EAC Secretariat Tharcisse Kadede, EAC Secretariat Robert Maate, EAC Secretariat Sector Economist GTZ: Dr. Birger Nerré, GTZ HQ, Eschborn Local Project Manager: Holger Seyfert, GTZ Arusha EAC/GTZ Program “Support to the EAC Integration Process” AICC Building, P.O. Box 13854, Arusha, Tanzania; T: +256.27.250 45 88 (dir); http://www.eacgermany.org; email: [email protected] COOPERATION EAST AFRICAN COMMUNITY FEDERAL REPUBLIC OF GERMANY Executive Summary In the first part of the report of the GTZ expert group an overview on the basics of integration and tax harmonisation within a common market is given. Chapter II. concentrates on the problems of national and international tax law regarding double taxation before the harmoni- sation process within the EU is described in detail. This process is not a best practice exam- ple but at least the experiences made in the course of the last five decades are interesting enough and might contribute important information for regions, which more or less recently have started a similar endeavour. The harmonisation needs are discussed for value added taxation (VAT), excise taxation, and income taxation. The problems of tax administrations, procedures laws, taxpayers’ rights and obligations as well as tax compliance are also taken into consideration. The second part of the study reviews the national tax systems within the EAC member coun- tries. Before the single taxes are described in more detail, the macroeconomic situation is illuminated by some basic figures and the current stand of the inner-community integration analysed. Then the single tax bases and tax rates are confronted to shed some light on the necessities for the development of a common market within the near future. Again the value added tax laws, excise taxes and income taxes are discussed in detail, while regarding the latter the focus is on company taxation. For a better systematic analysis the national tax laws are confronted within an overview, which is presented in the tables A3 to A5 in the appendix 4 of this report. The chapter is closed with a summary of the tax rates applied and a rough estimation of the tax burdens within the Partner States. The third part of this report contains the policy recommendations of the expert group follow- ing the same structures as the chapters before and presenting the results for the VAT, the excises and the corporate income tax (CIT). Additionally the requirements for tax procedures and administration as well as problems of transparency and information exchange are dis- cussed in detail before the strategic recommendations are derived in close relation to the experiences made within the EU harmonisation process. The recommendations are based on the following normative arguments: (1) Tax harmonisation is a basic requirement for eco- nomic integration. (2) Equality of taxation is an imperative of tax justice and demands the avoidance of double taxation as well as the combat of tax evasion and corruption. (3) The avoidance of harmful tax competition between the Partner States. (4) The strengthening of taxpayers’ rights in tax procedures. Hence, all kinds of income, goods and services should be taxed once and only once. Therefore, the expert group has made the following recommendations: 3 RECOMMENDATIONS VAT Systems Harmonisation 1. Develop a common EAC VAT Model. 2. Reduce zero-rated transactions to exports only. 3. Harmonise and reduce exempt transactions. 4. Maintain the border controls in a mid-term perspective. 5. Harmonise the tax bases. 6. Define the place of services in every detail (EU model). 7. Apply harmonised rules and practices for the VAT refunds. 8. Equalise the administration and the tax procedures in all Partner States. Excise Taxes Harmonisation 1. Develop a harmonised legal basis for excise taxation: • define the exclusive categories of taxable goods; • define the particular taxable items in a uniform way; • replace the ad valorem rates by specific rates; • define lower and upper ceilings for the national tax rates. 2. Determine the specific tax rates in the national excise tax laws. 3. Abolish discriminatory rates for imported goods. 4. Harmonise tax bases for levying excise taxes. 5. Harmonise excise tax rates. PIT and CIT Systems Harmonisation 1. Review and harmonise all tax incentive schemes in the CIT system, especially EPZs and SEZs. 2. Harmonise initial capital allowances of more than 50%. 3. Treat capital gains from asset sales as normal profit, but allow for inflation adjust- ment. 4. Harmonise the treatment of losses (carry forward) including foreign losses. 5. Harmonize the withholding taxes on dividends, interest payments, royalties and ser- vice
Recommended publications
  • Pressures for the Harmonization of Income Taxation Between Canada and the United States

    Pressures for the Harmonization of Income Taxation Between Canada and the United States

    This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Canada-U.S. Tax Comparisons Volume Author/Editor: John B. Shoven and John Whalley, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-75483-9 Volume URL: http://www.nber.org/books/shov92-1 Conference Date: July 26-27, 1990 Publication Date: January 1992 Chapter Title: Pressures for the Harmonization of Income Taxation between Canada and the United States Chapter Author: Robin Boadway, Neil Bruce Chapter URL: http://www.nber.org/chapters/c7478 Chapter pages in book: (p. 25 - 74) 1 Pressures for the Harmonization of Income Taxation between Canada and the United States Robin Boadway and Neil Bruce 1.1 Introduction: The Question of Tax Harmonization The determination of tax policy is among the most sovereign functions of governments. The choices to be made include of the level of tax revenues to be collected (and hence the level of public sector spending), the economic activities to be taxed (the tax bases and the tax mix), the distribution of the tax burden over different groups and income classes in the country, and the distri- bution of the tax revenues to different levels of government in the country. From an economic point of view, there are a number of criteria that might be used in formulating tax policy. These include minimizing the burden on the population of raising the given amount of revenue, minimizing the administra- tive costs of the tax system both to the government and to the taxpayers, achieving the desired amount of income redistribution, increasing the stability and predictability of the revenue base, and using tax policy as an instrument of industrial and regional policy.
  • Tax Competition and Tax Coordination in the European Union: a Survey

    Tax Competition and Tax Coordination in the European Union: a Survey

    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Keuschnigg, Christian; Loretz, Simon; Winner, Hannes Working Paper Tax competition and tax coordination in the European Union: A survey Working Papers in Economics and Finance, No. 2014-04 Provided in Cooperation with: Department of Social Sciences and Economics, University of Salzburg Suggested Citation: Keuschnigg, Christian; Loretz, Simon; Winner, Hannes (2014) : Tax competition and tax coordination in the European Union: A survey, Working Papers in Economics and Finance, No. 2014-04, University of Salzburg, Department of Social Sciences and Economics, Salzburg This Version is available at: http://hdl.handle.net/10419/122170 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu TAX COMPETITION AND TAX COORDINATION IN THE EUROPEAN UNION: A SURVEY CHRISTIAN KEUSCHNIGG, SIMON LORETZ AND HANNES WINNER WORKING PAPER NO.
  • European Tax Harmonization and the Implications for U.S Tax Policy Tracy A

    European Tax Harmonization and the Implications for U.S Tax Policy Tracy A

    Boston College International and Comparative Law Review Volume 19 | Issue 1 Article 3 12-1-1996 European Tax Harmonization and the Implications for U.S Tax Policy Tracy A. Kaye Follow this and additional works at: http://lawdigitalcommons.bc.edu/iclr Part of the Tax Law Commons Recommended Citation Tracy A. Kaye, European Tax Harmonization and the Implications for U.S Tax Policy, 19 B.C. Int'l & Comp. L. Rev. 109 (1996), http://lawdigitalcommons.bc.edu/iclr/vol19/iss1/3 This Article is brought to you for free and open access by the Law Journals at Digital Commons @ Boston College Law School. It has been accepted for inclusion in Boston College International and Comparative Law Review by an authorized editor of Digital Commons @ Boston College Law School. For more information, please contact [email protected]. European Tax Harmonization and the Implications for U.S. Tax Policy Tracy A. Kayi* I. EUROPEAN COMMUNITY TAX HARMONIZATION A. Introduction . .. 110 B. History of the European Economic Community . .......... 115 C. Formation of European Community Tax Legislation. .. 119 D. Enforcement of European Community Tax Legislation . ..... 125 E. Taxation in the Community . ......................... 129 II. DIRECT TAXATION ................................... 133 A. The Directives . .. 133 B. The Ruding Committee Report . ....................... 142 C. Future of Direct Tax Harmonization. .. 148 III. IMPLICATIONS OF EC DIRECT TAX HARMONIZATION ON U.S. TAX POLICY .................................... 150 A. Implications for Subpart F . .......................... 150 B. U.S. Tax Treaty Policy Implications . ................... 164 IV. CONCLUSION ....................................... 171 * Associate Professor of Law, Seton Hall University School of Law. B.S., University of Illinois, M.S.T., DePaul University, J.D., Georgetown University Law Center; formerly Tax Legislative Assistant to Senator John C.
  • Download This Publication

    Download This Publication

    Chr. Michelsen Institute Report Development Studies and Human Rights Taxation, aid and democracy Research Programme 2000-2003 Final Report March 2004 Odd-Helge Fjeldstad and Ole Therkildsen www.cmi.no Table of content INTRODUCTION.........................................................................................................................................................1 MAJOR FINDINGS ......................................................................................................................................................1 The politics of taxation........................................................................................................................................2 Taxation and accountability................................................................................................................................2 Reform of tax administration ..............................................................................................................................3 Local government taxation..................................................................................................................................3 Foreign aid and fiscal reforms............................................................................................................................4 CONTINUATION OF TAX RESEARCH...........................................................................................................................4 PUBLICATIONS AND OTHER FORMS OF RESEARCH DISSEMINATION ...........................................................................6
  • Annual Report 2018

    Annual Report 2018

    Annual Report www.cmi.no 1 • CMIS EXECUTIVE BOARD 2 • DIRECTOR’S INTRO Knowledge for global development and justice. Annual Report Contents 05 Director's intro 06 2018 Highlights 11 CMI Organisation 2018 HIGHLIGHTS 2018 12 Staff list 4 • 14 Board of Directors 2018 16 Publications 2018 22 Board of Directors' report 25 Financial Statements 36 Auditor’s Report 2018 Director's intro: Working on the greatest challenges of our time For almost 90 years, CMI has addressed real-world challenges by combining research excellence with a dedication to make new knowledge available for practical use. Our founder, the late Christian Michelsen, defined the institute’s over-arching purpose: to promote tolerance and mutual understanding Good teamwork is an important between nations and peoples. We success factor. I am also pleased humbly carry this mission forward by that we have defined bold ambitions devoting our time, talents and efforts for future development and growth. INTRO DIRECTOR’S to developing and communicating The first step in a comprehensive 5 • knowledge that addresses the huge recruitment process was recently global inequalities in human life completed, and we are happy to conditions. I am impressed by the work welcome several new colleagues in our staff have been doing in 2018. the near future. Our research output has been very 2018 starkly reminded us of the risks high and of excellent quality. The we face when working in countries success rate we had in the Research ridden by war and conflict. We are Council is probably the best ever. We immensely grateful that we have not also made important steps to further lost anyone.
  • Tax Competition, Tax Coordination and Tax Harmonization: the Effects of EMU

    Tax Competition, Tax Coordination and Tax Harmonization: the Effects of EMU

    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Genser, Bernd; Haufler, Andreas Working Paper Tax competition, tax coordination and tax harmonization: The effects of EMU Diskussionsbeiträge - Serie II, No. 283 Provided in Cooperation with: Department of Economics, University of Konstanz Suggested Citation: Genser, Bernd; Haufler, Andreas (1995) : Tax competition, tax coordination and tax harmonization: The effects of EMU, Diskussionsbeiträge - Serie II, No. 283, Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft, Konstanz This Version is available at: http://hdl.handle.net/10419/101612 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend
  • 2.2. Illicit Financial Flows in Different Contexts

    2.2. Illicit Financial Flows in Different Contexts

    Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Draining Development? from Developing Countries Developing from ofIllicitFunds Flows Controlling Peter Reuter Peter edited by DRAINING DEVELOPMENT? DRAINING DEVELOPMENT? Controlling Flows of Illicit Funds from Developing Countries Edited by PETER REUTER THE WORLD BANK © 2012 International Bank for Reconstruction and Development / International Development Association or The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org 1 2 3 4 15 14 13 12 This volume is a product of the staff of The World Bank with external contributions. The fi ndings, interpretations, and conclusions expressed in this volume do not necessarily re- fl ect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to the work is given. For permission to reproduce any part of this work for commercial purposes, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com.
  • Cross-Border Group-Taxation and Loss-Offset in the EU - an Analysis for CCCTB (Common Consolidated Corporate Tax Base) and ETAS (European Tax Allocation System)

    Cross-Border Group-Taxation and Loss-Offset in the EU - an Analysis for CCCTB (Common Consolidated Corporate Tax Base) and ETAS (European Tax Allocation System)

    arqus Arbeitskreis Quantitative Steuerlehre www.arqus.info Diskussionsbeitrag Nr. 66 Claudia Dahle Michaela Bäumer Cross-Border Group-Taxation and Loss-Offset in the EU - An Analysis for CCCTB (Common Consolidated Corporate Tax Base) and ETAS (European Tax Allocation System) - April 2009 arqus Diskussionsbeiträge zur Quantitativen Steuerlehre arqus Discussion Papers in Quantitative Tax Research ISSN 1861-8944 Cross-Border Group-Taxation and Loss-Offset in the EU - An Analysis for CCCTB (Common Consolidated Corporate Tax Base) and ETAS (European Tax Allocation System) - Abstract The European Commission proposed to replace the currently existing Separate Accounting by an EU-wide tax system based on a Common Consolidated Corporate Tax Base (CCCTB). Besides the CCCTB, there is an alternative tax reform proposal, the European Tax Allocation System (ETAS). In a dynamic capital budgeting model we analyze the impacts of selected loss-offset limitations currently existing in the EU under both concepts on corporate cross- border real investments of MNE. The analyses show that replacing Separate Accounting by either concept can lead to increasing profitability due to cross-border loss compensation. However, if the profitability increases, the study indicates that the main criteria of decisions on location are the tax rate divergences within the EU Member States. High tax rate differentials in the Member States imply significant redistribution of tax payments under CCCTB and ETAS. The results clarify that in both reform proposals tax payment reallocations occur in favor of the holding. National loss-offset limitations and minimum taxation concepts in tendency lose their impact on the profitability under both proposals. However, we found scenarios in which national minimum taxation can encroach upon the group level, although in our model the minimum taxation’s impacts seem to be slight.
  • Hakelberg Rixen End of Neoliberal Tax Policy

    Hakelberg Rixen End of Neoliberal Tax Policy

    Is Neoliberalism Still Spreading? The Impact of International Cooperation on Capital Taxation Lukas Hakelberg and Thomas Rixen Freie Universität Berlin Ihnestr. 22 14195 Berlin, Germany E.mail: [email protected] and [email protected] Postprint. Please cite as: Hakelberg, L. and T. Rixen (2020). "Is neoliberalism still spreading? The impact of international cooperation on capital taxation." Review of International Political Economy. https://doi.org/10.1080/09692290.2020.1752769 Acknowledgments Leo Ahrens, Fulya Apaydin, Frank Bandau, Benjamin Braun, Benjamin Faude, Valeska Gerstung, Leonard Geyer, Matthias vom Hau, Steffen Hurka, Friederike Kelle, Christoph Knill, Simon Linder, Daniel Mertens, Richard Murphy, Sol Picciotto, Nils Redeker, Max Schaub, Yves Steinebach, Alexandros Tokhi, Frank Borge Wietzke, Michael Zürn and other participants at the ECPR General Conference in Oslo 2017, the IBEI Research Seminar and Workshop ‘Pol- icy-Making in Hard Times’ in Barcelona in 2017, the Conference of the German Political Sci- ence Association’s (DVPW) Political Economy Section in Darmstadt 2018, the Tax Justice Network’s Annual Conference 2018 in Lima and the Global Governance Colloquium at the Social Science Research Center Berlin (WZB) in May 2019 as well as three anonymous re- viewers provided very helpful comments and suggestions. We thank all of them. Is Neoliberalism Still Spreading? The Impact of International Cooperation on Capital Taxation Abstract The downward trend in capital taxes since the 1980s has recently reversed for personal capital income. At the same time, it continued for corporate profits. Why have these tax rates diverged after a long period of parallel decline? We argue that the answer lies in different levels of change in the fights against tax evasion and tax avoidance.
  • T315 POLICY RESEARCH WORKING PAPER 13 85 Public Disclosure Authorized

    T315 POLICY RESEARCH WORKING PAPER 13 85 Public Disclosure Authorized

    _j_pS t315 POLICY RESEARCH WORKING PAPER 13 85 Public Disclosure Authorized Fiscal Federalism This paper presentseconomic principles and practical Dimensions of Tax Reform guidelines for the assignment in Developing Countries of revenueraising responsibilitiesamong Public Disclosure Authorized different levelsof government Robin Boadway for countrieswith morethan Sandra Roberts one levelof government.It Anwar Shah alsooutlines tax ~ n n s 9harmonizationand aSifg,t t ^Ut~ j coordinationstrategies to avoid inefficienciesand inequities arising from Public Disclosure Authorized decentralizationof revenue raisingauthority. Public Disclosure Authorized The World Bank PolicyResearch Departmnent Public EconomicsDivision November 1994 IPOLICY RESEARCH WORKING PAPER 1385 Summaryfindings Boadway, Roberts, and Shah propose four economic Thus progressive redistributive taxes, stabilization principles for use in deciding taxing responsibilities for instruments, and resource rent taxes would be suitable various levels of government. These are: for assignment to national government; while tolls on * Efficiency of the internal common market. For intermunicipal roads are suitably assigned to state efficiency in internal common market, taxes on mobile governments. Some resource taxes, such as royalties and factors and tradable goods should either be assigned to fees and severance taxes on production and/or output, the national government or coordinated among are designed to cover costs of local service provision and subnational governments. could be assigned to subnational governments. In * National equity. Progressive redistributive taxes addition, subnational governments could also impose ought to be assigned to the level of government having taxes to discourage local environmental degradation. In responsibility for redistribution, usually the national countries with a federal level VAT, it may be too government. Subnational governments could levy cumbersome to have subnational sales taxes.
  • Transfer Pricing Guidelines

    Transfer Pricing Guidelines

    TANZANIA REVENUE AUTHORITY TRANSFER PRICING GUIDELINES PREFACE The Transfer pricing guideline (hereinafter referred to as the guidelines) has been drafted as a practical guide and is not intended to be a prescriptive or an exhaustive discussion of every transfer pricing issue that might arise. Each transfer pricing arrangement case will be decided on its own factors and circumstances, taking into account the taxpayers’ business strategies and commercial judgment. These Guidelines will be periodically reviewed and revised on an ongoing basis. Page 0 of 39 Contents 1.0 INTRODUCTION ........................................................................................................ 1 2.0 OBJECTIVE OF THE GUIDELINES.......................................................................... 1 3.0 SCOPE ..................................................................................................................... 2 4.0 DEFINITIONS AND TERMINOLOGIES................................................................... 2 5.0 POSITION OF THE LAW ...................................................................................... 4 6.0 THE ARM’S LENGTH PRINCIPLE ...................................................................... 4 7.0 DETERMINATION OF ARM’S LENGTH PRICE .................................................... 5 8.0 COMPARABILITY ANALYSIS ................................................................................. 9 9.0 FACTORS DETERMINING COMPARABILITY .................................................... 10 10.0 ACCEPTABLE
  • Globalization, Tax Competition, and the Welfare State

    Globalization, Tax Competition, and the Welfare State

    POLITICSPHILIPP GENSCHEL & SOCIETY Globalization, Tax Competition, and the Welfare State PHILIPP GENSCHEL Does globalization undermine the fiscal basis of the welfare state? Some observers are not convinced. They claim that aggregate data on Organization for Economic Cooperation and Development countries show no drop in tax levels and conclude from this that tax competition is not a serious challenge for the welfare state. This conclusion is unwarranted. The article shows that tax competition systematically constrains national tax autonomy in a serious way. It prevents governments from raising taxes in response to rising spending requirements and from detaxing labor in response to growing unemployment. 1. THE CONVENTIONAL WISDOM AND ITS CRITICS During the 1990s, there was a lot of concern in Europe that globalization would undermine the fiscal basis of the welfare state. Newspapers were full of dire warn- ings from policy makers who saw the coming of “cut throat tax competition”1 and bemoaned the loss of “billions of Euro” to unfair tax poaching.2 G-7 summits, the European Commission, and the Organization for Economic Cooperation and Development (OECD) issued alarmist reports on “harmful tax competition.”3 Scholars warned of “beggar-thy-neighbor policies”4 and an impending “race to the bottom” that would force “down the share of total government revenue gener- ated by taxes on business and capital income.”5 “In equilibrium, the tax rate on An earlier version of this article was presented at the American Political Science Association’s Annual Meeting in Washington, D.C., 31 August-3 September 2000. The article grew out of a joint project with Steffen Ganghof.