Volume 4, Issue 1 April 2018
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Journal of Tax Administration Vol 4:1 2018 ISSN 2059-190X (Online) Volume 4, Issue 1 April 2018 CONTENTS ARTICLES WHAT ARE THE COSTS OF A NEW TAX ADMINISTRATION? THE CASE OF A PERSONAL INCOME TAX IN KUWAIT James Alm ............................................................................................................................................... 5 DO FIRMS REMIT AT LEAST 85% OF TAX EVERYWHERE? NEW EVIDENCE FROM INDIA Joel Slemrod and Tejaswi Velayudhan ................................................................................................. 24 PRACTICAL VALUATION OF RISK TRANSFER IN ADVANCE PRICING AGREEMENTS Zvika Afik and Yaron Lahav ................................................................................................................. 38 AN ALTERNATIVE PROPOSAL FOR VAT ON CONSUMPTION IN GREECE G. Kalliampakos and E. Kotzamani ..................................................................................................... 55 COMMENTARIES THE CASE FOR INTRODUCING INHERITANCE TAX IN INDIA Amarendu Nandy; Abhisek Sur and Santanu Kundu ............................................................................ 81 RE-USING TAXPAYER’S DATA: SCENARIOS FOR WEALTH MANAGEMENT FOR THE PUBLIC Eleonora Johanna Kuiper and Marijn Janssen .................................................................................... 88 REVIEWS A PRACTICAL GUIDE TO SETTING UP YOUR TAX EVASION GAME Antoine Malézieux ............................................................................................................................... 107 BOOK REVIEW: IOTA (2017). DISRUPTIVE BUSINESS MODELS: CHALLENGES AND OPPORTUNITIES FOR TAX ADMINISTRATION Edidiong Bassey .................................................................................................................................. 128 REVIEW OF RECENT LITERATURE John D’Attoma, Duccio Gamannossi degl’Innocenti, Shaun Grimshaw & Antoine Malézieux ......... 130 1 Journal of Tax Administration Vol 4:1 2018 Editorial Board EDITORIAL BOARD Managing Editors Nigar Hashimzade, Professor of Economics, Durham University. Lynne Oats, Professor of Taxation and Accounting, University of Exeter. Associate Editor John D’Attoma, Lecturer in International Politics and Business, University of Exeter. Editorial Advisory Panel Judith Freedman, Professor of Taxation Law, University of Oxford. Gareth Myles, Professor of Economics, University of Exeter. Joel Slemrod, Paul W. McCracken Collegiate Professor of Business Economics and Public Policy at the Ross School of Business, and Professor in the Department of Economics at the University of Michigan. Editorial Board James Alm, Professor of Economics, Tulane University. Richard M. Bird, Professor Emeritus, University of Toronto. Rebecca Boden, Professor of Critical Management, University of Roehampton. Valerie Braithwaite, Professor, Regulatory Institutions Network, Australian National University. Allison Christians, H. Heward Stikeman Chair in Tax Law, McGill University. David Duff, Professor, Peter A. Allard School of Law, University of British Columbia. Chris Evans, Professor of Taxation, University of New South Wales. Anne Fairpo, Barrister, Temple Tax Chambers. Rita de la Feria, Miguel Fonseca, Associate Professor of Economics, University of Exeter. Jane Frecknall-Hughes, Professor of Accounting and Taxation, University of Hull. Norman Gemmell, Professor of Public Finance, Victoria University of Wellington. Hans Gribnau, Professor of Law, University of Tilburg. John Hasseldine, Professor of Accounting, University of New Hampshire. Chris Heady, Professor of Economics, University of Kent. Kristin Hickman, Harlan Albert Rogers Professor of Law, University of Minnesota. Kevin Holland, Professor of Accounting and Taxation, University of Cardiff. Simon James, Associate Professor of Economics, University of Exeter. Erich Kirchler, Professor of Psychology, University of Vienna. Christos Kotsogiannis, Professor of Economics, University of Exeter. Emer Mulligan, Lecturer in Taxation, National University of Ireland, Galway. David Salter, Senior Associate Fellow, University of Warwick. Adrian Sawyer, Professor of Taxation, University of Canterbury, New Zealand. Peter Birch Sørensen, Professor of Economics, University of Copenhagen. Chantal Stebbings, Professor of Law and Legal History, University of Exeter. Penelope Tuck, Professor of Accounting, Public Finance and Policy, University of Birmingham. John Vella, Senior Research Fellow, Oxford Centre for Business Taxation. 2 Journal of Tax Administration Vol 4:1 2018 About the Journal ABOUT THE JOURNAL The Journal of Tax Administration is a peer-reviewed, open access journal concerned with all aspects of tax administration. Initiated in 2014, it is a joint venture between the University of Exeter and the Chartered Institute of Taxation. JOTA provides an interdisciplinary forum for research on all aspects of tax administration. Research in this area is currently widely dispersed across a range of outlets, making it difficult to keep abreast of. Tax administration can also be approached from a variety of perspectives including, but not limited to, accounting, economics, psychology, sociology and law. JOTA seeks to bring together these disparate perspectives within a single source to engender more nuanced debate about this significant aspect of socio-economic relations. Submissions are welcome from both researchers and practitioners on tax compliance, tax authority organisation and functioning, comparative tax administration and global developments. The editorial team welcomes a wide variety of methodological approaches, including analytical modelling, archival, experimental, survey, qualitative and descriptive approaches. Submitted papers are subjected to a rigorous blind peer review process. SUBMISSION OF PAPERS In preparing papers for submission to the journal, authors are requested to bear in mind the diverse readership, which includes academics from a wide range of disciplinary backgrounds, tax policy makers and administrators, and tax practitioners. Technical and methodological discussion should be tailored accordingly and lengthy mathematical derivations, if any, should be located in appendices. MESSAGE FROM THE CHARTERED INSITUTE OF TAXATION The Chartered Institute of Taxation is an education charity with a remit to advance public education in, and the promotion of, the study of the administration and practice of taxation. Although we are best known for the professional examinations for our members, we have also supported the academic study of taxation for many years and are pleased to widen that support with our involvement with this journal. WEBSITE The Journal of Tax Administration website can be found here: www.jota.website SOCIAL MEDIA We also have a Twitter account: https://twitter.com/jotajournal 3 Journal of Tax Administration Vol 4:1 2018 Editorial Note EDITORIAL NOTE We are pleased to present the first 2018 issue of the Journal of Tax Administration which once again contains a geographically dispersed and methodologically diverse set of papers. We are grateful to all contributors to this issue, both authors and reviewers. In this issue we present four research articles. In the first paper, James Alm presents a fascinating analysis of the costs of setting up a new tax administration in Kuwait. The second paper, by Joel Slemrod and Tejaswi Velayudhan, explores firm tax remittance in India, providing important evidence from a developing country that its remittance rates are very similar to those arising in OECD countries despite significant differences in the composition of tax revenue. The third paper, by Zvika Afik and Yaron Lahav, is concerned with transfer pricing, developing a model that sheds light on the costs of entering into advance pricing agreements. The fourth paper is by Kalliampkos and Kotzamani who examine the economic impact of variations in the rate of Value Added Tax in Greece. A new feature in this issue of JOTA is a Commentary section, which provides a space for both academic and non-academic writers to share their views on aspects of tax administration, without full peer review. In the first commentary, Amerandu Nandy and colleagues explore the potential for adopting an inheritance tax in India, observing that with advancement in technological capacity in tax administration such a move is more feasible than previously. The authors caution against assuming that the introduction of inheritance tax will be easy or even successful in reducing inequality in the absence of other measures. The second commentary by Eleanora Johanna Kuiper and Marjin Janssen provides insights into how tax related data can be harnessed for the benefit of taxpayers, and indeed society. They draw on the conceptual tools from wealth management to explore such an innovation. Finally, this issue contains several review pieces. Antoine Malézieux provides an extremely useful guide to tax evasion games, bringing together a wide range of studies to provide an overview of the design of experiments to better understand the phenomena. Edidong Bassey reviews a recently published book by the Intra-European Organisation of Tax Administrations entitled “Disruptive Business Models – Challenges and Opportunities for Tax Administrations. Finally, a group of scholars from the University of Exeter provide a review of recently published literature from a variety of sources. Lynne Oats & Nigar Hashimzade (Managing Editors) 4 Journal of Tax Administration Vol 4:1 2018 Cost of a new administration