Afghan Tax law impact on Afghanistan economy
سال
: 2020.09.15ګروه ها
: اقتصادقیمت
: 1000تعداد صفات
: 42کد فایل
: 39مقطع
: لیسانسIntroduction:Taxation is one of the important elements in managing national income, especially in developed countries tax revenue is playing an important role in civilized societies since their birth thousands years ago. Tax is defined as a compulsory levy or payment, imposed by government or other tax raising body on income, expenditure, or capital assets, for which the taxpayer receives nothing specific in return, as directly, but they are enjoying some advantages as indirectly such as free health, free education, nation defense, infrastructure facilities, etc. Income tax was introduced very firstly in England (UK) in 1799. The last two decades have seen a general deterioration of income distribution in most countries around the world and even though the most recent data is not yet all available, all indications are that inequality has increased as a consequence of the 2008 world financial crisis and the follawing recession. And unlike earlier crises of a global scale, this most recent crisis may have a much more significant impact on the income distribution of OECD (Organization for Economic Cooperation and Development) countries (Immervoll and Richardson, 2011). A variety of economic factors, such as increased globalization, corruption and other institutional failures, or demographic trends have been used to attempt to explain the forces driving larger inequalities in market incomes. The main focus of this study is on the potential role that taxation policy plays in general in affecting income and profitability, positively or negatively, and to what extent changes in fiscal policies on the tax and expenditure sides of the budget around the world have contributed to slow down an ongoing deterioration of income distribution patterns or alternatively, they have been conducive to such deterioration. Over the last several decades there have been changes in the rates and structure of tax systems, as well as, important variation in the level and composition of public expenditures in both developed and developing countries. The current knowledge on how taxes, transfers and public expenditure programs may affect income distribution has significantly improved on a country by country basis, because of all the efforts that have been put in the tax and expenditure incidence literature. Much less research has been conducted on how changes in taxation policy and government profitability have actually impacted income distribution trends, especially in developing countries, Afghanistan included. However, some evidence indicates that fiscal policies do affect income distribution trends. For example, Caminada and Goudwaard (2001) found that in the United Kingdom and the Netherlands, reductions in government spending in social programs making the welfare systems in those countries less generous have been accompanied by sharp increases in income inequality, although the causality has not been proven. Similar powerful effects have been attributed to fiscal policies in developing countries, such in the cases of Indonesia (Keuning and Thorbecke, 1989) or Latin America (Ocampo, 1998). On the other hand, some other authors have found a weak correlation between changes in government spending and income inequality (Schuknecht and Tanzi, 2005; Arjona, Ladaique and Pearson, 2001) or have claimed a general ineffectiveness of tax law to affect income distribution (Harberger, 2006).
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Table of Contents
Title page
CHAPTER ONE 1
INTRODUCTION 1
1.1. Introduction 2
1.2. Problem statement 3
1.3. Objectives of the study 4
1.4. Limitations of the study 4
1.5. Scheme of the study 4
CHAPTER TWO 5
REVIEW OF THE LITERATURE 5
2.1. Review of the literature 6
2.2. Public spending and income distribution 7
2.3. The interaction of taxes and public spending in income distribution 10
2.4. Tax law in developing countries 11
2.5. Understanding tax law 13
2.6. Purpose of taxation 13
2.7. Economic growth 13
2.8. Stabilization 14
2.9. Distribution of income 14
2.9.1. Evaluation criteria 14
2.9.2. Equity 14
2.9.3. Neutrality 15
2.9.4. Simplicity and accessibility 15
2.10. Challenges faced by developing countries 15
2.10.1. Structure of developing countries 16
2.10.2. Tax administration and data 18
2.10.3. Political and social factors 20
CHAPTER THREE 21
RESEARCH METHODOLOGY 21
3.1. Research Methodology 22
3.2. Introduction 22
3.2.1. Data Sources 22
3.2.2. Research Design 22
3.3 Variables 22
3.6 Sample Size 23
CHAPTER FOUR 24
FINDING AND ANLYSIS 24
4.1. Effect of type of political regime on taxation rates 25
4.1.1. Defining political regimes 25
4.1.2. Debate over the effects of political regimes 26
4.2. Democracies tax more 27
4.3. Willingness and ability to impose maximum tax 29
4.4. Incentive for dictators to tax more 30
4.4.1. Differences in allocation of resources 30
4.4.2. Incentive to convert resources into private goals 31
4.4.3. Differences in allocation of resources 32
4.4.4. Incentive to convert resources into private goals 33
4.6. Ability of dictators to impose high taxes 34
4.6.1. Ability to convert taxes into private goods 35
4.6.2. Ability to pass unpopular taxation policies 35
CHAPTER FIVE 37
CONCLUSION AND RECOMMENDATIONS 37
5.1. Conclusion 38
5.2. Recommendations 40
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