This issue consists of six research papers. Robert W McGee in the paper, "Views
Toward Tax Evasion: A Comparative Study of Moldova and Romania", examines
how the populations of Moldova and Romania view tax evasion and
whether opinions vary based on demographics. This study uses data collected as part of a
much larger study on human beliefs and values. Respondents were asked whether
cheating on taxes would be justified if they had the opportunity to evade taxes. The study
examines the results by gender, age, level of education, and marital status of the populations
of Moldova and Romania. The sample size was 2012. The study found that
certain demographics made a difference, while other demographic factors did not, which
has implications for the public finance literature in general. Gender did not make a
significant difference in attitude towards tax evasion in either country; Romanians become
more opposed to tax evasion as they get older, but Moldovans in the age group of 30-49
are more opposed to tax evasion than the younger and older age groups; the most
educated people of Moldova are more opposed to tax evasion than the other two groups, but
the middle education group in Romania is less opposed to tax evasion than the lower
and upper education group; and married people oppose tax evasion more than the
single people do in both the countries. This study adds to the small body of literature
that compares attitudes toward tax evasion based on demographics.
The paper, "Corporate Financing and Tax Environment in India", by J
Dennis Rajakumar, analyzes the pattern of corporate financing, particularly the behavior
and composition of internal sources of funds. As firms' capacity to generate funds
internally are mostly affected by reserves and surplus, and depreciation provisions, this
paper identifies the corporation taxation policies and various tax relief measures provided
by the government. This paper examines the behavior and composition of internal
sources of funds for the period from 1956-57 to 2006-07. The study observes that external
sources of funds have become important over the years.
The paper, "A Greater Contribution from Consumption Taxes: An Avenue for
Québec to Explore", by Luc Godbout, Matthieu Arseneau and Suzie ST-Cerny, analyzes
the effect of a tax mix modification. The authors assess the relevance of
increasing consumption taxes and at the same time decreasing income taxes. Several
arguments in favor of modifying the tax mix are analyzed, such as its impacts on savings,
labor supply and tax compliance. The authors observe that Québec still relies more on
income taxes, compared to the OECD countries. In this context, if the Québec
government comes forward with a tax mix reform, the authors suggest that it should opt for
a moderate reform. They recommend the abolition of tax exemptions adopted on
particular goods and services, coupled with an increase in the tax credit to compensate for
the negative impact on the personal finances of poor taxpayers.
Himani Joshi Baxi in the paper, "Growth and Determinants of Non-Tax Revenue
of Indian States: A Panel Data Study", examines the performance of non-tax revenue
of Indian states. An effort is made to estimate the growth of non-tax revenue for 16
major Indian states over a period of 18 years. The paper also examines the determinants
of non-tax revenue using panel data analysis with Fixed Effect Model (FEM). Based on
the hypothesis that it is the socioeconomic activities of states that provide the base
for raising revenue, the paper tries to analyze how the states' own economic
development determines the performance of their own non-tax revenue. It concludes that the
difference in socioeconomic activities of individual states significantly influences the generation
of non-tax revenue of the state, as the state-specific intercepts are found to be
statistically significant for each state.
Mohammad Faridul Alam and Nikhil Chandra Shil in the paper,
"An Assessment of Non-Tax Revenue Sources in
Bangladesh", focuses on the study of non-tax
revenue performance in Bangladesh. The contribution of non-tax revenue has shown
substantial increase in terms of absolute amount over the period, 1997-98 to 2006-07.
Although, various reform initiatives have been taken to improve the tax performance, the
initiatives are highly insignificant in case of non-tax revenue. The authors observe that
non-tax revenue performance can significantly be improved through effective and efficient
policy measures, which may help the country to cope with the fiscal imbalance in
resource mobilization.
The paper, "Political Economy of Determining Own Tax Revenue and Selective
State Taxes of Andhra Pradesh, India", by Prasant Kumar
Panda, analyzes the political economy of determining own tax revenue and selective state taxes of Andhra
Pradesh (AP), India. The study suggests that the own tax revenue and revenue from
selective state taxes of AP are mainly determined by a set of economic and need-based
factors, rather than political factors. The political dummies like Congress government
dummy and election year dummy are insignificant in influencing the own tax revenue,
and other state taxes, except tax on vehicles. But in many cases the coefficients of
these political dummies are found to be negative, possibly signaling that the growth in
tax revenues is undermined by political power shift and
compromises.
-- C S Shylajan,
Consulting Editor
