This document summarizes a research paper that examines the relationship between taxation, private fixed domestic investment, and economic growth in Zimbabwe from 1998 to 2015. The paper finds that taxation revenue channeled towards productive public expenditures like infrastructure can stimulate private investment. However, Zimbabwe's high taxes have discouraged savings and investment, despite evidence that taxes can be efficient and equitable when properly implemented. The primary challenge for policymakers is devising tax rules that lower evasion and corruption while adequately protecting the tax base and lessening the burden on firms.
Tax expenditure in sub saharan africa the nigerian experience.Alexander Decker
This document summarizes a research paper on tax expenditures in Nigeria. It discusses how the Nigerian government uses tax incentives and concessions to achieve economic goals, but this results in significant losses of potential tax revenue. Between 2004-2006, revenue losses from various tax exemptions and concessions totaled over N54 billion, N71 billion, and N56 billion respectively. The document examines how tax expenditures are less transparent than direct spending and can undermine fiscal accountability if not properly integrated into budgeting processes. It analyzes the effects of tax expenditures on Nigeria's budget and the economy.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Macroeconomic; Government Expenditure (Comic)Adynn Khairil
The Federal government of Malaysia is projected to record a lower fiscal deficit of 4% of GDP in 2013. Total government revenue is expected to reach RM208.7 billion, with tax revenue at RM159.2 billion. Non-tax revenue is projected to be RM49.5 billion, a 9.6% reduction due to lower returns from investments, petroleum royalties, and the Malaysia-Thailand Joint Authority. Government expenditure consists of operating expenditure, which covers administrative costs, and development expenditure for infrastructure investment to boost economic growth.
An investigation of the effect of vat on revenue profiles of south western ni...Alexander Decker
This document summarizes a study that examined the effect of Value Added Tax (VAT) on the revenue profiles of state governments in Southwestern Nigeria from 2002 to 2011. The study used secondary data from approved budgets of five states. Panel regression analysis found that VAT had a positive and significant relationship with state revenues. The study concluded that increasing consumption through poverty alleviation could increase VAT revenues for states by boosting the goods and services subject to VAT.
Slides from the Nevin Economic Research Institute's post Budget seminar. Speakers Michelle Murphy (Social Justice Ireland), Cormac Staunton (TASC) and Michael Taft (UNITE)
The document discusses fiscal policy and taxation systems. It provides information on group members working on the topic of fiscal policy for development. It then defines fiscal policy and its objectives, such as employment expansion and economic growth. The document also distinguishes between direct and indirect taxes and provides tax revenue statistics for different country groups. It notes problems that developing countries face and factors that influence a country's taxation potential. Finally, it provides brief descriptions of different types of taxes, such as personal income tax, property tax, and corporate income tax.
This document discusses tax reforms in Kenya that were recommended by the IMF to increase tax revenue. It finds that while trade liberalization increased tax revenues from imports in the short term, domestic tax reforms like VAT and income taxes have not increased revenue as much as hoped due to structural economic limitations. Further trade liberalization proposed by the IMF risks reducing tax revenues, which could undermine development programs given constraints on expanding domestic taxation. The document argues Kenya should maintain some tariffs in the short term to fund expanding the tax base long term through projects like increasing wages.
Analyzing the impact of value added tax (vat) on economic growth in nigeriaAlexander Decker
This document summarizes a study that analyzes the impact of value added tax (VAT) on economic growth in Nigeria from 1994 to 2010 using vector autoregression (VAR) modeling. The study uses quarterly time series data for GDP, VAT revenues, and oil revenues. Unit root tests show the variables contain unit roots and are non-stationary in levels but stationary in first differences. The VAR model is then estimated in levels to capture dynamic relationships between the variables. Impulse response functions and forecast error variance decompositions from the VAR imply that VAT has a positive impact on economic growth in Nigeria, accounting for about 50% of variations in real economic activity over time. The study concludes that Nigeria should continue implementing VAT policies to help
Tax expenditure in sub saharan africa the nigerian experience.Alexander Decker
This document summarizes a research paper on tax expenditures in Nigeria. It discusses how the Nigerian government uses tax incentives and concessions to achieve economic goals, but this results in significant losses of potential tax revenue. Between 2004-2006, revenue losses from various tax exemptions and concessions totaled over N54 billion, N71 billion, and N56 billion respectively. The document examines how tax expenditures are less transparent than direct spending and can undermine fiscal accountability if not properly integrated into budgeting processes. It analyzes the effects of tax expenditures on Nigeria's budget and the economy.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Macroeconomic; Government Expenditure (Comic)Adynn Khairil
The Federal government of Malaysia is projected to record a lower fiscal deficit of 4% of GDP in 2013. Total government revenue is expected to reach RM208.7 billion, with tax revenue at RM159.2 billion. Non-tax revenue is projected to be RM49.5 billion, a 9.6% reduction due to lower returns from investments, petroleum royalties, and the Malaysia-Thailand Joint Authority. Government expenditure consists of operating expenditure, which covers administrative costs, and development expenditure for infrastructure investment to boost economic growth.
An investigation of the effect of vat on revenue profiles of south western ni...Alexander Decker
This document summarizes a study that examined the effect of Value Added Tax (VAT) on the revenue profiles of state governments in Southwestern Nigeria from 2002 to 2011. The study used secondary data from approved budgets of five states. Panel regression analysis found that VAT had a positive and significant relationship with state revenues. The study concluded that increasing consumption through poverty alleviation could increase VAT revenues for states by boosting the goods and services subject to VAT.
Slides from the Nevin Economic Research Institute's post Budget seminar. Speakers Michelle Murphy (Social Justice Ireland), Cormac Staunton (TASC) and Michael Taft (UNITE)
The document discusses fiscal policy and taxation systems. It provides information on group members working on the topic of fiscal policy for development. It then defines fiscal policy and its objectives, such as employment expansion and economic growth. The document also distinguishes between direct and indirect taxes and provides tax revenue statistics for different country groups. It notes problems that developing countries face and factors that influence a country's taxation potential. Finally, it provides brief descriptions of different types of taxes, such as personal income tax, property tax, and corporate income tax.
This document discusses tax reforms in Kenya that were recommended by the IMF to increase tax revenue. It finds that while trade liberalization increased tax revenues from imports in the short term, domestic tax reforms like VAT and income taxes have not increased revenue as much as hoped due to structural economic limitations. Further trade liberalization proposed by the IMF risks reducing tax revenues, which could undermine development programs given constraints on expanding domestic taxation. The document argues Kenya should maintain some tariffs in the short term to fund expanding the tax base long term through projects like increasing wages.
Analyzing the impact of value added tax (vat) on economic growth in nigeriaAlexander Decker
This document summarizes a study that analyzes the impact of value added tax (VAT) on economic growth in Nigeria from 1994 to 2010 using vector autoregression (VAR) modeling. The study uses quarterly time series data for GDP, VAT revenues, and oil revenues. Unit root tests show the variables contain unit roots and are non-stationary in levels but stationary in first differences. The VAR model is then estimated in levels to capture dynamic relationships between the variables. Impulse response functions and forecast error variance decompositions from the VAR imply that VAT has a positive impact on economic growth in Nigeria, accounting for about 50% of variations in real economic activity over time. The study concludes that Nigeria should continue implementing VAT policies to help
Fiscal policy involves a government adjusting spending levels and tax rates to influence the economy. It can use expansionary policy like tax cuts or increased spending to boost aggregate demand, or contractionary policy like tax increases or spending cuts to reduce inflation. Pakistan faces challenges like tax evasion, a large underground economy, weak fiscal-monetary coordination, and corruption. To address issues, the document recommends increasing the tax-to-GDP ratio by broadening the tax base and rationalizing rates, reducing untargeted subsidies, taxing the agricultural sector, and implementing austerity measures.
Fiscal policy refers to a government's spending and tax policies to influence macroeconomic conditions. The document discusses different aspects of fiscal policy including:
- Countercyclical fiscal policy aims to stabilize the economy by increasing government spending and reducing taxes during recessions, and reducing spending and raising taxes during expansions.
- Discretionary fiscal policy is used purposefully by governments to achieve macroeconomic goals like reducing inflation or boosting growth. Tools include changing spending, taxes, and borrowing.
- Non-discretionary or automatic fiscal policy relies on built-in stabilizers like income taxes that automatically influence demand over the business cycle.
- Large fiscal deficits can adversely impact growth by reducing funds for
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Tax and participatory development models _ JenaChidananda Jena
This document discusses taxation models and participatory development models. It provides background on issues with taxation such as complexity, exemptions, and tax avoidance tactics. It then discusses strategies for more efficient, equitable and effective tax policy including removing loopholes, broadening the tax base, implementing anti-avoidance rules, and reviewing tax treaties. The document also discusses principles of taxation, consumption taxes, and forms and variations of participatory development.
Tax system in nigeria – challenges and the way forwardAlexander Decker
This document discusses challenges facing Nigeria's tax system. It outlines several key challenges: lack of statistical tax data, inability to prioritize tax efforts, poor tax administration due to understaffing and lack of training, and multiplicity of taxes. The document examines these challenges in more detail and argues that addressing these issues is important for establishing an efficient and effective tax regime in Nigeria.
Lado Gurgenidze, former Prime Minister of Georgia, discusses key economic reforms that transformed Georgia since the Rose Revolution in 2003. These include lowering taxes to a flat rate, targeting inflation, removing import tariffs and simplifying business regulations. As a result, Georgia experienced high GDP growth, declining debt, and became one of the freest economies in the world. Gurgenidze argues the sustainability of reforms that are pervasive, permanent, quantifiable and affect citizens' daily lives, such as low flat taxes and ease of business. Reforms at risk of being reversed are niche, complex and non-quantifiable.
Fiscal policy deals with the government's budgeting of revenues and expenditures. It aims to promote economic growth and development through public projects and welfare programs. Public finance concerns the income and spending of public authorities and aims to balance the two. Taxes are a compulsory contribution imposed on citizens in return for which no direct benefit is provided. The key canons of taxation are equity, certainty, convenience, and minimizing costs. Direct taxes are paid directly by taxpayers while indirect taxes may be passed on to consumers. Fiscal policy uses government spending and tax programs to influence aggregate output, employment and prices in the economy.
This document defines key terms related to fiscal policy such as bond yield, budget deficit, cyclical fiscal deficit, direct and indirect taxation, national debt, and structural fiscal deficit. It then discusses what fiscal policy is, how it involves taxation, spending, and borrowing to affect aggregate demand. Changes to fiscal policy can impact both aggregate demand and supply. The document also provides breakdowns of UK government spending and revenues, and discusses different types of taxes and their progressiveness.
This document provides an overview of China, covering political, economic, and sociocultural factors. Politically, China is ruled by the Communist Party and has a decentralized system with limited democratic processes. Economically, China has experienced rapid growth with an average 10% GDP increase for 30 years, making it the world's second largest economy. Socioculturally, China has a large and growing population that is becoming more urbanized and educated, with rising incomes and consumption.
- The document discusses Indonesia's economic and fiscal updates under President Joko Widodo's 2019-2024 vision of improving connectivity and infrastructure. Key points include GDP growth slowing to a 2-year low of 5.05% in Q2 2019 due to weaker investment. Exports fell while imports declined faster, helping GDP. The US-China trade war has boosted Vietnam's economy but widened Indonesia's trade deficit. Solutions proposed include improving competitiveness, workforce skills, and commodity value-addition. The DGT outlines new tax regulations like tax holidays and super deductions to promote investment and employment.
An Assessment of revenue generation drive of Lagos state government through e...Jeremy Williams
Effective taxation is critical for generating government revenue but many nations struggle with administration and compliance issues. In Lagos State, low oil prices reduced funds, increasing the urgency of boosting internally generated revenue. This study examines how Lagos State improved tax administration and the impact on revenue, citizens, and development. It analyzes the state's efforts to transform its revenue base and infrastructure for its growing population through more efficient revenue collection.
Effect of vat and tax on economy an analysis in the context of bangladesh.Alexander Decker
This document summarizes a research paper on the effects of taxes and VAT on the economy of Bangladesh. It provides background on VAT and how it has replaced sales taxes in Bangladesh. It discusses the country's current tax policies, including income tax rates that are progressive up to 25% and a uniform 15% VAT rate. It analyzes how the tax system affects people in Bangladesh, noting the heavy reliance on indirect taxes results in a small number of taxpayers shouldering the burden. The narrow tax base and exemptions are also issues. In conclusion, broadening the tax base is desirable but agricultural income exemptions need reconsideration given many affluent people claim agricultural income to avoid taxes.
Fiscal policy involves government spending, taxation, and borrowing to influence economic activity. There are three main views on fiscal policy: Keynesian, New Classical, and Supply-Side. Keynesians support using deficits during recessions and surpluses during booms. New Classical economists argue deficits only affect tax timing. Supply-Siders emphasize reducing marginal tax rates to boost labor and investment. Automatic stabilizers and difficulties with proper timing make discretionary policy challenging with both benefits and risks.
FACTORS AFFECTING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN KITALE...paperpublications3
Abstract:This study seeks to establish factors affecting tax compliance by Small and Medium Enterprises, with special emphasis on Income Tax and Value Added Tax and their effects on government revenue. Tax compliance level which is internal factor affecting tax revenue not only undermines tax administration infrastructure but also makes the tax base narrow and inequitable. The objectives of the study include establishing the influence of compliance cost, fines and penalties and attitudes of tax compliance among Small and Medium Enterprises. The study adopts a descriptive research design involving both qualitative and quantitative research methodology. The target population was 200, out of which a sample size of 132 respondents were drawn, using stratified and simple random sampling. Questionnaires were used to collect primary data from the respondents, which were analyzed using SPSS applying both descriptive and inferential analysis. There was a positive relationship between the tax and compliance cost (r=.514), fines and penalties (r=.415) attitudes (r=.546) and tax compliance. The findings showed that compliance cost, fines and penalties and attitude had significant relationship with tax compliance. It is recommended that the tax system should provide a clear and simple guideline on how to fill tax returns but also enhance taxpayer education services to enable the taxpayers understand their rights and obligations as taxpayers, there should be moderate levels of fines and taxes so that SMEs are encouraged to comply since they will keep accurate records for taxation purposes in order to avoid fines and penalties.
Keywords: Direct tax, Indirect tax, Medium enterprise, Productive expenditure, tax evasion, tax impact.
The document discusses taxation in Pakistan and its importance for development. It notes that Pakistan faces obstacles to tax administration like weak capacity and inefficient collection. Properly organized tax systems are now accepted as engines of development. Both direct and indirect taxes are essential for bringing revenue to the state to fund public expenditures and promote economic growth, employment, and stability. However, in developing countries like Pakistan, direct taxation has limited scope so indirect taxation plays a more significant role.
Germany has the fifth largest economy in the world and is a key member of the European Union. It has a population of over 80 million people and Berlin is the largest city. While Germany has a highly skilled workforce and is the fourth largest exporter in the world, it faces challenges around environmental taxes, female labor participation, and reducing protections between regular and non-regular workers. Currently the German economy is performing well with record low unemployment, though it depends on the strength of the wider Eurozone.
Presentation on Sources Of Revenue For GovernmentShubham Saraf
The government collects revenue from various tax and non-tax sources. Tax revenue includes items like income tax of Rs. 1,72,026 crores, corporation tax of Rs. 359,990 crores, and service tax of Rs. 82,000 crores. Non-tax revenue consists of items such as interest receipts, dividends, grants, and income from public enterprises totaling Rs. 125,435 crores. Capital receipts include borrowings, recoveries of loans, and small savings deposits totaling over Rs. 500,000 crores in 2011-12.
Here are the steps to calculate the level of GDP using the data provided:
Consumption (C) = £800bn
Government spending (G) = £300bn
Gross capital formation (I) = £250bn
Exports (X) = £400bn
Imports (M) = £350bn
Using the expenditure method formula:
GDP = C + I + G + (X - M)
= £800bn + £250bn + £300bn + (£400bn - £350bn)
= £800bn + £250bn + £300bn + £50bn
= £1400bn
Therefore, the level of GDP using the data provided
This document discusses the relationship between tax structure and economic growth. It presents findings that:
1) High corporate tax rates are negatively correlated with economic growth, as they can discourage investment and innovation. A 10% decrease in corporate tax rates is associated with a 0.64% increase in annual GDP growth.
2) Personal income tax rates do not seem to significantly impact economic growth.
3) Lower corporate tax rates may stimulate more entrepreneurial activity and new business formation, leading to job and income growth over the long run.
Fiscal policy involves a government adjusting spending levels and tax rates to influence the economy. It can use expansionary policy like tax cuts or increased spending to boost aggregate demand, or contractionary policy like tax increases or spending cuts to reduce inflation. Pakistan faces challenges like tax evasion, a large underground economy, weak fiscal-monetary coordination, and corruption. To address issues, the document recommends increasing the tax-to-GDP ratio by broadening the tax base and rationalizing rates, reducing untargeted subsidies, taxing the agricultural sector, and implementing austerity measures.
Fiscal policy refers to a government's spending and tax policies to influence macroeconomic conditions. The document discusses different aspects of fiscal policy including:
- Countercyclical fiscal policy aims to stabilize the economy by increasing government spending and reducing taxes during recessions, and reducing spending and raising taxes during expansions.
- Discretionary fiscal policy is used purposefully by governments to achieve macroeconomic goals like reducing inflation or boosting growth. Tools include changing spending, taxes, and borrowing.
- Non-discretionary or automatic fiscal policy relies on built-in stabilizers like income taxes that automatically influence demand over the business cycle.
- Large fiscal deficits can adversely impact growth by reducing funds for
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Tax and participatory development models _ JenaChidananda Jena
This document discusses taxation models and participatory development models. It provides background on issues with taxation such as complexity, exemptions, and tax avoidance tactics. It then discusses strategies for more efficient, equitable and effective tax policy including removing loopholes, broadening the tax base, implementing anti-avoidance rules, and reviewing tax treaties. The document also discusses principles of taxation, consumption taxes, and forms and variations of participatory development.
Tax system in nigeria – challenges and the way forwardAlexander Decker
This document discusses challenges facing Nigeria's tax system. It outlines several key challenges: lack of statistical tax data, inability to prioritize tax efforts, poor tax administration due to understaffing and lack of training, and multiplicity of taxes. The document examines these challenges in more detail and argues that addressing these issues is important for establishing an efficient and effective tax regime in Nigeria.
Lado Gurgenidze, former Prime Minister of Georgia, discusses key economic reforms that transformed Georgia since the Rose Revolution in 2003. These include lowering taxes to a flat rate, targeting inflation, removing import tariffs and simplifying business regulations. As a result, Georgia experienced high GDP growth, declining debt, and became one of the freest economies in the world. Gurgenidze argues the sustainability of reforms that are pervasive, permanent, quantifiable and affect citizens' daily lives, such as low flat taxes and ease of business. Reforms at risk of being reversed are niche, complex and non-quantifiable.
Fiscal policy deals with the government's budgeting of revenues and expenditures. It aims to promote economic growth and development through public projects and welfare programs. Public finance concerns the income and spending of public authorities and aims to balance the two. Taxes are a compulsory contribution imposed on citizens in return for which no direct benefit is provided. The key canons of taxation are equity, certainty, convenience, and minimizing costs. Direct taxes are paid directly by taxpayers while indirect taxes may be passed on to consumers. Fiscal policy uses government spending and tax programs to influence aggregate output, employment and prices in the economy.
This document defines key terms related to fiscal policy such as bond yield, budget deficit, cyclical fiscal deficit, direct and indirect taxation, national debt, and structural fiscal deficit. It then discusses what fiscal policy is, how it involves taxation, spending, and borrowing to affect aggregate demand. Changes to fiscal policy can impact both aggregate demand and supply. The document also provides breakdowns of UK government spending and revenues, and discusses different types of taxes and their progressiveness.
This document provides an overview of China, covering political, economic, and sociocultural factors. Politically, China is ruled by the Communist Party and has a decentralized system with limited democratic processes. Economically, China has experienced rapid growth with an average 10% GDP increase for 30 years, making it the world's second largest economy. Socioculturally, China has a large and growing population that is becoming more urbanized and educated, with rising incomes and consumption.
- The document discusses Indonesia's economic and fiscal updates under President Joko Widodo's 2019-2024 vision of improving connectivity and infrastructure. Key points include GDP growth slowing to a 2-year low of 5.05% in Q2 2019 due to weaker investment. Exports fell while imports declined faster, helping GDP. The US-China trade war has boosted Vietnam's economy but widened Indonesia's trade deficit. Solutions proposed include improving competitiveness, workforce skills, and commodity value-addition. The DGT outlines new tax regulations like tax holidays and super deductions to promote investment and employment.
An Assessment of revenue generation drive of Lagos state government through e...Jeremy Williams
Effective taxation is critical for generating government revenue but many nations struggle with administration and compliance issues. In Lagos State, low oil prices reduced funds, increasing the urgency of boosting internally generated revenue. This study examines how Lagos State improved tax administration and the impact on revenue, citizens, and development. It analyzes the state's efforts to transform its revenue base and infrastructure for its growing population through more efficient revenue collection.
Effect of vat and tax on economy an analysis in the context of bangladesh.Alexander Decker
This document summarizes a research paper on the effects of taxes and VAT on the economy of Bangladesh. It provides background on VAT and how it has replaced sales taxes in Bangladesh. It discusses the country's current tax policies, including income tax rates that are progressive up to 25% and a uniform 15% VAT rate. It analyzes how the tax system affects people in Bangladesh, noting the heavy reliance on indirect taxes results in a small number of taxpayers shouldering the burden. The narrow tax base and exemptions are also issues. In conclusion, broadening the tax base is desirable but agricultural income exemptions need reconsideration given many affluent people claim agricultural income to avoid taxes.
Fiscal policy involves government spending, taxation, and borrowing to influence economic activity. There are three main views on fiscal policy: Keynesian, New Classical, and Supply-Side. Keynesians support using deficits during recessions and surpluses during booms. New Classical economists argue deficits only affect tax timing. Supply-Siders emphasize reducing marginal tax rates to boost labor and investment. Automatic stabilizers and difficulties with proper timing make discretionary policy challenging with both benefits and risks.
FACTORS AFFECTING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN KITALE...paperpublications3
Abstract:This study seeks to establish factors affecting tax compliance by Small and Medium Enterprises, with special emphasis on Income Tax and Value Added Tax and their effects on government revenue. Tax compliance level which is internal factor affecting tax revenue not only undermines tax administration infrastructure but also makes the tax base narrow and inequitable. The objectives of the study include establishing the influence of compliance cost, fines and penalties and attitudes of tax compliance among Small and Medium Enterprises. The study adopts a descriptive research design involving both qualitative and quantitative research methodology. The target population was 200, out of which a sample size of 132 respondents were drawn, using stratified and simple random sampling. Questionnaires were used to collect primary data from the respondents, which were analyzed using SPSS applying both descriptive and inferential analysis. There was a positive relationship between the tax and compliance cost (r=.514), fines and penalties (r=.415) attitudes (r=.546) and tax compliance. The findings showed that compliance cost, fines and penalties and attitude had significant relationship with tax compliance. It is recommended that the tax system should provide a clear and simple guideline on how to fill tax returns but also enhance taxpayer education services to enable the taxpayers understand their rights and obligations as taxpayers, there should be moderate levels of fines and taxes so that SMEs are encouraged to comply since they will keep accurate records for taxation purposes in order to avoid fines and penalties.
Keywords: Direct tax, Indirect tax, Medium enterprise, Productive expenditure, tax evasion, tax impact.
The document discusses taxation in Pakistan and its importance for development. It notes that Pakistan faces obstacles to tax administration like weak capacity and inefficient collection. Properly organized tax systems are now accepted as engines of development. Both direct and indirect taxes are essential for bringing revenue to the state to fund public expenditures and promote economic growth, employment, and stability. However, in developing countries like Pakistan, direct taxation has limited scope so indirect taxation plays a more significant role.
Germany has the fifth largest economy in the world and is a key member of the European Union. It has a population of over 80 million people and Berlin is the largest city. While Germany has a highly skilled workforce and is the fourth largest exporter in the world, it faces challenges around environmental taxes, female labor participation, and reducing protections between regular and non-regular workers. Currently the German economy is performing well with record low unemployment, though it depends on the strength of the wider Eurozone.
Presentation on Sources Of Revenue For GovernmentShubham Saraf
The government collects revenue from various tax and non-tax sources. Tax revenue includes items like income tax of Rs. 1,72,026 crores, corporation tax of Rs. 359,990 crores, and service tax of Rs. 82,000 crores. Non-tax revenue consists of items such as interest receipts, dividends, grants, and income from public enterprises totaling Rs. 125,435 crores. Capital receipts include borrowings, recoveries of loans, and small savings deposits totaling over Rs. 500,000 crores in 2011-12.
Here are the steps to calculate the level of GDP using the data provided:
Consumption (C) = £800bn
Government spending (G) = £300bn
Gross capital formation (I) = £250bn
Exports (X) = £400bn
Imports (M) = £350bn
Using the expenditure method formula:
GDP = C + I + G + (X - M)
= £800bn + £250bn + £300bn + (£400bn - £350bn)
= £800bn + £250bn + £300bn + £50bn
= £1400bn
Therefore, the level of GDP using the data provided
This document discusses the relationship between tax structure and economic growth. It presents findings that:
1) High corporate tax rates are negatively correlated with economic growth, as they can discourage investment and innovation. A 10% decrease in corporate tax rates is associated with a 0.64% increase in annual GDP growth.
2) Personal income tax rates do not seem to significantly impact economic growth.
3) Lower corporate tax rates may stimulate more entrepreneurial activity and new business formation, leading to job and income growth over the long run.
The Relationship between Tax Avoidance Strategies and Economic Growth in Nigeriaijtsrd
This study investigated the relationship between tax avoidance strategies and economic growth in Nigeria, a sample of selected respondents was drawn using the convenience sampling within Nigeria. To achieve this, the sample consisted two groups, the tax payers and the tax officials, while tax payers included managers, CFOs and employees of private sector, the tax officials were selected from the Federal Inland Revenue Service FIRS . Descriptive analyses technique was employed to rank the selected tax avoidance strategies based on the responses obtained from each group while the multiple regression estimation technique was used to determine how each strategy affects economic growth in Nigeria. The descriptive analysis revealed that profit shifting to tax havens and transfer pricing strategies have significant inverse relationship with economic growth in Nigeria. We therefore recommended the need for a critical review of the Nigerian tax laws to take care of loopholes in the tax laws, and the contribution of other professionals such as accountancy firms and public tax officials should also be checked by the government by breaking the monopolistic tendency of these accountancy firms and ensuring that public tax authority is well funded. Dr. Sunday Zibaghafa | Dr. Odogu Laime I. "The Relationship between Tax Avoidance Strategies and Economic Growth in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-7 | Issue-5 , October 2023, URL: https://www.ijtsrd.com/papers/ijtsrd60019.pdf Paper Url: https://www.ijtsrd.com/management/accounting-and-finance/60019/the-relationship-between-tax-avoidance-strategies-and-economic-growth-in-nigeria/dr-sunday-zibaghafa
Customs and tax reforms effect on manufacturing aqnd retail sectors in matebe...Alexander Decker
This document summarizes a research study on the effects of customs and tax reforms in Zimbabwe from 2000-2010 on the manufacturing and retail sectors in Matebeleland province. A sample of 20 companies was surveyed using questionnaires and interviews. The results found that while some tax policies were satisfactory, administration and enforcement were deficient due to a lack of education on the reforms. Experiences with the reforms varied, and many businesses still relied heavily on imports despite customs changes. The study suggests further reforms should involve taxpayers more and improve communication between policymakers and implementers when changes are made.
This document discusses the impact of taxes on economic development. It defines different types of taxes such as corporate tax, goods tax, property tax, income tax, and customs tax. It then examines both the positive and negative effects of taxes. The positive effects include encouraging work, saving, and investment, while reducing budget deficits. The negative effects include reducing investment incentives, lowering human capital formation, and reducing the incentive to work. The conclusion states that while taxes can achieve economic stability, increasing taxes too much can reduce consumption and negatively impact the overall economy.
Effects of government taxation policy on sales revenue of SME in Uasin Gishu ...inventionjournals
ABSTRACT: In Kenya, SME provide source of employment creation, innovation, competition, economic dynamism which eventually lead to poverty alleviation and national growth. Government taxation policy is one of the factors that constitute the SMEs‟ economic surroundings. This study sought to find out the effects of government taxation policy on sales revenue of SME in Kenya and particularly Uasin Gishu County. In order to achieve the purpose of this study, the specific research objective was addressed: to find out the effects of government taxation policy on sales revenue of SME. The data for this study was collected from primary and secondary sources. While the research instruments were questionnaire, interview and document analysis, the study population comprised of staff and management of SME within Uasin Gishu County, Kenya who formed the sample for the study. The explanatory research design was employed in the study. The samples for the study were selected using stratified random and simple random sampling methods. The data from the research instruments were coded and analyzed using the SPSS. Descriptive statistics, frequency tables, percentages, mean and standard deviation were used to present the data, while Correlation was used to test the hypotheses. Results of the study found statistically significant relationships between the three dimensions of government taxation policy and sales revenue. The researcher concluded therefore that government taxation policy had a significant impact on sales revenue of SMEs.
Effect of Indirect Taxation on Economic Development of Nigeriaijtsrd
This study examined the effect of indirect taxation on economic development of Nigeria. The specific objectives were to evaluate the effect of petroleum profit tax on the real gross domestic product of Nigeria, examine the impact of company income tax on the gross domestic product of Nigeria and determine the impact of value added tax on the real gross domestic product of Nigeria. The study adopted ex post facto research design. The study made use of secondary data obtained from the Central Bank of Nigeria Statistical Bulletins for the relevant years. The hypotheses were tested using granger causality statistical tool. The following findings were made for this study Petroleum profit tax has no significant effect on the gross domestic product of Nigeria. Company income tax has significant effect on the gross domestic product of Nigeria and value added tax have significant effect on the gross domestic product of Nigeria. The study concluded that about 96 changes in the dependent variable are explained by the independent variable. The study recommends that Government should make available more non interest loans available to farmers as a way of diversifying the economy from its over dependency in the oil sector, and that strict penalties should be meted to people who avoid and evade tax payments in order to minimize the incidence of tax evasion and tax avoidance. Ezu, Gideon Kasie | Jeff-Anyeneh Sarah. E. "Effect of Indirect Taxation on Economic Development of Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-1 , December 2021, URL: https://www.ijtsrd.com/papers/ijtsrd47781.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/47781/effect-of-indirect-taxation-on-economic-development-of-nigeria/ezu-gideon-kasie
The document discusses the potential introduction of taxation in the UAE. Due to declining oil prices and increasing fiscal pressures, the UAE government is considering implementing taxes like VAT and CIT to diversify government revenue sources. The IMF recommends a low, broad-based VAT of around 5% and lowering the corporate tax rate from 20% to 10% while expanding its scope. The government is also exploring other options like taxes on vehicles, fees, and reducing energy and water subsidies. Officials say taxes will likely be implemented at low rates to minimize economic impacts, but agreements are still being reached across GCC countries.
Impact of Taxes on Revenue Generation in Nigeria (A Study of Federal Government)ijtsrd
This paper investigated the effect of taxes on revenue generation in Nigeria from 1981 to 2016, a period of thirty five 35 years and the data for the analysis were sourced from Central Bank of Nigeria's CBN, 2016 Statistical Bulletin. The variables used include total federally collected revenue as a proxy for revenue generation, labour, gross capital formation, company income tax, petroleum profit tax, personal income tax, value added tax, custom and excise tax, direct tax and indirect tax. Fully modified ordinary least squares method FMOLS was employed to determine the direction and the magnitude of impacts. Based on the effect of direct tax on revenue generation in Nigeria, both company income tax and personal income tax boost revenue generation in Nigeria while petroleum profit tax discourage revenue generation in Nigeria. Also, model on the effect of indirect tax on revenue generation showed that the two variables used as indirect tax variable value added tax and custom and excise tax have positive and significant effect on revenue generation in Nigeria. Lastly, the researchers found out that the estimated result on the effect of direct and indirect tax on revenue generation in Nigeria showed that indirect tax lead to revenue generation in Nigeria while direct tax does not and this is so because most people pay indirect tax in Nigeria than direct tax. Also, tax evasion and avoidance are very minimal in indirect tax and this lead to more revenue which encourage economic growth in Nigeria. The researchers recommended that it is important that efficient and effective tax policy be implemented to ensure that enough revenue is generated for growth purposes like strict penalties should be meted to people who avoid and evade tax payments. Government should base her taxes on indirect tax because this will not create any burden on the citizen and in this way, it will lead to growth. Olaleye John Olatunde | Salome Olabimpe Ajayi "Impact of Taxes on Revenue Generation in Nigeria (A Study of Federal Government)" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-1 , December 2019, URL: https://www.ijtsrd.com/papers/ijtsrd29514.pdfPaper URL: https://www.ijtsrd.com/economics/other/29514/impact-of-taxes-on-revenue-generation-in-nigeria-a-study-of-federal-government/olaleye-john-olatunde
The document provides an overview of a World Bank report on improving investment climates. It discusses key points made in the report, including that governments should aim to create investment climates that benefit all firms and society. The report emphasizes reducing business costs, addressing gaps between policies and implementation, and tackling issues like corruption. It also discusses the report's perspectives on international rules and standards, and ways the international community can help developing countries improve their investment climates.
The document discusses tax policy and incentives for attracting foreign direct investment (FDI) to developing countries, using Vietnam as a case study. It begins by classifying different types of tax incentives and evaluating their advantages and disadvantages. It then analyzes data on tax incentives adopted in 107 developing countries, finding that tax holidays and preferential tax rates are most common. While incentives can positively impact FDI inflows, they often result in significant lost tax revenue. The document concludes by detailing Vietnam's corporate income tax rates and incentives, which are generally competitive but may not be optimally efficient.
Effect of Tax Reforms on Corporate on Nigerian Economic Developmentijtsrd
This study assessed the effect of tax reforms on productivity in Nigeria over the period of 1992 to 2019. It examined the impact of value added tax (VAT) and company income tax (CIT) on GDP per capita as a measure of productivity. The study employed descriptive statistics, Pearson correlation, and regression analysis to analyze the time series data obtained from various sources. The study found that VAT and CIT had a substantial negative influence on GDP per capita in Nigeria, whereas petroleum profit tax had a significant positive effect. It was recommended that the government should diversify the economy to increase the overall tax revenue base and promote more development.
FACTORS AFFECTING TAX COMPLIANCE AMONG SMALL AND MEDIUM ENTERPRISES IN KITALE...paperpublications3
Abstract:This study seeks to establish factors affecting tax compliance by Small and Medium Enterprises, with special emphasis on Income Tax and Value Added Tax and their effects on government revenue. Tax compliance level which is internal factor affecting tax revenue not only undermines tax administration infrastructure but also makes the tax base narrow and inequitable. The objectives of the study include establishing the influence of compliance cost, fines and penalties and attitudes of tax compliance among Small and Medium Enterprises. The study adopts a descriptive research design involving both qualitative and quantitative research methodology. The target population was 200, out of which a sample size of 132 respondents were drawn, using stratified and simple random sampling. Questionnaires were used to collect primary data from the respondents, which were analyzed using SPSS applying both descriptive and inferential analysis. There was a positive relationship between the tax and compliance cost (r=.514), fines and penalties (r=.415) attitudes (r=.546) and tax compliance. The findings showed that compliance cost, fines and penalties and attitude had significant relationship with tax compliance. It is recommended that the tax system should provide a clear and simple guideline on how to fill tax returns but also enhance taxpayer education services to enable the taxpayers understand their rights and obligations as taxpayers, there should be moderate levels of fines and taxes so that SMEs are encouraged to comply since they will keep accurate records for taxation purposes in order to avoid fines and penalties.
Here are a few suggestions for things Jo can do to feel accomplished:
- Set small, achievable goals each day/week and celebrate completing them. Checking tasks off a to-do list can be very satisfying.
- Pursue a hobby or interest in their free time. Learning a new skill or developing talent in an enjoyable activity can boost confidence and fulfillment.
- Volunteer in their community. Helping others through causes they care about allows purpose and social interaction.
- Practice self-care daily like exercising, journaling, meditation. Taking care of their mental and physical well-being lays the foundation for feeling accomplished overall.
- Spend quality time with family/friends. Meaningful relationships are
An evaluation of the contribution of value added tax (vat) to resource mobili...Alexander Decker
This document evaluates the contribution of Value Added Tax (VAT) to resource mobilization in Nigeria. It finds that VAT has significantly contributed to resource mobilization and capital formation based on regression analyses showing strong positive relationships between VAT and key economic indicators like Real Gross Domestic Product, Current Revenue, and Internal Revenue. The analyses show VAT individually and significantly impacts these indicators based on t-statistic and F-statistic tests. It concludes that VAT is an ideal form of taxation in Nigeria's tax system and has become more important as a source of government revenue.
IMPACT OF TAX REVENUE ON ECONOMIC GROWTH IN RWANDA FROM 2007-2017.Nzabirinda Etienne
Rwanda is working tirelessly to achieve economic growth and development. Taxation effective is the one tool to promote and to accelerate economic growth and development, several studies analyses the impact of tax on economic growth and economic development.
The objective of this study is to investigate the impact of tax revenue on economic growth in Rwanda from 2007-2017. Secondary data were sourced from Rwanda Revenue Authority (RRA) and National Institute of statistics of Rwanda (NISR) for the period spanning from 2007Q1-2017Q4. Descriptive data analysis was used and the variable considered here are: Gross domestic product (GDP) as proxy for economic growth, direct tax (DT), Tax on goods and services (TGS) and Tax on international trade and transaction (TITT). Significant literature review for this study is available.
The results of the unit root and the co-integration tests revealed that all variables are integrated of order one, I(1) and Johensen cointegration test indicate existence of a long-run equilibrium relationship among variables included in the model and we use also Vector Error Correction Model (VECM) estimation method for data analysis to estimate for short run result. The empirical findings showed that direct tax(DT)and tax on goods and services(TGS) variables have positive at 0.1631 to 0.60 31 respectively impact on economic growth, while Tax on international trade and transactions(TITT) variable has negative at -0.005913 and it impacts on economic growth.
This study recommends that the policymakers within government of Rwanda must improve both direct tax and tax on goods and services (domestic tax) and increase Taxes on international trade transactions (customs duties), it will harm economic growth of Rwanda therefore custom duties must be rationally reduced or abolished and free trade zones like Africa continental free trade area (AfCFTA) must create to foster increased exchange of goods and services across borders.
Key Words: Tax Revenue, economic growth, Gross domestic product, direct tax, tax on goods and services, tax on international trade and transaction, VECM, Rwanda
Taxation: The Instrument of Economic Growth in NigeriaAJHSSR Journal
ABSTRACT: The provision of basic infrastructures are very important to the economic development of a
nation. The extent to which the government is able to provide these amenities is determined by the number of
resources at the government's disposal. The inability of the government to provide these basic amenities have
led to the winding up and relocation of many multinational companies operating in Nigeria to other African
countries. As a result, this study investigated the effects of corporate income tax (CIT) and customs and excise
duty (CED) on economic growth. The study used a descriptive research design, and data from 1971 to 2020
were gathered from the Central Bank of Nigeria (CBN) statistical bulletin and Federal Inland Revenue Service
(FIRS) publicationThe study concluded that the provision of basic infrastructures will boost the economy and
will drive individual taxpayers towards a positive response to tax payments. This will increase the level of tax
compliance and result in additional revenue for the government.This study recommended that the government
should make developmental projects their top agenda item as the availability of infrastructural facilities is a
necessary condition for investment that will grow the economy.
KEYWORDS: Company Income Tax, Custom and Excise Duty, Economic Growth, Gross Domestic Product,
Taxation
The document discusses various international taxation issues such as tax avoidance by multinational corporations and tax evasion by wealthy individuals that exploit gaps in international tax frameworks. It also examines factors that enable tax evasion like secrecy laws in tax havens and the failure of certain tax policies, as well as strategies used like shifting profits to low-tax jurisdictions and treaty shopping. Finally, the document proposes reforms to Pakistan's tax system to make it fairer and boost tax collection.
Effect of Custom and Excise Duties on Infant Mortality in Nigeriaijtsrd
This study examined the effect of custom and excise duties on infant mortality rate in Nigeria from 2004 2021. The study adopted Ex post Facto research design. Data were extracted from CBN statistical Bulletin. Descriptive statistics was used to analyze the data and the hypothesis was tested with regression analysis via E View 9.0 statistical software. The study indicates that custom and excise duties have a negative but significant effect on infant mortality rate in Nigeria. As a result, the report advised that institutional reforms be implemented at the Department of Customs in order to plug manifest leakages. Tax officials tax collection mechanisms must be free of corruption and embezzlement. If this is not done, the revenue collected may fall short of the target. Oranefo, Patricia C. "Effect of Custom and Excise Duties on Infant Mortality in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-6 | Issue-6 , October 2022, URL: https://www.ijtsrd.com/papers/ijtsrd51941.pdf Paper URL: https://www.ijtsrd.com/management/accounting-and-finance/51941/effect-of-custom-and-excise-duties-on-infant-mortality-in-nigeria/oranefo-patricia-c
Similar to Taxation, Private Fixed Domestic investment Behaviour and Zimbabwe’s Economic Growth (20)
STUDY ON THE DEVELOPMENT STRATEGY OF HUZHOU TOURISMAJHSSR Journal
ABSTRACT: Huzhou has rich tourism resources, as early as a considerable development since the reform and
opening up, especially in recent years, Huzhou tourism has ushered in a new period of development
opportunities. At present, Huzhou tourism has become one of the most characteristic tourist cities on the East
China tourism line. With the development of Huzhou City, the tourism industry has been further improved, and
the tourism degree of the whole city has further increased the transformation and upgrading of the tourism
industry. However, the development of tourism in Huzhou City still lags far behind the tourism development of
major cities in East China. This round of research mainly analyzes the current development of tourism in
Huzhou City, on the basis of analyzing the specific situation, pointed out that the current development of
Huzhou tourism problems, and then analyzes these problems one by one, and put forward some specific
solutions, so as to promote the further rapid development of tourism in Huzhou City.
KEYWORDS:Huzhou; Travel; Development
Enhancing Losari Beach Exploration: Augmented Reality for Immersive Visualiza...AJHSSR Journal
ABSTRACT: South Sulawesi, commonly known as Makassar, boasts rich cultural heritage and customs,
making it a prominent destination for tourism. Among its attractions, Losari beach stands out as a focal point for
visitors seeking to explore the city's natural beauty and cultural offerings. In this context, leveraging modern
technology such as augmented reality presents an innovative approach to showcasing Losari beach to potential
tourists. This research endeavors to introduce tourism assets in a more visually captivating manner through the
use of augmented reality. Utilizing software tools like Unity and Adobe Illustrator, the study focuses on creating
an immersive experience where tourists can interact with virtual representations of Losari beach. By simply
pointing their mobile phone cameras at designated markers or using barcode scanners, tourists can access
augmented reality features embedded within the application. The findings of this research aim to provide
valuable information, particularly for foreign tourists, about Losari beach, positioning it as a compelling
destination within South Sulawesi's diverse array of tourist attractions. Through this technological innovation,
the study seeks to enhance the visibility and appeal of Makassar city's tourism offerings on a global scale.
KEYWORDS: Visualizing, Losari Beach, Augmented Reality
DEVELOPMENT STATUS AND COUNTERMEASURES OF TMALL DURING THE COVID-19 EPIDEMICAJHSSR Journal
ABSTRACT:China's e-commerce enterprises have developed rapidly, among which Tmall has become one of
the largest retail shopping websites in China.But in the past year, the Covid-19 epidemic has brought a huge
impact to Chinese e-commerce enterprises, and Tmall is no exception.Therefore, the development status of
Tmall in the new crown epidemic situation was analyzed, and the viewpoint was put forward :Tmall1 stabilized
the situation in the face of the epidemic situation and made a very correct countermeasures.The influence of this
epidemic on Tmall was deeply analyzed, and the conclusion was made: the new crown epidemic is both a
challenge and an opportunity forTmall.
KEYWORDS:Tmall; COVID - 19 outbreak ; The electronic commerce
Factors affecting undergraduate students’ motivation at a university in Tra VinhAJHSSR Journal
ABSTRACT: Motivation plays an important role in foreign language learning process. This study aimed to
investigate student’s motivation patterns towards English language learning at a University in Tra Vinh, and factors
affecting their motivation change toward English language learning of non-English-major students in the semester.
The researcher used semi-structured interview at the first phase of choosing the participants and writing reflection
through the instrument called “My English Learning Motivation History” adapted from Sawyer (2007) to collect
qualitative data within 15 weeks. The participants consisted of nine first year non-English-major students who learning
General English at pre-intermediate level. They were chosen and divided into three groups of three members each
(high motivation group; average motivation group; and low motivation group). The results of the present study
identified six visual motivation patterns of three groups of students with different motivation fluctuation, through the
use of cluster analysis. The study also indicated a diversity of factors affecting students’ motivation involving internal
factors as influencing factors (cognitive, psychology, and emotion) and external factors as social factors (instructor,
peers, family, and learning environment) during English language learning in a period of 15 weeks. The findings of
the study helped teacher understand relationship of motivation change and its influential factors. Furthermore, the
findings also inspired next research about motivation development in learning English process.
KEY WORDS: language learning motivation, motivation change, motivation patterns, influential factors, students’
motivation.
The Impact of Work Stress and Digital Literacy on Employee Performance at PT ...AJHSSR Journal
ABSTRACT :This research aims to analyze the correlation between employee work stress and digital literacy
with employee performance at PT Telkom Akses Area Cirebon, both concurrently and partially. Employing a
quantitative approach, the study's objectives are descriptive and causal, adopting a positivist paradigm with a
deductive approach to theory development and a survey research strategy. Findings reveal that work stress
negatively and significantly impacts employee performance, while digital literacy positively and significantly
affects it. Simultaneously, work stress and digital literacy have a positive and significant influence on employee
performance. It is anticipated that company management will devise workload management strategies to
alleviate work stress and assess the implementation of more efficient digital technology to enhance employee
performance.
KEYWORDS -digital literacy, employee performance,job stress, multiple regression analysis, workload
management
The Settlement of Construction Disputes Through Dispute Councils From the Per...AJHSSR Journal
ABSTRACT:This research differs from the practice of business activity in the construction services industry,
which may lead to construction disputes. The settlement of construction disputes is a consensus based on the
basic principle of debate. If the discussions between the parties do not reach an agreement, the parties may take
measures to resolve the dispute through the dispute council. Because the standard governing the disputes
committee was not fully regulated, they did not comply with the principle of legal certainty. Therefore, further
research was needed to establish a theoretical basis for regulating the disputes committee in settling construction
disputes. This research is a standard legal research using a legal regulatory, conceptual, and comparative
approach. The research results show that the ideal concept of resolving construction disputes through a dispute
council based on the value of legal certainty is to establish that the position of the dispute council is a special
court that has the authority to resolve construction disputes under construction services agreements. To realize
the position of the Court of Disputation as a special court, it must be based on the creation of philosophical
values, the creationof legislative regulations, and the creation of the institutional structure of the Court of
Disputation.
KEYWORDS-Construction Disputes, Dispute Council, Special Court
VALUES OF ORAL LITERATURE IN THE SOCIETY: A STUDY OF FOLKTALES OFOGBA IN RIVE...AJHSSR Journal
ABSTRACT : Oral literature is a creative work of art that portends high merit and has the creative use of
imagination in preliterate societies. It adopts the genres of literature: drama, prose and poetry in the oral milieu,
using performance as its hallmark. It thrives on the use of oral data because of its orality. This paper focuses on
the moral values or oral literature in the society using Ogba as a spring board. The study was carried out in
communities ofOgba. The population of the study consists of ten towns and village, in Ogba. The theoretical
framework used is Dell Hyme’s ethno-poetics because the works of oral literature relate to the society. This
paper concludes that oral literature serves to against all odds; communicate ideas, emotions, beliefs and
appreciation of life. The folktales in Ogba for instance, serve similar purpose through their
rendition/performance. Through the stories, the younger generation in Ogba society is familiarised with the
customs, traditions, and rituals prevalent in the society. This paper therefore recommends the use of oral
literature in all its genres to inculcate moral values and lessons to the teenagers and youths. Against this
background, Ogba (African) themselves must cease to regard oral literature as primitive and fetish.
KEYWORDS: Values, Oral Literature, Society, Ogba, Folktales
Pormalistikong Pagdalumat sa mga Tula ni Ron CanimoAJHSSR Journal
ABSTRACT: Nilayon ng pag-aaral na ito na masuri ang dalawampung (20) tula ni Ron Canimo gamit ang
pormalistikong dulog batay sa mga sumusunod na elemento: (a) Sukat at Tugma, (b) Talinghaga at
Simbolismo, (c) Imahen, (d) Tema, at (e) Diksiyon. Layunin din nitong mataya ang antas ng pagtanggap ng
ginawang pagsusuri gamit ang nabuong instrumento sa pagtataya nito. Sinunod dito ang Input-Process-Output
na balangkas ng pag-aaral at ginamitan ng kwantitatib-deskriptib-ebalwatib na pamamaraan. Sa pamamagitan
ng talatanungang ibinatay sa ginamit ni Morales (2014) na naimodipika ayon sa kahingian ng kasalukuyang
pag-aaral, tatlong (3) gurong eksperto ang nagsilbing tagataya dito na siyang tumiyak sa kahusayan ng nabuong
pagsusuri ng mananaliksik. Gamit ang Content Analysis, natuklasan na makabagong pamamaraan ang istilo na
ginamit ni Ron Canimo sa pagsulat ng mga tula. Lahat ng kanyang mga tula ay walang sinusunod na sukat at
tugma, may iba‟t ibang tayutay at simbolismong ginamit, magkaibang pandama ang pinagana dahil sa mga
imahe at paglalarawang ginawa, iba‟t ibang uri ng pag-ibig ang tinalakay at gumamit ng pormal, impormal o
kumbersasyonal na wika at makabagong istilo sa pagsulat ng tula. Gamit ang mean at standard deviation,
lumabas na “Mataas” ang antas ng pagtanggap sa kabuuan ng mga gurong eksperto na tumaya sa nabuong
pagsusuri. Lumabas din na “Mataas” ang antas ng kanilang pagtanggap sa nabuong pagsusuri batay sa mga
sumusunod na elemento: (a) Sukat at Tugma, (b) Talinghaga at Simbolismo, (c) Imahen, (d) Tema, at (e)
Diksiyon. Mula sa natayang pagsusuri at kinalabasan ng antas ng pagtanggap dito, naitala ang mga paksa sa
Junior High School Filipino na maaaring lapatan at gamitan ng nabuong pagsusuri.
KEYWORDS: Kumbensyunal, Pagdalumat, Pormalistiko, Ron Canimo, Tula
SCHOOL CULTURE ADAPTATION AMONG INDIGENOUS PEOPLES COLLEGE STUDENTS AT A PRIV...AJHSSR Journal
ABSTRACT: This qualitative study investigates the adaption experiences of indigenous college students at the
University of Mindanao, Matina-main campus. Eight major themes emerged, including difficulties with language
proficiency, online learning, classroom interaction, examination systems, grading procedures, school regulations,
resource accessibility, coping mechanisms, and future goals. Implications include the requirement for targeted
language proficiency and technology use support, an understanding of adaption processes, interventions to
improve resource accessibility, and equitable public administration policies. The study underlines the importance
of adaptation in various educational contexts, as well as the role of educators and legislators in creating inclusive
learning environments.
KEYWORDS: indigenous college students, adaptation, educational challenges, coping strategies
The effect of Institutional Ownership, Sales Growth and Profitability on Tax ...AJHSSR Journal
ABSTRACT: This research aims to test, analyze and obtain empirical evidence about the influence of
institutional ownership, sales growth and profitability on tax avoidance. The object of this research is
manufacturing companies in the consumer goods industry sector listed on the Indonesia Stock Exchange (BEI)
in 2018-2022. This research used quantitative research methods and causal research design. The sampling
technique in this research used non-probability sampling with purposive sampling as the basis for determining
the sample so that a sample of 55 samples was obtained. The data used is secondary data obtained from the
official website of the Indonesia Stock Exchange (BEI) during the 2018-2022 period. The data analysis method
used was multiple linear regression analysis with several tests such as descriptive statistical tests, classical
assumption tests, and hypothesis testing using SPSS version 26 statistical software. The results showed that the
institutional ownership variable has no effect on tax avoidance, while the sales growth and profitability has a
negative and significant effect on tax avoidance.
KEYWORDS: Institutional Ownership, Sales Growth, Profitability, Tax Avoidance
MGA ESTRATEHIYA SA PAGTUTURO KAUGNAY SA PASALITANG PARTISIPASYON NG MGA MAG-A...AJHSSR Journal
ABSTRAK: Ang mga estratehiya sa pagtuturo ay mahalagang kasangkapan sa paghahatid ng mabisang
pagtuturo sa loob ng silid. Tinukoy sa pag-aaral na ito ang antas ng kagustuhan ng mga mag-aaral sa pagsasadula,
pangkatang talakayan at paggawa ng mga koneksyon sa tunay na karanasan sa buhay bilang mga estratehiya sa
pagtuturo ng panitikan sa Filipino at pasalitang partisipasyon ng mga mag-aaral sa Baitang 7 ng Misamis
University Junior High School, Ozamiz City. Ang ginamit na disenyo sa pananaliksik na ito ay deskriptivcorrelational. Ang mga datos sa pag-aaral ay nagmula sa kabuuang populasyon na 120 na mag-aaral at tatlong
mga guro na tagamasid sa pasalitang partisipasyon ng mga mag-aaral. Ang Talatanungan sa Kagamitan sa
Pagtuturo ng Panitikan at Checklist batay sa Obserbasyon sa Pasalita na Partisipasyon ay ang instrumentong
ginamit sa pagkalap ng datos. Mean, standard deviation, Analysis of Variance at Pearson Product-Moment
Correlation Coefficient ang mga ginamit na estatistiko na sangkap. Inihayag sa naging resulta na ang tatlong piling
estratehiya sa pagtuturo ng panitikan sa Filipino ay may pinakamataas na antas ng kagustuhan ng mga mag-aaral.
Ang antas ng pakilahok ng mga mag-aaral sa paggamit ng tatlong estratehiya sa pagtuturo ng panitikan ay
pinakamataas na nagpapahiwatig na aktibong nakilahok ang mga mag-aaral sa mga gawain. Inihayag din na
walang makabuluhang kaibahan sa antas ng kagustuhan ng mga mag-aaral sa mga estratehiya sa pagtuturo ng
panitikan sa Filipino. Ito ay nangahulugan na gustong-gusto ng mga mag-aaral ang pagkakaroon ng mga
estratehiya sa pagtuturo. Walang makabuluhang kaugnayan ang kagustuhan sa mga estratehiya at antas ng
pakikilahok ng mga mag-aaral. Hindi nakaapekto sa kanilang pakikilahok ang anumang estratehiyang ginamit ng
guro.
KEYWORDS : estratehiya, karanasan, pagsasadula, pagtuturo, pangkatang talakayan
The Role of the Instruction of Reading Comprehension Strategies in Enhancing ...AJHSSR Journal
ABSTRACT :Throughout my studies and teaching English in different language centers and higher studies
institutions, I have come to conclude that students consider Reading comprehension as a nightmare that
frightens them and hinders their language acquisition in the Moroccan EFL Context. This may cause them to
develop an internal psychological obstacle that grows as their lack of the necessary instruments or tools to
overcome are not equipped with. They become lost and unaware about or unfamiliar with the necessary reading
comprehension strategies that could help them to face the problem of misunderstanding or non-understanding
of English texts. Respectively, this article which is only one part of my whole study aims at showing the effect
of teaching reading strategies in enhancing the S1 students‟ familiarity with reading strategies and raising their
frequency use. A sample of 283 University students in EFL context have been chosen randomly and have
attended the usual academic reading classes, yet only 76 are subject to this survey. 38 of them constitute the
experimental group who have attended the treatment regularly in one of the language centers and the other 38
participants are chosen randomly from the whole population to constitute the Control group. They all have
Psychosocial Factors and Deviant Behaviors of Children in Conflict with the L...AJHSSR Journal
ABSTRACT:This study aims to determine the relationship between psychosocialfactors and deviant
behaviors among children in conflict with the law (CICL) inDavao Region. The researchers want to discover the
prevalent factors thatdrive these children to their behaviors. Further, the study sought to determinethe
manifestation of psychosocial factors in terms of life satisfaction, emotionalsupport, self-esteem, and personality
traits. The study's data came from N-83children in conflict with the law (CICL) at the Regional Rehabilitation
Center forYouth (RRCY) in Bago Oshiro, Davao City; all respondents are male. This studyused a total
enumeration sampling technique due to the relatively smallpopulation size. The researchers adapted the
Psychosocial surveyquestionnaires by Zabriskie & Ward (2013) and by John and Srivastava (1999)as well as the
Deviant Behavior Variety Scale (DBVS) by Sanches et al. (2016).Through the use of a validated questionnaire,
the mean and standard deviationare determined. The researchers modified this questionnaire and translated itinto
the respondents' mother tongue (Cebuano) for them to comprehend itbetter. The study discovered no significant
relationship between psychosocialfactors and deviant behaviors of children in conflict with the law (CICL) in
theDavao Region
KEYWORDS :Children in Conflict with the Law (CICL), deviant behaviors, psychosocial factors
Entropy: A Join between Science and Mind-SocietyAJHSSR Journal
ABSTRACT: Entropy is join, intersection and interaction between natural science and human mind-society.
We proposed that if internal interactions exist in isolated systems, entropy decrease will be possible for this
system. Management in system is a typical internal interaction within the isolated system. The purpose of
management is to use regulating the internal interactions within the system, and to decrease the increasing
entropy spontaneously. We propose the principle of social civilization and the developing direction is: freedom
of thought, rule of action. Both combinations should be a peaceful revision and improvement of social rules and
laws. Different countries and nations, different religions and beliefs should coexist peacefully and compete
peacefully. The evolution of human society must be coevolution. Its foundation is the evolution of the human
heart and the human nature.
KEYWORDS: entropy, science, society, management, mind, evolution.
A Model of Disaster Resilience Among Colleges and Universities: A Mixed Metho...AJHSSR Journal
ABSTRACT :This research paper aimed to create a comprehensive framework for measuring disaster
resilience in colleges and universities. The study used a mixed method through Exploratory Factor Analysis
(EFA), which involved analyzing data from a survey questionnaire. The questionnaire was developed based on
in-depth interviews with 12 selected participants from the University of Mindanao, as well as relevant literature
and studies. It was reviewed and validated by 10 experts using a method called Content Validity Ratio (CVR).
This questionnaire was then administered to 400 students from 10 different colleges in University of Mindanao.
After conducting the Exploratory Factor Analysis and performing rotations and iterations, the researchers
identified five main constructs that characterize disaster resilience among colleges (1) disaster preparedness, (2)
disaster awareness, (3) community readiness, and (4) disaster management, (5) disaster resilience. The
researchers aimed to create an organization called “Council of College Disaster Volunteers (CCDV)” which
consist of student volunteers. These factors can be used to develop effective management strategies and
strengthen efforts in preventing and managing disasters and accidents.
KEYWORDS:content validity ratio, criminology, disaster resilience, disaster management, exploratory factor
analysis, and Philippines.
Environmental Struggles and Justice Among Lumad Farmers of Davao CityAJHSSR Journal
ABSTRACT : The study described the various environmental struggles experienced among the participants
and their status in accessing justice. The study followed a qualitative multiple-case study approach; the
participants are the Lumad farmers of Marilog, Davao City selected through a Critical sampling method and
aims to present the environmental violations experienced by the Lumad farmers in Davao City and how it
affected their families and sustenance further, their status in accessing justice is also explored. The study
concluded that the most common struggles the participant experience are Illegal logging and improper waste
disposal, which affect their farms, family, health, and income. Their preferred means to accessing justice is
through barangay settlement; the rigors of accessing courts, such as distance, expenses, fear of ruling, and the
hassle of being called to be present in court, are the most prevalent barriers that hinder the lead farmers from
accessing justice or seeking legal action. Nevertheless, the participants believed that the government would help
them in accessing justice.
KEYWORDS :access to justice, criminology,environmental justice, environmental struggles, lumadfarmers
CYBERBULLYING EXPERIENCES OF UNIVERSITY OF MINDANAO CRIMINOLOGY STUDENTSAJHSSR Journal
ABSTRACT:This paper explores the cyberbullying experiences among Criminology students at the
University of Mindanao. A simple random sampling method was used to distribute the study's online
questionnaire to the respondents and to survey the target population. This study has four hundred (400)
respondents, and the respondents are Criminology students at the University of Mindanao. The findings of this
study revealed that the level of cyberbullying experiences is sometimes manifested. On the other hand, the
cyberbullying experiences of the students indicate a moderate level, which indicates that the cyberbullying
experiences of the respondents are sometimes manifested. Also, the computations showed that among the
indicators presented, the highest mean is obtained in the psychological effect, which implies that there is a
significant effect of cyberbullying experiences of the respondents in terms of the Gender level of the
respondents. Therefore, respondents with a low level of cyberbullying experiences tend to have a moderate level
of cyberbullying experience. However, there is no significant effect in terms of age and year level of the
respondents according to the results regarding the psychological, emotional, and physical impact of
cyberbullying.
KEYWORDS :cyberbullying, emotional, experiences, psychological,physical effect, and simple random
sampling method.
A philosophical ontogenetic standpoint on superego role in human mind formationAJHSSR Journal
ABSTRACT: One of the most significant contributions of psychoanalysis to understand the human being is the
elaboration of a model about the mind from a topical and dynamic perspective. Freud explains the mind by the
constitution of the preconscious, conscious, and subconscious. Later, by three dynamic components: the id, the
ego and the superego. Such an organization of the psychic apparatus supposes not only individual elements, but
social influences along the process of hominization. In this paper, we recover the findings of the renowned
anthropologist Lewis Morgan, trying to link some of them to the psychoanalytic theory. Especially highlighting
the importance of superego in Haidt’s social intuitionism.
Keywords: evolutionism, intuitionism, psychoanalysis, Freud, Haidt, Morgan
Improving Workplace Safety Performance in Malaysian SMEs: The Role of Safety ...AJHSSR Journal
ABSTRACT: In the Malaysian context, small and medium enterprises (SMEs) experience a significant
burden of workplace accidents. A consensus among scholars attributes a substantial portion of these incidents to
human factors, particularly unsafe behaviors. This study, conducted in Malaysia's northern region, specifically
targeted Safety and Health/Human Resource professionals within the manufacturing sector of SMEs. We
gathered a robust dataset comprising 107 responses through a meticulously designed self-administered
questionnaire. Employing advanced partial least squares-structural equation modeling (PLS-SEM) techniques
with SmartPLS 3.2.9, we rigorously analyzed the data to scrutinize the intricate relationship between safety
behavior and safety performance. The research findings unequivocally underscore the palpable and
consequential impact of safety behavior variables, namely safety compliance and safety participation, on
improving safety performance indicators such as accidents, injuries, and property damages. These results
strongly validate research hypotheses. Consequently, this study highlights the pivotal significance of cultivating
safety behavior among employees, particularly in resource-constrained SME settings, as an essential step toward
enhancing workplace safety performance.
KEYWORDS :Safety compliance, safety participation, safety performance, SME
Psychological Empowerment and Empathy as Correlates of ForgivenessAJHSSR Journal
ABSTRACT: The study explores Psychological Empowerment and Empathy as Correlates of Forgiveness.
The two variables are regarded to have influence on the decision one makes to forgive another. The study aimed
at examining the relationships between psychological empowerment and forgiveness, empathy and forgiveness
and to identify which one of the two,Psychological Empowerment or Empathy, is the more powerful predictor of
forgiveness. The study took a survey design with a sample of 350 drawn from a population of university students
using a self-administered questionnaire with four sections: Personal information, Psychological empowerment
scale, Toronto Empathy questionnaire, and the Heartland Forgiveness Scale (HFS). Data analysis employed
Pearson’s product moment correlation and regression analysis to test hypotheses. The results show significant
relationships between psychological empowerment and forgiveness as well as empathy and forgiveness.
Empathy was found to be the more powerful predictor of forgiveness.
KEY WORDS: Psychological empowerment, empathy, forgiveness
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
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Introduction to AI for Nonprofits with Tapp NetworkTechSoup
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Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Taxation, Private Fixed Domestic investment Behaviour and Zimbabwe’s Economic Growth
1. American Journal of Humanities and Social Sciences Research (AJHSSR) 2018
A J H S S R J o u r n a l P a g e | 26
American Journal of Humanities and Social Sciences Research (AJHSSR)
e-ISSN : 2378-703X
Volume-02, Issue-05, pp-26-39
www.ajhssr.com
Research Paper Open Access
Taxation, Private Fixed Domestic investment Behaviour and
Zimbabwe’s Economic Growth
1
Joe Muzurura, 2
DR N Sikwila
1
Chinhoyi University of Science and Technology, Zimbabwe
2
Chinhoyi University of Science and Technology, Zimbabwe
ABSTRACT:
The paper examines the taxation, private fixed domestic investment and economic growth nexus in Zimbabwe
for the period 1998 to 2015 using Ordinarily Least Square regression. Private fixed investment decisions
undertaken by firms and other economic agents are very critical for the economic growth. Levels of taxation
affect production, consumption, and distribution of wealth in an economy. Taxation revenues can be utilised as a
vital tool to: raise government revenue, enhance price stability, optimally allocate and distribute available
resources, boost domestic savings, increase domestic investment as well as to accelerate the pace of economic
growth.Taxation, domestic savings, public corruption and lagged GDP were found to be significant. Our results
suggest that taxation revenue that are channelled to productive public expenditure such as roads, bridges, rail,
energy, transport and other communication systems are likely to stimulate the productivity of private fixed
domestic investment. The primary challenge for policy makers is devise tax rules that lowers tax evasion, reduce
corruption, enhance domestic savings yet adequately protect the tax base whilst lessening the current heavy
excess burden on firms.
Key words: Taxation, Private fixed domestic investment, Economic Growth, Zimbabwe
I. INTRODUCTION AND BACKGROUND
Private fixed domestic investment (PDFI) a major contributor to overall investments, is the leading source
of business cycle volatility, employment generation and economic growth.The effects of taxation on private
fixed domestic investment and economic have long been a central emphasis of research in public finance and
economics. In the long-term the taxation of income whilst providing the revenues needed to fund government
expenditure, may also depress output, consumption and private fixed domestic investment. Higher taxes such as
corporate and personal income, presumptive and capital gain taxes inhibit domestic investment rate and
subsequently economic growth. Higher taxes encourage tax evasion and distort the efficient utilisation of human
capital and slow down growth in labour supply as economic agents substitute labour choice in favour of leisure.
In addition, suboptimal taxes can lead to a huge flow of resources from high productivity sectors such as
manufacturing industries to informal sectors that may have lower productivity and multiplier effects.
The optimal long-run level of capital income taxation remains the subject of vigorous debate in both the
theoretical economics literature and in public political discourse. The economic incidence of tax include micro
effects on the distribution ofincome and efficient utilisation of resources as well as macro effect on the level of
capacity, output, employment, prices and growth. Whilst taxes are the primary sources of government revenue
in Sub-Saharan Africa accounting for between 15 and 20 percent of GDP in the past few years, in Zimbabwe it
accounts for at least 75% of the GDP. The real tax burden on actual tax payers (firms and individuals) is very
high in Zimbabwe since the country has enormous share of agricultural and informal sectors that often are
underrated or/and untaxed. A major question in public finance is how variations in tax policy affect domestic
and foreign investment, economic activity and social welfare. In theory, according toHarbinger (1879) and
Ramsey (1947) taxes are negatively correlated with economic growth. Hence, higher taxes mean lower growth
rates of both domestic investment and economic growth. All taxes, with the exception of lump taxes, introduce
distortions to an economy by not having a neutral effect on the behaviour of economic agents. The distortionary
effects of taxes on private fixed domestic investment result in loss of efficiency, often called dead weight loss or
excess tax burden. Therefore, higher taxes mean higher rates of distortionary effects, which results in higher loss
of efficiency and accordingly, the allocation of resources in an economy may not be Pareto optimal. The
transmission channels of taxation revenue on domestic investment process and economic growth remains the
subject of open debate.Understanding the relationship between taxation and private fixed domestic investment
2. American Journal of Humanities and Social Sciences Research (AJHSSR) 2018
A J H S S R J o u r n a l P a g e | 27
behaviour and economic growth in developing countries such as Zimbabwe, is significant for the designing of
efficient and equitable tax policies that minimises excess burden on firms and yet stimulating private domestic
investment.
II. BACKGROUND
After independence in 1980, Zimbabwe experienced unprecedented economic growth of 10.8 of percent in
1982.The country introduced some redistributive strategies that compelled a large public sector and increased
public spending on health and education infrastructure in order to address socio-economic inequalities
associated with the colonial era. Most of the government expenditure in the first decade was funded through
increased taxation revenue mainly from domestic firms and personal income. However, economic recession in
the period leading to 1990 caused low export growth and weak competitiveness in international trade. Economic
growth plummeted heavily from 10.8 percent in 1982 to 3% in 1987. Consequently, due to declining taxation
revenue, resources required for wealth redistribution, public expenditure in roads, and health and education
infrastructure dwindled to a halt.
Under pressure from the World Bank and International Monetary fund, the country adopted economic
reforms in 1990. The major aims of the economic reforms were to liberalise interests and exchange
rates,fostering trade openness, reduction of tariffs and import duties, and redirecting resources to the productive
private sector.One of the major components of the economic reforms was fiscal policy and tax reforms whose
objective was to reduce government expenditure, simplification of tax brackets, revision of excise taxes,
reductions of import duties, eliminations of export taxes as well as broadening and flattening of tax base. The
tax rate was reduced from 35 percent to 33 percent in 1991. A value added tax (VAT) of 12.5 percent was
introduced as source of indirect taxation in order to compensate for possible loss of revenue that resulted from
increased trade openness, reduced domestic savings and reduction of corporate taxes.However, the revenue
neutral reduction of trade taxes increased the distortions between formal and informal sectors. Additional excess
tax burden on the manufacturing sector drove many large firms into the informal sector where tax enforcement
was low and the ability to evade taxes was high.The economic reforms failed and the country slid into a crisis
that began in year 2000.
In 2001, Zimbabwe Revenue Authority (ZIMRA) was restructured inorder to improve the revenue
administration, ensure efficient collection of taxes as well as to facilitate international trade.Since 2007 the
contract has been in a long-drawn-out meltdown in terms of domestic investment and economic growth, in fact
in all macroeconomic fundamentals. The level of unemployment is estimated to be around 90 percent hence
severely dealing a major blow to tax revenue collection. Paradoxically, the level of high individual tax rate has
gone up from 33 percent to 45 percent whilst the firms are taxed at 40 percent up from 35 percent. According to
Hall and Jorgenson (1967), high levels of taxation do affect private fixed domestic investment and economic
growth. Whilst taxes may not be ranked top in determining private domestic investment, uncontestably, it is one
of the major issues both domestic and foreign investors often consider before undertaking new investment
(Njuru et al., 2013; Vergara, 2004). The effect of taxes on private fixed domestic investment behaviour is
important since it affects both the demand and supply-side factors. The majority of studies on taxation focus on
the effect of taxation on economic growth rather on disaggregated assessment of taxation effects on domestic
investment, the major conduit for economic growth. Formulating and implementing appropriate tax policies that
encourage domestic investment by minimising efficiency losses, reducing excess burden on few firms and
generating sufficient revenue for the public sector expenditure in order to guarantee equitable income and
wealth distributions in the country is certainly an overwhelmingly enormous task.
Since the attainment of independence, tax-policies in Zimbabwe have often been unscrupulous,
indiscriminate, and inconsiderate of the huge socio-economic, political, and institutional variations inherent in
the country. Yet, taxation plays a very vital role in economic growth and development, through resources
mobilization,reduction in inequalities of income, improvement in social welfare, foreign exchange earnings,
facilitating international trade and stimulating private fixed domestic investment. Despite the overwhelming
empirical evidence that taxes can be both efficient and equitable to all tax payers (see Leigbfritz, 1987; Hsieh
and Parker, 2002; Engen and Skinner, 1992; Easterly and Rebelo, 1993a), the high taxation in Zimbabwe is
fostering price instability, discouraging savings and fixed domestic investment. The country has adhocally
experimented with tax reforms starting with the introduction of accelerated depreciation in 1982, the
introduction of investment incentives in 1990/1991, the repeal of accelerated depreciation and investment
credits and increase in statutory tax rate in 1997, and the current efforts to simplify the income tax act. Such
regular manipulation of the tax policy since independence, suggest that policy makers believe taxation to be an
optimal tool for altering the composition of private fixed domestic investment behaviour in order to stimulate
economic growth. However, despite all these efforts there is little convincing empirical evidence to suggest that
this perspective is correct (see Bustos et al., 2004; Kormendi and Koester, 1989).
3. American Journal of Humanities and Social Sciences Research (AJHSSR) 2018
A J H S S R J o u r n a l P a g e | 28
Whilst Zimbabweans are the highest taxed people in the world, the majority of thetax revenues might be
going to fund non-productive expenditure such as salaries, security and wages. The low tax revenue
performance might also be the source of declining private fixed domestic investment andeconomic growth. The
theoretical nexus between taxation and economic growth has been clearly demonstrated in Zimbabwe literature
(for example, Munongo, 2012; Maraire and Sunde, 2012), and in other developed and developing economies
(see Mullen et al, 1994; Easterly and Rebelo, 1992; Barro, 1991; DeLong and Lawrence H. Summers 1991;
Baumol et al., 2007). However, the taxation, private fixed domestic investment and economic growth
relationship has not been extensively interrogated in developing countries.The main objective of the study is to
examine the effects of taxation onprivate fixed domestic investment behaviour andeconomic growth. The study
is significant for a variety of reasons: First, higher statutory corporate tax rates, value-added taxes, effective
capitalgains tax rates as well aslow depreciationallowances, discourage the private fixed domestic investment
growth rate and consequently the growth of the nation’s capital stock. Second, high taxes diminish and distort
labour supply growthby discouraginglabour force participation in market activities, preferring instead the
informal sector. As a result, higher taxation distorts occupational choices and the efficient use of human capital
by discouraging workers from employment in sectors with high social productivitybut a heavy tax burden.
Third, higher taxes have the undesirable potential to inhibit productivity growth in private domestic firms by
weakening human capital, research and development. In Zimbabwe higher taxes are likely also to deter the
development of venture capital for high technology manufacturing industries whose positive spill-over effects
can potentially enhance theproductivity of existing factor inputs such aslabour and capital. Fourth, tax policies
also impact on the marginal productivity of private fixed capital by distorting domestic investment from heavily
taxed sectors into more lightly taxed sectors with lower overall productivity (Harberger, 1962, 1966).
The composition of the tax system is probably as important for private fixed domestic investment and
economic growth as is the absolute level of taxation. In developing countries such as Zimbabwe, with a large
number of emerging small firms and replete with inefficient tax administration, high taxes encourage tax
evasion and transition to unofficial economy. Furthermore, developing countries that are able to mobilize
adequate tax resources through broad-basedtax structures that are efficientlyadministered and enforced are likely
to enjoy faster domestic, foreign investment and economic growth rates. This paper extends the existing
literature in several ways. By incorporating variables such as corruption, foreign direct investment and firm
uncertainties, we provide a comprehensive analysis of the effect of taxation private fixed domestic investment,
an approach that to our best of knowledge has never been tested in Zimbabwe studies. Most studies in
developing countries have tended to use aggregate investment (that include inventory, foreign direct investment
and rental investment) yet these are known to have insignificant roles in business cycle volatility. Our focus is
on private fixed domestic investment, a major source of business volatility. The purpose of the study is to
investigate the effect of taxation on private fixed domestic investment behaviour for the period 1997 to
2012.The article is made up of five sections: section one is the introduction and background section. Section two
covers theoreticalconsideration and empirical literature on the effect of taxation on private fixed domestic
investment; Section three presentsthe methodological framework. Findings and discussions are on section four
whilst section five is concerned with the conclusions and recommendation.
2.2 Empirical review
Taxation is fundamental to economic growth and development in both developing and developed
economies. According to Mendoza et al (1995), taxation revenue provides governments with financial resources
required for economic growth hence enabling productive public expenditure such as water utilities and energy
and expansion of communication networks that stimulate productivity of private fixed domestic investment.
Domestic investment decisions undertaken by firms and other economic agents are very critical for the economy
as a whole because private fixed business spending on capital equipment are one of the locomotives of long-
term economic growth. According to the classical economist such as Harbenger (1879) and Ramsey (1947), the
only objective of taxation was to raise government revenue. However, with changes in circumstances and both
economic and political ideologies, the objectives of taxation have also been evolving. Levels of taxation affect
production, consumption, and distribution of wealth in an economy. Taxation revenues can be utilised as an vital
tool in raising government revenue, enhance price stability, to optimally allocate available resources, to boost
savings and private fixed domestic investment as well as to accelerate the pace of economic growth.
Harberger (1947) indicated that changes in taxes could not increase the national income growth rate by
more than 0.1 to 0.2 percentage points and hence in practice levels of taxes appear to be superneutral. Similarly
Mendoza et al (1995) used the endogenous growth model and arrived at the same conclusion. Engen and
Skinner (1992) studied the impact of fiscal policy on economic growth on a sample of 107 countries for the
period 1970 to 1985. Their results established a strong negative effect of the fiscal activity of the state on growth
rates, both long-term and short-term. Engen and Skinner observed that taxes of 10 percentage points led to a
long-term reduction of growth rate of 1.4 percentage points. However in a later study that used the Solow’s
4. American Journal of Humanities and Social Sciences Research (AJHSSR) 2018
A J H S S R J o u r n a l P a g e | 29
growth model, Engen and Skinner (1996) shows that economic growth rate depends on available physical and
human capital and on the changes in their productivity. Early studies like (Eisner, 1969; Summers, 1981;
Bernanke et al, 1988; and Chirinko et al, 1999) implied small effects of tax variables on private fixed domestic
investment and economic growth. In contrast, Auerbach and Hassett (1991), Cummins et al (1994), and
Desaiand Goolsbee (2004) have estimated larger effects of taxation on private fixed domestic investment and
economic growth.Beginning with Jorgenson (1963) and Hall and Jorgenson (1967), many studies have
addressed this important topic using quantitative analysis. A small selection that includes Summers (1981),
Feldstein et al (1983), Auerbach (1983, King and Fullerton (1984), Slemrod (1990), Auerbach and Hassett
(1992), Hines Jr. and Rice (1994), Cummins et al (1996), Devereux et al (2002), and Desai and Hines (2004b).
Auerbach (2002), Gordon and Hines (2002), Hasset and Hubbard (2002), and Hines (2007) used survey
methodology. The findings of these studies find negative effects of corporate income taxes on investment and
economic growth, even though they offer different estimates of magnitudes. Furceri and Karras (2009)
investigated the effects of changes of taxes on economic growth by using an annual data from 1965 to 2007 for
a panel of twenty-six economies. They used the growth rate of real GDP per capita as the main variable and
found that 2 % increase in tax rate reduced real GDP per capita by a margin of between -0.5% to -1%. In recent
empirical literature, the effect of taxation on private fixed domestic investment behaviour has become one of the
leading issues in both public finance and development economics (see McBride, 2012; Arnold et al., 2011;
Keho, 2010; Hines, 2007; Mihir et al., 2004b). According to Jorgenson (1963) the effects of tax policy on fixed
investment demand are captured by the tax-adjusted user cost of capital. The tax-adjusted user cost of capital is
the minimum pre-tax real rate of return needed for the marginal investment to generate a zero post-tax economic
rent (Hall and Jorgenson, 1967). Stiglitz (1973), Sandmo (1974), King (1974) and Boadway (1979) have
extended the Jorgenson’s classical model of investment behaviour (1967) to determine the effects of taxation on
investment decisions. A number of domestic investment literature found very small impacts of tax policy on
private fixed domestic investment behaviour (Clark, 1993; Gravelle, 1992).
Higher taxes have the potential to reduce foreign direct investment (FDI).Dackehag and Hansson(2012)find
that high levels of firm taxation discourages both domestic and foreign fixed investments and hence hinders
economic growth. Kaldir (1963) postulate that availability of tax concessions and incentives affect the location
of FDI.According to McBride (2012), tax policies impact on the decisions of domestic investors and foreign
investors’ decisions of where to invest suggesting a possible relationship between private fixed domestic
investment and FDI. Hartman (2002) argued that the relevant source of financing for the additional private
domestic investment growth are retained earnings of firms and foreign direct investment (FDI) inflows.
According to Desai et al (2004), the sensitivity of FDI to tax depends on the host country’s absorptive capacity
such as presence of investment incentives. Taxes are likely to matter more in choosing an investment location
when non-tax barriers are removed and as national economies converge (Dackehag and Hansson, 2012).
However, according to Hsieh and Parker (2002) in the conditions of integration of international financial
markets, domestic investments are not necessarily constrained by availability of domestic savings. In closed
economies, investors will invest up to a point where the value of the output realized by an investment is equal to
the costs of the investment (Musgrave and Musgrave, 1988).
Based on Scholes and Wolfson (1992) tax will affect the decision of foreign investors to invest in a country
due to the changes in rates of return on assets. They argue that higher in tax will reduce the rates of return and
discourage the FDI in-flow to a country. Hines (1999) found that FDI is sensitive with the tax rates and that a
reduction of 10% on tax rates will increase FDI by a similar percentage. Hartman (184) reported that FDI is
attracted to countries offering non-discriminatory regulatory tax framework, access to markets and profit
opportunities; a predictable and stable business operating environment, skilled and responsive labour markets
and well-developed public infrastructure. Studies examining cross-border flows suggest that on average, FDI
decreases by 3.7% following a 1 percentage point increase in the tax rate on FDI (see Hartman, 1984). Some
recent studies indicate that FDI is becoming increasingly sensitive to taxation, reflecting the increasing mobility
of capital as non-tax barriers to FDI are removed (Boskin and Gale, 1987). Bosworth (1985) indicates that taxes
are often outweighed as a determinant of the rental price of capital by changes in purchase prices and the cost of
funds. This suggest that levels of taxation have little effect on private fixed domestic investment behaviour.
Clark (1993) argues that changes in investment tax credits have had only a limited and delayed impact on
equipment investment. The elimination of the investment tax credit has generally been found to imply
substantial reductions in fixed business spending on machinery and long-run capital intensities, with relatively
smaller effects on inter-sectoral efficiency (see Bovenberg and Goulder, 1989). However Goulder and Summers
(1988) have argued in favour of re-introducing investment tax credits.
However, Pereira (1989) shows that the effects of introducing an investment tax credit depend on how it is
financed. According to Auerbach (1983), measures of the excess tax burden on new fixed domestic investment
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are based on the assumption that a single corporate tax rate applies to all firms. Whereas this may formally be
true, in developing countries like Zimbabwe, additional tax provisions such as deferred andpresumptive taxes
and low depreciation rates cause firms to be subjected to a different tax rate and different tax rules in certain
years. King (1984) demonstrates that the possibility of being subject to an alternative tax regime, and of
switching among tax regimes, alters the investment incentives that accrue to firms. For instance, as is prevalent
in many developing economies, firms in Zimbabwe pay taxes on their income but do not receive tax refunds for
their losses. The losses are carried forward as deferred assets without interest and are subject to expiration after
three years. Thus firms that are not currently subject to any taxation may actually face a higher user cost of
capital than its taxable counterpart, if the firms carry forward the right to receive the extra tax expenditures
(deferred taxes).
Arnold et al (2011) submit that high taxes lead to an increase in the cost of capital and reduce incentives to
invest in new business equipment. Similarly, Keho (2010) avers that taxes provide preferential incentives to
specific sectors hence leading to distortions in capital allocation and reducing the overall investment
productivity. Private domestic investment is usually influenced by the tax policy which directly influences the
rate of return on fixed investment (Overesch and Wamser, 2010). Auerbach and Hassett (1991) found tax policy
important in explaining the cross-section pattern of equipment investment in USA. Overesch and Wamser
(2010) claim that firms’ form their own conclusions about the stability of the tax system and policy credibility,
taking into cognisance today's fiscal policy actions regardless of whether they are deemed permanent or
temporary.Arnold et al (2011) claim that a permanent tax change has a permanent effect on the cost of capital
and thus have an impact on the desired long-run capital stock and hence overall private domestic investment.
They observed that a temporary tax change has no impact on the long-run desired capital stock but simply affect
the timing of adjustment to the desired level of capital stock.
According to Auerbach (1983), whilst lack of policy credibility makes the effective tax policy change
difficult, the uncertainty associated with frequent tax changes can, itself increase the business risks and reduce
the attractiveness of long-term private domestic investment. Bosworth et al (1992) report that although
irreversibility plays an important role on firms’ investment behaviour, what has not been demonstrated is how it
influences the impact of tax incentives. In contrast, Auerbach (1983 finds that taxes do not have a role in the
irreversibility of private domestic investment. They maintain that by its nature, investment irreversibility is
likely to matter relatively more in recessions, when the capital stock exceeds its desired level, and more
generally in business environments of low capital stock growth in which assets are not easily marketed. Lyon
(1990) concurs, firms that are not undertaking new fixed investments are likely not to respond to minor tax
incentives that simply reduce the amount they wish to disinvest. Similarly, investigators of tax reforms in many
countries such as UK (see Sumner, 1986, Devereux, 1989; Feldstein, 1982) andFrance (see Muet and Avouyi-
Dovi, 1987) have also observed that a tax policy has a small effect on private domestic investment behaviour.
Santoro and Wei (2012) disagree, taxation in general affects firm productivity by reducing investment and
effectively increasing the cost of investment capital.
Menjo and Kotut (2012) report that tax rates through their effect on the net returns to labour, saving,
investment, and aggregate demand influence both the magnitude and the allocation of productive capacity. With
passage of time, the increase in aggregate demand further affects the allocation of productive capacity of an
economy through its influence on the returns to factors of production, the development of human capital, the
allocation of capital spending, and investment in technological innovations (Arnold et al., 2011; Bustos et al.,
2004). Fatica (2013) finds that the structure of tax incentives for capital investment in advanced economies has
led to a significantly higher share of investment in machinery and equipment. However, Engen and Skinner
(1996) indicate that a distortionary tax policy may permanently reduce the level of technological growth and the
growth of private domestic investment. Similarly, Vartia (2008) shows that corporate tax rates negatively affect
total factor productivity (TFP) by reducing company profitability and cash flows. Arnold and Schwellnus (2008)
also indicate a negative effect of corporate taxation on both firm-level TFP and investment, particularly in
sectors with higher average profitability such as manufacturing and in firms that lag more behind the
technological frontier (the food industry). The link between taxation and private fixed domestic investment
through the crowding-out effect should also take into account the efficiency of public spending and preferences
in public supply of good and services (Zwick and Mahon, 2017). Auerbach and Hines (2002) posit that taxes
create distortions by affecting prices and the decision making of firms and households. Hence, taxes distort the
allocation of inputs within and between firms, lower the efficiency in the use of production inputs and thereby
affect the overall growth of private fixed domestic investment.
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Hsieh and Parker (2002) present evidence that the reduction in tax on retained earnings increased the
amount of funds available to credit constrained firms, hence producing a private domestic investment surge.
They indicate that in developing countries characterised by ailing financial markets, the taxation of retained
profits removes internal funds from firms where the marginal value of these funds exceeds the real interest rate.
Thus tax has a significant adverse impact on private domestic investment growth. Medina and Valdés (1998)
find that the availability of internal funds is a key determinant in the investment decisions of companies and
hence tax on retained earnings would negatively affect private domestic investment. Higher taxes are a
disincentive to private domestic investment since they eat into whatever profits that are made by firms and
consequently scare away foreign direct investment (Azah, 2005). Dynamic models of taxation suggest that the
combination of lower corporate income taxes and elimination of investment tax credit depresses long-run capital
intensities and producer surplus (Bovenberg, 1988) and generate inter-sectoral efficiency gains (Bovenberg and
Goulder, 1989; Jorgenson and Yun, 1989). Hence the net effect tends to be an increase in consumer welfare
(Goulder and Summers, 1988; Jorgenson and Yun, 1989). However, Bustos et al (2004) used a panel of 83
publicly held firms during 1985-1995 to calculate the user’s cost of capital and concluded that taxes have very
little effect on the desired capital stock.They demonstrated that taxes have very little effect on the desired capital
stock because they are offset by tax codes thatallow for the deduction of interest and depreciation. Bustos et al
(2004) use a panel of 83 publicly held firms during 1985-1995 by calculating the user’s cost of capital. On
theoretical grounds, most models indicate that higher taxes should reduce private domestic investment (desired
capital stock) through the cost of capital channel and also reduce internal funds available for investment
through the liquidity constraint channel (Vergara,2003).
Bovenberg and Goulder (1989) claim that taxes are offset by tax codes that allow for the deduction of
interest and depreciation. Zwick and Mahon (2017) examined the impact of tax policy on bonus depreciation of
120000 firms in US between 2008 and 2010. They found that bonus depreciation raises investment in eligible
capital relative to ineligible capital by 10.4 percent between 2001 and 2004 and 16.9 percent. Tax breaks, such
as accelerated depreciation and investment tax credits, reduce the cost of capital, which may later increase
private domestic investment (Njuru et al., 2013; OECD, 1991). The findings suggest that private fixed domestic
investment respond strongly when the tax policy generates immediate cash flows in firms, but not when cash
flows only come in the future. Acosta and Yoo (2012) in a cross-country study of 69 countries with proportional
representation of low, middle and high income countries found income tax replaced for property and
consumption taxes deterring long term private fixed domestic investment and economic growth
prospects.Djankov et al (2010) estimated the relationship between corporate taxation and private domestic
investment using a sample that comprised 85 developed and developing countries. Their findings suggested a
consistent and large adverse effect of corporate taxation on private domestic investment. They indicated that a
10 percent increase in the effective corporate tax rate reduced the ratio of private domestic investment to GDP
ratio by about 2 percent.
Similarly, a number of empirical studies have found significant effects of tax policy on private domestic
investment behaviour, indicating a possible range for the investment elasticity for changes in the user cost of
capital in the range of 0.25 to 1 (see Chirinko, et al., 1996; Auerbach et al., 1994; Cummins, et al., 1994).
However, other empirical studies that focus on the user cost of capital adjusted for taxation find an elasticity of
investment with respect to the tax-adjusted user cost of capital of between -0.4 and -1.0 (Hassett and Hubbard,
2002). Hsieh and Parker (2002) present evidence that the reduction in tax on retained earnings increased the
amount of funds available to constrained firms, hence producing a private domestic investment surge in these
companies. Auerbach and Hassett (1992) and Cummins et al (1996) report significant negative effects of
taxation on gross fixed capital formation and foreign capital inflows. According to Engen and Skinner (1996),
one factor that could stifle tax-induced private fixed domestic investment expansion is a lack of new domestic
savings due to higher tax rates. The finding indicate that in an economy without significant foreign capital flows
(such as Zimbabwe), the increased demand for investment would be financed by the additional supply of
domestic saving attracted by higher net interest and lower tax rates. However simulation models done by Engen
(1996) and empirical studies by Skinner and Feenberg (1990) find little support for a strong responsiveness of
domestic savings to the interest rate and rates of taxation. Similarly, Skinner and Feenberg (1990) observe that
the investment elasticities gained from micro-level studies of firm investment behaviour already reflect the
additional cost or difficulties incurred by firms in providing additional financing for their investments,
suggesting that the pure demand elasticities are even larger. Mahadavi (2008) reports that high inflation rate will
force the government to increase the taxes on goods and services by increasing the price and stabilizing the
consumption and aggregate expenditure. Excise taxes on some domestic products may be affected with the
change in inflation rate (Tanzi, 1989). Mahdavi (2008) revealed the effect of income, profit and capital gain tax
due to change in inflation rate and investment plans. They demonstrate that when the inflation rates increase,
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firms will protect their assets by substituting them with assets that attract lessdomestic tax (such as agricultural-
related assets). Feldstein (1996) quantifies the relative importance of inflation-taxation interactions with
economic growth and reports that even with relatively small price changes the effective tax burden for firms
rises sharply as the rate of inflation rises and falls sharply as inflation declines
Cummins et al (1994) examine many corporate tax reforms with public company data and conclude that tax
policy has a strong effect on private fixed domestic investment. In contrast, utilising similar data used by
Cummins et al (1994) and a different empirical methodology, Chirinko et al (1999) argue that tax policy has a
small effect on private fixed domestic investment behaviour. The relatively freer cross-border capital mobility
makes it imperative to consider the effects of tax policy reform on private domestic investment (Keho, 2010).
The frequent lead determinants of investment behaviour of firms that come before tax are infrastructure
availability and quality, cost and quality of labour, and availability of good governance (Keen and Mansour,
2009).A priori, foreign investors consider tax policies of a destination nation when making their investment
decisions (Ahiawodzi and Tsorhe, 2013). According to Fjeldstad and Rakner (2003), tax policies in Africa
incongruously address private firms’ incentive to invest productively, to create jobs, and to boost growth. Keho
(2010) agrees that tax policies in Africa reduce labour supply growth in the economy. The findings suggest that
incorrect tax rates reduce the marginal productivity of private fixed capital by distorting domestic investment
from heavily taxed formal sectors into more lightly taxed informal sectors resulting in low private domestic
investment.
According to Engen and Skinner (1992), heavily taxed countries may experience lower value of marginal
productivity of capital, which will tend to retard economic growth, holding constant private domestic investment
rates in both human and physical capital. A number of recent theoretical studies have used endogenous growth
models to simulate the effects of a fundamental tax reform on private domestic investment and economic growth
(see Ballard et al., 1985; Auerbach and Kotlikoff, 1987; Fullerton and Rogers, 1993; Auerbach, 1996a; Engen
and Gale, 1996). The studies conclude that reducing the distortionary effects of a current tax structure would
permanently increase private domestic investment and economic growth. In contrast Lucas (1990), indicated
that a revenue-neutral change that eliminated all capital income taxes while raising labour income taxes would
negligibly increase private domestic investment and economic growth. Jones et al (1993) disagree, eliminating
all distortionary taxes would raise average annual domestic investment growth rates by four to eight percentage
points. However, Mendoza et al (1994) suggest relatively modest differences in economic growth of roughly
0.25 percentage points annually as the consequence of a 10 percentage point change in tax rates. A study by
McKinsey (1996) points to the potential importance of the inter-sectoral allocation of capital in Japan and
Germany due to different tax policy. McKinsey reported that whilst firms in Japan and Germany had much high
higher rates of domestic investment, private fixed investment in US appeared to be allocated to higher
productivity sectors such as the manufacturing sector. Hence, they observe that the net increment to the effective
capital stock and economic growth, was considerably higher in the United States. Similarly, King and Fullerton
(1984) investigated the tax systems in the UK, Sweden, Germany, and the US and found a strong negative
correlation between economic growth and the inter-sectoral variability in private domestic investment tax rates.
Likewise, Vergara (2004) modelled the link between corporate tax reform and private investment behaviour in
Chile in the period 1975- 2003, and found that private domestic investment behaviour was negatively affected
by high corporate tax rates. Karabegovic et al (2004) observe that high marginal tax rates reduce people’s
willingness to work up to their full potential, to take entrepreneurial risks, and to create and expand a new
business. High and increasing marginal taxes have serious negative consequences on economic growth, labour
supply and private fixed domestic investment (Njuru et al., 2013; Reynolds, 2008). According to Pereira, with
deficit financing, the boost in private domestic investment can be more than offset by the combination of
financial crowding-out and inter-sectoral efficiency losses. Jorgenson and Yun (1989) argue that major benefits
could be achieved by indexing the capital tax base and by shifting the tax burden from corporate capital to
household capital.
According to Bhatia (1998), if customs taxes are imposed on inputs and business equipment used by
domestic manufacturers, such taxes would increase firms’ cost of production and discourages private business
spending and economic growth. In the long run, the taxation of income from capital can provide the revenues
needed to fund government, but may depress capital formation, output, and consumption (Jesse Edgerton,
2010).Tax induced corruption raises firms’ operational costs, creates business uncertainty thereby deterring both
domestic investment and FDI (Murphy, 2010; Shleifer and Vishny et al., 1993; Wei, 1997 and Campo et al.,
1999). Zurawicki and Habib, 2010) confirm that corruption is a major source of concern on firms because it
raises the costs of production and heightens uncertainty about the business operating environment.Corruption
may negatively affect the country’s ability to grow both domestic investment and foreign investment since it
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works as a tax on profits (Aghion et al., 2016). Corruption discourages private fixed domestic investment
because the various forms of rents such as kickbacks, bribes, and other transactions costs due to corruption
delays and distortions increase uncertainty over the returns to capital and raise the cost of production and
reduces profitability (Mbaku, 2010; Murphy, 2010; Mauro, 1995). Corruption acts as a tax on capital, but unlike
official taxes, corruption is uncertain and unpredictable, and therefore difficult for firms to internalize (Tanzi,
1988). Aghion and Cagé (2016) claims that reducing public corruption provides the largest potential impact for
welfare gains through its impact on the uses of tax revenues.
III. MATERIALS AND METHODS
In Zimbabwe a number of studies on private domestic investment behaviour exists(forsee Manda, 2014;
Malumisa, 2013; Muyambiri, 2013; Bayai et al., 2013; Jecheche, 2010; Mutenyo, 2008; Jenkins, 1998; Dailami
and Walton, 1992). The studies largely used common variables (exchange and interest rate and aggregate FDI
inflows which have an effect on aggregate domestic investment behaviour. However, we extend the knowledge
on domestic investment behaviour by considering the peculiar characteristics of the Zimbabwean economy. In
particular, we interrogate peculiar characteristics of Zimbabwe economy by investigating other variables which
have not been considered such as uncertainties, public corruption and effects of taxation. In addition, most
studies on domestic investment behaviour in developing countries often adopt the neoclassical theory of
investment (see Busari and Omoke, 2008; Chinyere sand Ugochukwu, 2013; Bakare, 2011; Orji and Mba, 2010;
Sakr, 1993) and add on an ad-hoc distributed lag in attempt to capture the dynamics of the adjustment of the
actual capital stock to the steady-state desired level based on current values of demand and prices. We argue that
this application of the neoclassical model is less suited to describing the dynamics of private fixed domestic
investment behaviour in Zimbabwe’s manufacturing environment where variables FDI, tax rates, inflation,
domestic savings and business uncertainty fluctuate with higher volatility. We therefore modified the flexible
accelerator theory to determine private fixed domestic investment decisions. Hence, the flexible accelerator
models allows us to consider both inside and outside lags in undertaking fixed investment particularly in an
uncertain and corrupt business environment.
Starting from the accelerator principle that posits a linear relationship between output Y and increase in stock of
current capital K: (1)
We assume that private fixed domestic investment in each period is a fraction of the gap between
the existing level of capital and the desired level leading to a set of lags that decline geometrically as t increases
(Clark, 1917; Koyck, 1954; Knox, 1952; Chenery, 1952).
Hence , where 0 < < 1 (2).
Due to the current economic meltdown it is unlikely that there has been a significant change in output and
therefore we consider output to be constant and equal to Ȳ. If the expected volume of firm output remains
unchanged then: ) , (3)
Where = 1/1 + are weights in geometric series. Therefore equation(3)
becomes: or (4)
Where represents desired capital stock, Yt current output, accelerator constant and t time.
Once a decision to invest is made, the actual investment is not automatically done but involves fixed investment
lags or delays common in landlocked country with high import content on machinery and equipment. The
investment decision lag is also long as firms consider the possibility of investment irreversibility, uncertainties
in securing foreign currency and negotiating tax incentives (e.g. tax holidays, special initial allowances etc.) we
therefore lag equation (2) as follows: (5)
Multiplying equation (5) by we obtain:
(6)
Subtracting(6) from (2) we obtain; (7)
Since the term tends to be zero in infinitely geometrical series, the equation becomes
(8)
The equation can be written as (9)
However, net fixed business spending in two periods is the change in the stock of capital, therefore
subtracting from both sides of the equation we get net private fixed domestic investment: =
or (10)
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According to Chenery (1952) and Koyck (1954), the net investment is the distributed lag
accelerator which is inversely related to the capital stock of the previous period and is positively related to the
total output level. In our model we lag private sector gross fixed capital in the private sector in order to show
the flexible accelerator. Due to low domestic savings we assume that private FDI inflows may be used to
augment the domestic savings (St) as shown below (see Sikwila, 2015).
(11)
Where represents depreciation rates. Since different processes of domestic investment financing plans overlap
in different time-periods, and there is a path dependency that link past and future levels of accumulation (see
Ford and Poret, 1991; Kopcke and Brauman, 2001; Orhangazi, 2008b; Arestis et al., 2012), we include GDP as
a lagged variable.
Model specification
Hence the model is specified as a linear ordinary least square (OLS) regression equation in the form:
(12)
Where
PFDIt-1Lagged private fixed domesticinvestment
GDPt-1= lagged Gross Domestic product
FDIt = Foreign direct investment inflows
CORRt = Corruption
LNTAXt = log of Tax Revenue
DS= Domestic Savings
ɛ = Error term
Description and justification of dependent variable andcovariates
Private fixed domestic investment (PFDIt-1)
The dependent variable is lagged private fixed domestic investment, measured by the ratio of private sector
gross domestic capital formation of the private sector to the GDP. We lag PFDI in order to account for partial
adjustment in fixed business spending following Serven and Villanueva (1991).
Log of Tax revenue
GDPt-1
The expected change in GDP reflects the accelerator element in private investment behaviour. The expected
change in GDP has been lagged because; First, private fixed domestic investment is associated with economic
growth through the accelerator effect which makes private investment a liner proportion of changes in GDP. (2)
The current values of the real GDP growth rate may be affected by the private fixed investment rate (PDFI), and
therefore lagged values of GDP reduces the possibility of the simultaneous equations bias in the coefficient
estimates. Serven (1993) recommends the use of lagged GDP in order to reduce simultaneity. (3) Most studies in
empirical literature have proxied for market size either with real or real lagged GDP (see Foster-McGregor et
al., 2013; Eddine et al.,2014); Nguyen and Dong, 2013; Magnus, 2010); Kim,2010; Faini and de Melo, 1990;
Wheeler and Mody,1992; Jenkins, 1998; Aseidu, 2002; Agosin and Mayer, 2000; Tan et al., 2008); Li and Liu.,
2005); Kim and Seo,2003). Assuming an accelerator effect, priori expectation sign of GDP is positive and
significant implying that both resource-seeking foreign and domestic firms associate a large market size with
high effective demand and profitability.
Corruption (CORRt)
Corruption is widely defined to include collusion, theft, kickbacks, frequency of irregular payment to
employees, the policy and the judiciary, improper practices in the public sphere, bribery, and other illegal rent
seeking activities (Lambsdorff, 2003; Zouhaier, 2011;). The research measured corruption by the corruption
perception index (PCI). The PCI ranges from 0 (most corrupt) to 10 (least corrupt). In this study we have
recorded corruption in such a way that a high number represents high corruption in order to avoid the usual
awkwardness in the interpretation of results. Corruption results in economic inefficiency and loss of
manufacturer and consumer surplus, because of its adverse effect on the allocation of funds on production and
on consumption. Numerous studies have established that corruption has significant impact on private fixed
domestic investment behaviour (Mauro (1995, 1997), Brunetti and Weder (1998), Campos et al (1999), Rock
and Bonnett 2004; Al-Marhubi, 2000; de Honlonkou, 2003; Ades and Di Tella, 1997; Tanzi and Davoodi, 1997;
Murphy et al., 1993). In contrast, recently Makochekanwa (2014) finds corruption as the grease that enhances
efficiency in Zimbabwe. Therefore the expected sign of effects of corruption on private fixed investment in
Zimbabwe’s private sector cannot be determined a prior.
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Firm uncertainty (FIRMUt)
The research uses inflation is used as a measure of firm uncertainty in line with a number of empirical
studies that indicate that a rise in inflation leads to growing uncertainty on firms’ investment decisions and
reduces their propensity to invest in long term projects (see e.g. Ben et al., 2016; Fisher, 2009; Byrne and Davis,
2004; Tanzi and Davoodi, 2002; Kalckreuth, 2000; Mauro, 1995; Ferderer, 1993; Serven and Solimano, 1993;
Pindyck and Solimano, 1993). The level of firm uncertainties increase firm’s transaction and production costs,
reduces business confidence over the returns to fixed capital, and thereby deters private fixed domestic
investment (Shleifer and Vishny, 1993; Wei, 1997 and Campo et al., 1999). Zimbabwe has been experiencing
episodes of disinflation, deflation and creeping inflation during the period of study. We therefore expect a
negative and significant relationship between firm uncertainty as proxied by inflation and private fixed domestic
investment.
Private foreign fixed inflows (FDIt-1)
FDIt-1 is measured as the ratio of private FDI inflows to the GDP. We opted for this ratio rather than the
log of FDI inflows since the latter measure is itself a component of private fixed investment and thus may be
endogenous within the PFDI equation which may lead to biasedness (Herzer et al., 2008). The inclusion of this
variable is important because, not only do private FDI inflows ease the financing constraints of domestic firms,
but they also generate crowding in effects by creating linkages and positive externalities. In earlier studies,
questions have been raised, as to the extent to which private FDI inflows crowd-out of domestic firms due to the
comparative advantages which large MNFs have over credit rationed domestic firms (see Balassa, 1967; Kravis,
1971; Caves, 1971; Dunning, 1977). However, in recent years with greater number of recent studies
acknowledge the benefits of private FDI inflows to developing countries such as; upgrading of the capital stock,
introduction of new technologies, and enhancement of competitiveness in the economy. (see for example
Bjorvatn et al., 2016; Bellos and Subasat, 2016; Miankhel et al., 2016; Havranek and Irsova, 2015; Agrawal,
2015; Lengerts and Merlevede, 2014; Feeny et al., 2014; Allen and Aldrid, 2013; Conconi et al., 2013).
Zimbabwe has been experiencing low private FDI inflows for the past two decades and therefore a negative but
significant relationship between private FDI inflows and private fixed investment is anticipated. This variable
was also used by other previous studies (see Trela and Whalley, (1992), Engen and Skinner, Page 247 (1996),
Gordon and Li, (2002), Stoilova and Patonov, (2012), Veronika and Lenka, (2012), Nantob, (2014), and Hunady
& Orviska, (2015).
Rate of domestic savings (Dsavingst)
Rate of domestic savings are measured as a percentage of GDP. Private fixed domestic investment in firms
can be financed through both domestic and private FDI inflows. However, given the macroeconomic challenges
bedevilling Zimbabwe that include low access to external lines of credit and low private FDI inflows, firms tend
to rely more on domestic savings for fixed business spending. The classical and neo-classical growth models
postulate that adequate mobilisation ofdomestic savings are vital for the growth of private fixed domestic
investment (Solow-Swan, 1956; Domar, 1946; Frankel, 1962; Romer 1986; Harrod, 1939; Ramsey, 1928; Cass,
1965; Koopmans, 1965). However, Kendrick (1993 argues that domestic savings which are not properly
intermediated and extended as credit to firms is unlikely to play a direct role in the growth of private dome sic
investment. Savings rates in Zimbabwe are traditionally very low and therefore the study postulates that low
savings rates means low private fixed domestic investment. The traditional low domestic savings rates and high
lending rate levied by financial institutions in Zimbabwe is not conducive to the promotion of private fixed
domestic investment. We therefore anticipate a negative coefficient sign indicating that a decrease in domestic
savings is likely to affect PFDI in the same direction.
IV. RESULTS AND DISCUSSION
Stationarity
All the probability value of Augmented Dickey Fuller (ADF) statistic were compared to 0.01, 0.05 and
0.10. Any probability value of a variable below these three values was considered to be stationary. As per
Appendix B, all variables except lagged GDP were stationery at 5% level of significance level. Other variables
were stationery at 1 % level of significance. Inflation, a proxy for firm uncertainties and domestic savings were
differenced twice and become stationary at 1% level of significance.As per table A, the highest relationship that
is close to collinearity is that between corruption and domestic savings. The findings are shown in regression
output as per appendix C. The R-squared was found to be 81% indicating a parsimonious model that is able to
explain variations in the regressors. Before the interpretation of the results various model diagnostic tests such
as; heteroscedasticity, tests for normality, multicollinearity and the Ramsey specification tests were carried out
in order to test the robustness of the final model.
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The lagged GDP was found to positive and statistically significant at 5 %. The coefficient is 0.53284
indicating that a 1% increase in the GDP will result in 53% increase in private fixed domestic investment. When
private domestic firms decided to expand the level of productive capacity they consider the size of the market as
earlier predicted by Hicks (1951 and Clark (1917). As the economy grows it induces the private sector to
increase their output in anticipation of increasing aggregate demand. A number recent studies in most
developing countries have confirmed a positive relationship between GDP and private fixed investment
behaviour of firms (for example Nkurikiye and Uwizeyimana (2016), Eddine et al(2014), Atif and Ahmed
(2014) Gabriel (2013), Kazeem and Olukena (2012), Bloom et al (2012), Bakare (2011)Harron and Naser
(2011) and Buccirossi et al(2011). However our findings are not confirmed by studies done in OECD countries
for the period 1980-1985, find a negative effect of taxation on economic growth. Leibfritz et al 1997).
The rate of domestic savings was found to be positive and significant at 10% even though the expected sign
was negative. The result is not surprising since both the classical and neo-classical growth models postulate that
domestic savings are indeed the nucleus for faster private fixed investment growth (Solow-Swan, 1956;
Ramsey, 1928; Cass, 1965; Koopmans, 1965; Harrod, 1939; Domar, 1946; Frankel, 1962 and Romer, 1986).
The findings are confirmed by a number of recent studies that find the relationship robust and significant (see
Sakyi et al., 2016; Kanu and Ozurumba, 2014; Nasiru and Haruna, 2013; Obi et al., 2012; Bakare, 2011;
Frimpong and Marbuah, 2010). Business uncertainties proxied by rate of inflation was found to be positive and
significant at 5% level. The coefficient is 0.025467 indicating that low business uncertainty are expected to
increase private fixed domestic investment by 3% (note according to PCI measure positive figure means low).
Our findings are supported by a number of empirical studies that used inflation as a proxy for uncertainty (for
example Aghion et al (2010), Fisher (2009), Khan, et al (2006); Byrne and Davis (2004); Rousseau and
Wachtel, (2002), Solimano (1993), Serven and Solimano (1993) and Pindyck and Solimano (1993). Taxation
revenue was found to be positive and significant at 10% level. The expected sign was negative.
Our findings do not confirm private foreign direct investments as factors that influence the level of private
fixed domestic investment in Zimbabwe. In his PhD. thesis, Cashin (1994) examines the impact of public
investment, public transfers and distorting taxes (all taxes except lump sum taxes) on the growth rate, by using
an endogenous growth model. The model that the author uses indicates that distorting taxes have a strong
negative impact on growth. Theoretical implications of the model were tested on a sample of 23 developed
countries in the period from 1971 to 1988, where the share of current budget revenue in GDP was used as a tax
variable. The econometric results confirmed the theoretical findings. Same as Xu, Cashin concluded that taxes
reduce the marginal return on private capital, thus reducing the economic growth. On the other hand, a
productive public spending in a form of public investments and transfer payments stimulates the growth. The
author further concludes that, in countries with a small-scale state (low share of public spending in GDP), a
positive impact of public investments on economic growth is predominant, whereas in the case of large-scale
states a reducing impact of distorting taxes on growth is predominant
V. CONCLUSIONS AND RECOMMENDATIONS
The paper investigated the impact of taxation on private fixed domestic investment in Zimbabwe for the
period 1998 to 2015 using domestic savings, taxation revenue, business uncertainty and FDI inflows as
variables. The level of taxation revenue was found to be positive and significant. The results suggest that
taxation revenue that are channelled to productive public expenditure such as roads, bridges, rail, energy,
transport and other communication systems are likely to stimulate the productivity of private fixed domestic
investment. Whilst the government harvests huge taxation revenue we recommend that policy makers introduce
investment tax credits and accelerated depreciation allowances so as to lessen the heavy excess burden on a few
firms. For instance, a reduction in capital gains taxes would lessen the distortionof new domestic savings by
reducing the tax wedge imposed on some of thefuture income from that saving. A higher corporate tax burden
should be matched by well-developed public infrastructure, public services and other host country attributes
attractive to business, including market size.The primary challenge is to strike a balance in devising rules to
adequately protect the tax base without imposing excessive compliance cost on firms. Conversely, rather than
reducing the burden of general tax provisions on firms the policy makers must explicitly target tax relief to
certain sectors or activities such as manufacturing and mining in order, to encourage investment at lower foreign
revenue cost. In addition, the governments must improve the business friendliness of the tax administration by
improving the transparency and certainty of tax treatment. But even without robust empirical results, most of the
researchers will agree that tax reforms which stimulate neutrality in taxation by lowering tax rates, increasing
tax base, decreasing tax exemptions and building such tax structure that distorts incentives for accumulation of
labour and capital to the least extent, can stimulate the growth of output and employment.
12. American Journal of Humanities and Social Sciences Research (AJHSSR) 2018
A J H S S R J o u r n a l P a g e | 37
APPENDICES
Appendix A: CORRELATION MATRIX
LN_TAX INF GDPT_1 FDI DS CORR
LN_TAX 1.000000
INF 0.306142 1.000000
GDPT_1 0.355288 0.592961 1.000000
FDI 0.397098 0.305019 0.504095 1.000000
DS 0.420866 -0.449098 0.147748 0.184673 1.000000 0.788510
CORR 0.488765 -0.347748 0.228211 0.395102 0.848510 1.000000
Source: own computation
Appendix B: STATIONARITY TESTS USING ADF
Variables t-ADF Critical-1% Critical-5% Conclusion
DPFDI -7.291754* -4.057910 -3.119910 I(1)
DLn Tax -4.170845* -4.121990 -3.144920 I(2)
DGDPt-1 -3.373256** -4.057910 -3.119910 I(1)
DFDI -6.911760* -4.057910 -3.119910 I(1)
DDS -4.268035* -4.297073 -3.212696 I(2)
DDINF -6.242802* -4.121990 -3.144920 I(2)
DCORR -4.294142* -3.200056 -3.175352 I(1)
Source: own computation
Appendix C: REGRESSION OUTPUT
Dependent Variable: DPFDI
Method: Least Squares
Date: 08/23/17 Time: 12:50
Sample (adjusted): 2000 2012
Included observations: 13 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
DGDPT_1 0.53284 0.184253 2.891945 0.0276
DFDI 0.849085 0.809241 1.049236 0.3345
DDS 0.677247 0.173563 3.902015 0.0080
DDINF 0.025467 0.008926 2.853171 0.0291
DDLN_TAX 8.258724 2.071720 3.986409 0.0072
DCORR -22.62545 5.606561 -4.035530 0.0068
C -0.255706 1.177792 -0.217106 0.8353
R-squared 0.817921 Mean dependent variance 1.534305
Adjusted R-squared 0.635842 S.D. dependent variance 5.919969
S.E. of regression 3.572436 Akaike info criterion 5.688106
Sum squared resid 76.57380 Schwarz criterion 5.992309
Log likelihood -29.97269 Hannan-Quinn criterion. 5.625578
F-statistic 4.492118 Durbin-Watson statistics 1.785948
Prob(F-statistic) 0.045078
Source: own computation
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