FISCAL RESPONSES TO THE COVID-19 PANDEMIC THROUGH REDESIGNING OF CORPORATE INCOME TAX IN THE REPUBLIC OF SERBIA
DOI:
https://doi.org/10.7251/ZREFIS2122037DKeywords:
corporate income tax, corporate tax incentives, Serbia, COVID-19Abstract
Corporate income tax (CIT) is a fundamental tool of the fiscal system due to its sensitivity to economic cycles and the impact it can have on the economic decisions of enterprises. Although the justification of corporate income tax has been called into question in the current academic literature, it is one of the tax forms that can be used to stabilize and develop the economy, especially after the crisis. For this reason, this paper provides an analysis of corporate income tax in Serbia. The paper will focus on reduced CIT rates and tax incentives. Our work aims to contribute to the literature in two aspects. The first is to provide evidence that it is necessary to carry out parametric reform of corporate income tax. Another is providing additional literature on the COVID-19 crisis to form the basis for further economic research.References
Albi, Emillio. 2010. Impuesto sobre Sociedades: la investigation economica y los criterios para su reforma en España document 13/10. Instituto de Estudios Fiscales, Madrid.
Ali, Shajeea Arshad, Mariam Baloch, Naseem Ahmed, Asadullah Ali, and Ayman Iqbal. 2020. ‘’The outbreak of Coronavirus Disease 2019 (COVID-19)—An emerging global health threat.’’ Journal of infection and public health 13(4): 644-646.
Arnold, Jens Matthias. 2008. ‘’Do tax structure affect aggregate economic growth? Empirical evidence from panel of OECD countries.’’ OECD Economics Department Working Papers, no. 643.
Arsić, Milojko, and Saša Ranđelović. 2017. Ekonomija oporezivanja: teorija i politika. Beograd: Ekonomski fakultet.
ATAF. 2020. Suggested covid-19 measures for revenue authorities. The African Tax Administration Forum. https://irp-cdn.multiscreensite.com/a521d626/files/uploaded/COVID-19%20Measures%20Final%20English.pdf.
Atkinson, Anthony. B., and Joseph E. Stiglitz. 2015. Lectures on Public Economics: Updated Edition. Princeton University Press.
Azhar, B. A., and Sharuf Sharif. 1974. ‘’The effects of tax holiday on investment decisions: an empirical analysis.’’The Pakistan Development Review 13(4): 409-432.
Boadway, Robin W., and Anwar Shah. 1995. ‘’Perspectives on the role of investment incentives in developing countries.’’ Fiscal Incentives for Investment and Innovation 31-137.
Bunn, Daniel. 2018. ‘’Corporate income tax rates around the World.’’ Washington: Tax foundation Fiscal fact No. 623.
Dackehag, Margareta, and Asa Hansson. 2012. ‘’Taxation of Income and Economic Growth: An Empirical Analysis of 25 Rich OECD Countries.’’ Department of Economics, Lund University, Sweden Working Paper No. 6.
Delgado, Francisco J., Elena Fernandez-Rodriguez, and Antonio Martinez-Arias. 2014. ‘’Effective tax rates in corporate taxation: A quantile regression for the EU.’’ Engineering Economics 25(5): 487-496.
Devereux, Michael P., Rachel Griffith, and Alexander Klemm. 2002. ‘’Can international tax competition explain corporate income tax reforms?’’ Economic Policy 17(35): 449-495.
Dimitrijević, Marina. 2015. ‘’Pravičnost I aktuelno modeliranje poreskih sistema u svetu.’’ Zbornik radova Pravnog fakutleta u Nišu 54(70): 277-292.
Đurović Todorović, Jadranka, Marina Đorđević, and Milica Ristić. 2019. Struktura savremenih poreskih sistema. Niš: Ekonomski fakultet.
Etale, Lyndom M., and Paymaster F. Bingilar. 2016. ‘’The impact of company income tax and value added tax on economic growth: Evidence from Nigeria.’’ European Journal of Accounting, Auditing and Finance Research 4(7): 106-112.
Fujii, Dimitri, and Curtis Huffman. 2008. ‘’Los programas de estímulos fiscales en México, 2001-2005.’’ Investigación económica 67(264): 131-165.
Gordon, Roger H., and Wei Li. 2011. ‘’Provincial and local governments in China: Fiscal institutions and govrnment behavior.’’ NBER working paper no. W16694. https://www.nber.org/papers/w16694.pdf
Graham, John, and Cliford Smith. 1999. ‘’Tax incentives to hedge.’’ The Journal of Finance 54(6): 2241-2262. https://doi.org/10.1111/0022-1082.00187
Grant, Simon. 2003. ‘’Risk Assessment and SARS.’’ Public Lecture, National Institute of Economics and Business, The Australian National University 28. July.
Gupta, Mirnal, Ayman Abdelmaksoud, Mohammad Jafferany, Torello Lotti, Roxanna Sadoughifar, and Mohamad Goldust. 2020. ‘’COVID-19 and Economy.’’ Dermatologic Therapy 33. https://doi.org/10.1111/dth.13329
Hanappi, Tibor. 2018. ‘’Corporate effective tax rates: model description and results from 36 OECD countries and non-OECD countries.’’ OECD taxation working papers No. 38.
Hanna, Donald, and Yiping Huang. 2004. ‘’The Impact of SARS on Asian Economies.’’ Asian Economic Papers 3(1): 102-112. https://www.mitpressjournals.org/doi/pdfplus/10.1162/1535351041747978
Holland, David, and Richard J. Vann. 1998. ‘’Income Tax Incentives for Investment.’’ Tax Law Design and Drafting 2(23): 1-32. https://www.imf.org/external/pubs/nft/1998/tlaw/eng/ch23.pdf .
Ihenyen, Joel, and Ebipanipre Gabriel Mieseigha. 2014. ‘’Taxation as an instrument of economic growth.’’ Information and Knowledge Management 4(12): 49-53.
International Monetary Fund. 2020. Economics Outlook. A Long and Difficult Ascent. Washington.
Jin, Hao, Ligong Lu, Junwei Liu, Min Cui. 2020. ‘’Complex emergencies of COVID-19: management and experience in Zhuhai.’’ International Journal of Antimicrobial Agents 55(5) https://europepmc.org/article/pmc/pmc7270772.
Kang, Dayun, Hyunho Choi, Jonh Hun Kim, and Jungsoon Choi. 2020. ‘’Spatial epidemic dynamics of the COVID-12 outbreak in China.’’ International Journal of Infectious Diseases 34: 96-102. https://doi.org/10.1016/j.ijid.2020.03.076
Klemm, Alexander, and Stefan Van Parys. 2009. ‘’Empirical Evidence on the Effects of Tax Incentives.’’ IMF Working paper No. 09/136. https://www.imf.org/external/pubs/ft/wp/2009/wp09136.pdf
Koester, Reinhard, nad Roger C. Kormendi. 1989. ‘’Taxation aggregate activity and economic growth: Cross country evidence.’’ Jornal of Monetary Economics 16: 141-163.
Kovač, Milan. 2003. ‘’Analiza poreskih podsticaja za privlačenje SDI u Srbiji, Bugarskoj i Hrvatskoj.’’ Industrija 31(1-2): 53-60. https://scindeks-clanci.ceon.rs/data/pdf/0350-0373/2003/0350-03730302053K.pdf
Lee, Jong Wha, and Warwick McKibbin. 2004. ‘’Estimating the global economic costs of SARS. Learning from SARS: Preparing for the Next Disease Outbreak: Workshop Summary.’’ Washington, DC: National Academies Press (US) 92–109. https://www.ncbi.nlm.nih.gov/books/NBK92473/
Lee, Jong Wha, and Warwick McKibbin. 2012. ‘’The Impact of SARS.’’ China: New Engine of World Growth 19-33. https://www.researchgate.net/profile/Warwick_Mckibbin/publication/323802181_The_impact_of_SARS/links/5ac326b3aca27222c75d272b/The-impact-of-SARS.pdf
Li, Jie, Jun Justin Li, Xiaorou XIe, Xiaomei Cai, Jian Huang, Xuemei Tian, nad Hong Zhu. 2020. ‘’Game consumption and the 2019 novel coronavirus.’’ The Lancet Invectious Diseases 20(3): 275-276. https://doi.org/10.1016/S1473-3099(20)30063-3
Lv, Bingyang, Yongzheng Liu, and Yan Li. 2020. ‘’Fiscal incentives, competition, and investment in China.’’ China Economic Review 59: 101371.
Macek, Rudolf. 2014. ‘’The impact of taxation on economic growth: Case study of OECD countries.’’ Review of Economic Perspectives 14(4): 309-328.
Maffini, Giorgia, Jing Xing, nad Michael P. Devereux. 2019. ‘’The impact of investment incentives: evidence from UK corporation tax returns.’’ American Economic Journal: Economic Policy 11(3): 361-89.
Maffioli, Elisa M. 2020. ‘’How Is the World Responding to the 2019 Coronavirus Disease Compared with the 2014 West African Ebola Epidemic? The Importance of China as a Player in the Global Economy.’’ The American Journal of Tropical Medicine and Hygiene 1-3. https://doi.org/10.4269/ajtmh.20-0135
Mauda, Ahmed Bakari, and Sani Alhaji Saidu. 2019. ‘’Impact of Tax Incentives on Firms performance: Evidence from Listed Consumer Companies in Nigeria.’’ Sri Lankan Journal of Business Economies 8(2): 21-32. http://mgt.sjp.ac.lk/bec/wp-content/uploads/2020/02/Sri-Lankan-Journal-of-Business-Economics-SLJBE-Vol.-08-2-2019-Nov-Article-02.pdf
May, Ben. 2020. ‘’Overview: Outlook darkens as coronavirus spreads.’’ World Economic Prospects Monthly Economic Outlook 44(3): 1-33.
McKibbin, Warwick, and Rochen Fernando. 2020. ‘’The Global Macroeconomic Impact of COVID-19.’’ Centre for Applied Macroeconomic Analysis, Australian National University Working Paper 19. http://www.sensiblepolicy.com/download/2020/2020WorkingPapers/2020_19_CAMA_COVID19_mcKibbin_fernando_0.pdf
Megersa, Kelbesa. 2020. Tax Reforms After COVID-19 and Financial Crises. K4D Helpdesk Report 809. Brighton, UK: Institute of Development Studies.
Mertens, Karel, and Morten O. Ravn. 2013. ‘’The dynamic effects of personal and corporate income changes in the United States.‘’ American Economic Review 103(4): 1212-1247.
Ministry of Finance 2020. Bulletin of public finances of the Republic of Serbia. https://www.mfin.gov.rs/aktivnosti/bilten-javnih-finansija-za-mesec-jun-2020/.
Minz, Jack M.. 1990. ‘’Corporate Tax Holidays and Investment.’’ The world bank economic revew 4(1): 81-102. https://doi.org/10.1093/wber/4.1.81
Mitchell, Dan, and Heritage Foundation. 2004. ‘’Tax competition and fiscal reform: rewarding pro-growth tax policy.’’ Prepared for “A Liberal Agenda for the New Century: A Global Perspective,” a Conference cosponsored by the Cato Institute, the Institute of Economic Analysis and the Russian Union of Industrialists and Entrepreneurs, April 8-9, 2004, Moscow, Russian Federation.
Mutti, John. 2003. Foreign Direct Investment and Tax Competition. Washington: Institute for International Economics.
Myles, Gereth D. 1995. Public economics. Cambridge: University press.
Nicodeme, Gaetan, Antonella Caiumi, and Ina Majewski. 2018. ‘’What Happened to CIT Collection? Solving the rates-revenues puzzle.’’ European commission: Taxation and Customs Union Working Paper 74.
OECD. 2020. Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience. Paris. https://read.oecd-ilibrary.org/view/?ref=128_128575-o6raktc0aaandtitle=Tax-and-Fiscal-Policy-inResponse-to-the-Coronavirus-Crisis
Ohno, Taro, Masaki Hotei, Eiihiro Sato, and Chie Umezaki, C. 2015. ‘’Decomposition of the Variation of Corporate Tax Revenue: Based on Consideration of Corporate Tax Paradox.’’ Public Policy Review, Policy Research Institute, Ministry of Finance Japan 11(2): 333-360. https://ideas.repec.org/a/mof/journl/ppr028e.html
Padovano, Fabio, and Emma Galli. 2001. ‘’Tax rates and economic growth on the OECD countries.’’ Economic Inquiry 39: 44-57.
Plosser, Charles I.. 1992. The search for growth, in Policies for long run growth. Kansas City: Federal Reserve Bank of Kansas City.
Romer, Christina, and David Romer. 2010. ‘’The Macroeconomic Effects of Tax Changes: Estimated Based on a New Measure of Fiscal Schocks.’’ American Economic Review 100(3): 763.
Rosen, Harvey S., and Ted Gayer. 2009. Deficit finance. NY: McGraw-Hill/Irwin
Shah, Anwar. 1995. Fiscal incentives for investment and innovation. Washington, D.C.: The World Bank. http://documents.worldbank.org/curated/en/419911468774867894/pdf/multi-page.pdf
Šimović, Hrvoje, and Mihelja M. Žaja. 2010. ‘’Tax incentives in western Balkan countries.’’ International Journal of Social, Behavioral, Educational, Economic, Business and Industrial Engineering 4(6): 731-736.
Šimović, Hrvoje, and Vjekoslav Bratić. 2009. ‘’Efficiency of tax incentives in Croatia.’’ Economic Policy and Global Recession 157-166. https://bib.irb.hr/datoteka/428219.simovic-bratic_Beograd_2009.pdf
Slemrod, Joel. 1995. ‘’What do cross country studies teach about government involvement prosperity, and economic growth?’’ Brookings Paper on Economic Activity 373-431.
Službeni glasnik RS. 2001. Zakon o porezu na dobit pravnih lica. No. 25/2001 and 86/2019. https://www.paragraf.rs/propisi/zakon_o_porezu_na_dobit_pravnih_lica.html
Sokolovska, Olena, and Sergei Belozyorov. 2019. ‘’Taxation of digital corporations: options for reforms.’’ In 2nd International Scientific conference on New Industrialization: Global, national, regional dimension (SICNI 2018). Atlantis Press.
Stoilova, Desislava, nad Nikolay Patonov. 2012. ‘’An empirical evidence for the impact of taxation on economic growth in the European Union.’’ Book of Proceedings Tourism and Management Studies International Conference 3: 1031-1039.
Suárez Serrato, Juan Carlos, and Owen Zidar. 2018. ‘’The structure of state corporate taxation and its impact on state tax revenues and economic activity.’’ Journal of Public Economics 167(C): 158-176. https://doi.org/10.1016/j.jpubeco.2018.09.006.
Tax Foundation. 2018. Corporate Income Tax Rates around the World No. 623. Washington.
Thielemans, Ann, and Desire L. Massart. 1985. ‘’The use of component analysis as a display method in the interpretation of analytical chemical, biological, environmental and epidemiological data. ‘’ Chimia 39: 236-242. https://link.springer.com/article/10.1007/BF00392834.
Velavan, Thirumalaisamy P., and Christian G.Mayer. 2020. ‘’The COVID—19 epidemic.’’ Tropical Medicine and International Health 25(3): 278-280. https://doi.org/10.1111/tmi.13383
Widmalm, Frida. 2001. ‘’Tax structure and growth: Are some taxes better than others?’’ Public Choice 107: 199-219.
Xiong, Wei. 2018. ‘’The Mandarin model of growth.’’ NBER working paper W25296.
Xu, Chenggang 2011. ‘’The fundamental institutions of Chins reforms and development.’’ Journal of Economic Literature 49(4):221-240. http://wxiong.mycpanel.princeton.edu/papers/Mandarin.pdf .
Zee, Howell, Janet G. Stotsky and Eduardo Ley. 2002. ‘’Tax Incentives for Business Investment: A Primer for Policy Makers in Developing Countries.’’ World Development, 30(9): 1497-1516. https://doi.org/10.1016/S0305-750X(02)00050-5
Zhang, Lei, and Yunhui Liu. 2020. ‘’Potential interventions for novel coronavirus in China: A systematic review.’’ Journal of Medical Virology 92: 479-490. https://doi.org/10.1002/jmv.25707.
Downloads
Published
Issue
Section
License
Copyright (c) 2021 Zbornik radova Ekonomskog fakulteta u Istočnom Sarajevu
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
