The Effect of Investment Tax Incentives: Evidence from China’s Value-Added Tax Reform

The objective of this study is to empirically investigate the effect of tax revenue and years tax reforms on government expenditure in Nigerian. Tax revenue were explained using custom and excise duties, company income tax, value-added tax and tax reforms explained by the years in which reforms took place measured by dummy variables as proxies. In conducting this research, an annual time series data from central bank statistical bulletins and Federal Inland revenue Service of Nigeria spanning from 1994-2017 were employed. The data were tested for stationarity using the Augmented Dicker-Fuller Unit Root Test and found stationary at first difference. The Johansen co-integration test was also conducted and showed that the variables are co-integrated at the 5% level, which implied that there is a long-run relationship between the variables in the model. The presence of co-integration spurred the use of vector error correction model and VEC granger causality to determine the effects and decision for the study objective. Findings revealed that Customs and Excise Duties has positive (3.96) and significant (-8.38) impact on government expenditure at 5% level of significance (t=8.38>1.96), Company Income Tax has negative (-1.25) and significant (2.98) impact on government expenditure at 5% level of significance (t=2.98>1.96), Value added tax has positive (8.54) and significant (3.90) impact on government expenditure at 5% level of significance (t=3.90>1.96) and Tax reforms periods has negative(-3.52E+12) and significant (8.39) impact on government expenditure at 5% level of significance (t=8.39>1.96). The study thus concluded that tax revenue and tax reforms significantly affect the Nigerian economy with the direction of causation running from government revenue to government expenditure, supporting the revenue-spend or tax-spend hypothesis. It was recommended while seeking to increase its revenue base via tax should also increase their expenditure profile to create a balance with the tax revenue and every other tax reform should be geared towards this balance.

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The Stagnant Export Upgrading in Northeast China: Evidence from Value‐added Tax Reform

China & World Economy ◽

10.1111/cwe.12341 ◽

2020 ◽

Vol 28 (4) ◽

pp. 101-126 ◽

Cited By ~ 2

Author(s):

Yan Du ◽

Mengkai Yang ◽

Jing Li ◽

Yunong Li

Keyword(s):

Northeast China ◽

Tax Reform ◽

Value Added ◽

Value Added Tax

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Book Reviews

Journal of Economic Literature ◽

10.1257/jel.50.4.1106.r5 ◽

2012 ◽

Vol 50 (4) ◽

pp. 1117-1119

Keyword(s):

Tax Reform ◽

Value Added ◽

Capital Gains ◽

American Enterprise Institute ◽

Tax Rates ◽

Value Added Tax ◽

A Value ◽

History Of ◽

The Business Cycle ◽

Federal Taxes

Alan D. Viard of American Enterprise Institute reviews, “The Benefit and the Burden: Tax Reform--Why We Need It and What It Will Take” by Bruce Bartlett. The EconLit Abstract of this book begins: “Explores the fundamentals of taxation at the simplest level and considers the question of tax reform. Discusses a brief history of federal income taxation; how a tax bill is made; the definition of income; how to understand tax rates; the relationship between tax rates and tax revenues; how taxes affect economic growth; the question of progressivity; taxes and the business cycle; how other countries tax themselves; spending through the tax code; taxes and the health system; tax preferences for housing; how federal taxes affect the states; the problem of charitable contributions; the problem of taxing capital gains; some unresolved issues in the taxation of corporations; the problem of tax administration; the history of tax reform; the pros and cons of popular tax reform proposals; the need for more revenue; the case for a value-added tax; the case against a value-added tax; what should be done about the Bush tax cuts; and whether tax reform will happen because Grover Norquist permits it. Bartlett is an economic columnist. Index.”

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Fiscal Decentralization and Environmental Infrastructure in China

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2013-0082 ◽

2013 ◽

Vol 13 (2) ◽

pp. 733-759 ◽

Cited By ~ 3

Author(s):

Antung Liu ◽

Junjie Zhang

Keyword(s):

Economic Development ◽

Tax Reform ◽

Fiscal Decentralization ◽

Sewage Treatment ◽

Value Added ◽

Value Added Tax ◽

Chinese Cities ◽

Fiscal Incentives ◽

New Evidence ◽

Environmental Infrastructure

Abstract This article provides new evidence that fiscal decentralization has supported economic development by incentiving cities to provide more sewage infrastructure. As a result of the 1994 tax reform, Chinese cities retained different shares of their value-added tax (VAT). Exploiting the persistence of this sharing system, we use the VAT share in 1995 as an instrument for the present fiscal incentives. We find that cities with higher fiscal incentives built significantly more sewage treatment capacity between 2002 and 2008. This result suggests that fiscal incentives can play a strong role in the development of city-level infrastructure.

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