Tax Competition between Symmetric Countries for Large Asymmetric Investors

In a dynamic two-period game between two symmetric countries, we show that a unique subgame-perfect equilibrium arises during the initial stage of the game. A mixed taxation regime arises in the equilibrium where one country adopts a non-preferential taxation regime while its competitor adopts a preferential taxation regime. The country with a non-preferential taxation regime earns a higher tax revenue compared to the country with a preferential taxation regime. A tax holiday does not arise during the initial stage of the game when the size of the mobile capital base that enters during the later stage is considerably larger than the size of the mobile capital base that enters the economy during the initial stage. We provide the complete characterization and proof of the uniqueness of the mixed strategy Nash equilibrium.JEL classification: F21, H21, H25, H87

Menarik Investasi Ke Indonesia Dengan Tax Holiday

This research contains about how tax holiday as one of the tax incentives used by the Indonesian government to attract investment Ease of Doing Business index (EoDB) released by the World Bank. Tax holiday is expected to be able to provide a positive signal to investors that Indonesia is the right country to invest in. In this paper it was found that tax holidays are not capable of attracting investment alone, but other factors are needed in order for tax holidays to be successful in attracting investment. Penelitian ini berisi tentang bagaimana tax holiday sebagai salah satu insentif pajak yang digunakan oleh pemerintah Indonesia untuk menarik investasi Karena pajak merupakan salah satu yang menjadi perhitungan dalam indeks kemudahan bisnis yang dirilis oleh Bank Dunia. Tax holiday diharapkan mampu memberikan sinyal positif kepada para investor bahwa Indonesia adalah negara yang tepat untuk berinvestasi. Dalam penelitian ini dtemukan bahwa tax holiday tak mampu sendirian menarik investasi, akan tetapi dibutuhkan faktor-faktor lain agar tax holiday berhasil menarik investasi,

The Effect of Tax Incentives Practices on Sustainability of Micro, Small and Medium Enterprises in Ethiopia During the Outbreak of Corona Virus Pandemic

Purpose: The aim of this study was to identify the effect of tax incentive practise on sustainability of MSMEs during outbreak of corona virus pandemic in Ethiopia. Design/methodology/approach: In order to achieve this objective, the researchers have employed quantitative research approach with explanatory research design in which six hypotheses have been tested. The primary data was collected from 300 respondents using structured questionnaires. Multiple regression model was employed to identify the effect of tax incentives on sustainability of MSMEs in Ethiopia. Findings: According to the regression analysis, this study revealed that tax holiday, tax allowance, reduction in tax rate, accelerated depreciation, loss carry forward and tax exemption have positive and statistically significant effect on the sustainability of the MSMEs. Based on the finding of the study was concluded that the existence of tax incentive practice has positive contribution to sustainability of the micro, small and medium sized enterprise.Research limitations/implications: The current study was geographically focus on Ethiopia by considering the micro, small and medium sized enterprises sector. The subject wise was focused on the effect of the tax incentives:(tax holiday, tax allowance, tax exemption, and accelerated depreciation, reduction in tax rate, and loss carry forward) and on the sustainability of MSMEs. The study used primary data which is limited to a year of 2020. It might be improved in the future if other researchers incorporate large firms in the country and uses secondary data for analysis. Practical implications: To survive, micro, small and medium scale enterprises need the support from the government in the form of tax incentives. The role of tax incentives in enhancing the growth of micro, small and medium sized enterprises is very significant on the sustainability of MSMEs as well as the economy as a whole. Hence, the findings and recommendations of the current study might serve as an ingredient and be informative to the policy makers on MSMEs sector. It might also give a general insight to the policy makers, academician and professional groups of society and the public at large with regard to the role of effect of tax incentives on the sustainability and growth of MSMEs during outbreak of coronavirus.Originality/value: This study contributes to empirical evidence about the effect of tax incentives practices on sustainability of micro, small and medium enterprises in Ethiopia by considering tax incentive practice in terms of tax holiday, tax allowance, reduction in tax rate, accelerated depreciation, loss carry forward and tax exemption. As tax incentives theories supported the findings of this study, we have concluded that tax incentive practices provided by government have positive contribution for the sustainability and growth of micro, small and medium sized enterprises in Ethiopia

DAMPAK KEBIJAKAN TAX HOLIDAY PADA ALIRAN MASUK FDI INDUSTRI PIONIR DI INDONESIA

ABSTRACTIn 2011, the Indonesian government issued a Tax Holiday policy as an incentive to attract investment. However, the policy is still considered not optimal in increasing FDI realization in Indonesian pioneer industry. This study aims to analyze the influence of the Tax Holiday policy in increasing the realization of direct investment in Indonesian pioneer industry; as well as to investigate other factors influencing the inflow of Foreign Direct Investment (FDI) in the industry. The results of descriptive analysis and VECM show that Tax Holiday policy has increased the realization of direct investment of pioneer industries in 2012 and 2014 by 5.17% and 4.66%, respectively. In addition, there are other factors that influence the FDI inflow to the Indonesian pioneer industry, namely: GDP, economic openness, labor force participation, loan interest rates, exchange rates, and per-capita GDP. Maintaining the stability of these factors is important to support Tax Holiday's policy in increasing direct investment activities in Indonesia pioneer industry.Keywords: tax holiday; Foreign Direct Investment; Indonesian pioneer industry