4.2. Tax Policy Tools
The state's participation in the regulation of economic processes in the conduct of tax policy is carried out with the help of tax instruments such as the tax rate, tax incentives, tax sanctions, the tax base and some others.
An important means of implementing state policy in the field of revenue management is the tax rate that determines the percentage of the tax base or part of it, the monetary value of which is the amount of tax. Changing it, the government can, without changing the whole array of tax laws, implement tax regulation. A tangible effect of the tax policy is achieved by differentiating tax rates for certain categories of taxpayers in certain regions, for individual industries and enterprises. The tax rate provides relative mobility of financial legislation, allows the government to quickly and effectively implement a change in priorities in the policy of revenue regulation.
As VV Panskov notes, the role of the tax rate for the implementation of public policy is the possibility of using different tax rates: proportional, progressive and regressive. Particularly significant are progressive and regressive rates, through which not only the level of income of various categories of taxpayers is regulated, but also the generation of budget revenues at various levels.
As a result of the use of a flexible system of tax rates, a centralized unified tax system can be formed in such a way as to be flexible enough and correspond to the emerging real economic situation.
In addition to tax rates, tax benefits are an effective means of implementing the tax policy, which is associated with the granting of full or partial exemption from taxation for certain categories of legal entities and individuals. >
An effective tax policy is also promoted by the fact that the law may provide for numerous and varied grounds for granting tax benefits,
associated with types and forms of entrepreneurial activity. Tax incentives used in the world practice of taxation are difficult to systematize, since they can be established in any cases when the network is interested in the state in the development of entrepreneurial activity, and it is ready to stimulate or, on the contrary, discourage certain sectors of the economy, regions, types of entrepreneurial activity. >
By providing taxes to taxpayers or other tax benefits, the state, first of all, activates the influence of the tax regulator on various economic processes. At the same time it should be avenged that with the improvement of tax mechanisms the forms and methods of granting benefits in any state are constantly evolving. The most typical and frequently used forms of tax benefits include:
o full or partial exemption of profit, income or other object from taxation;
o attribution of losses to deferred income;
o applying a reduced tax rate;
o Full or partial exemption from taxation for a particular type of activity or income from such activities;
o exemption from tax of certain social groups of the population;
o Possibility of receiving a deferral or installment of a tax payment, etc.
The most frequent object of tax incentives is investment activity, as in many countries the profit directed to these purposes is completely or partially exempted from taxation.With the help of tax incentives in many countries, the creation of small enterprises, attracting foreign capital, scientific and technical developments, which are of fundamental importance for the further development of the economy, environmental projects are encouraged, and the creation of new high-tech import substituting industries that promote the production of competitive products for the world market is encouraged
Individual tax breaks are aimed at mitigating the consequences of economic and financial crises. To encourage concentration of capital, renewal of production assets, stimulation of foreign economic activity, the state uses such type of tax privilege as deferred payment or exemption from tax payment (tax holidays).
When levying a tax on income or profit in a number of countries, it is practicable to classify losses of the current year as profit or income of the next year or next years. In a number of countries, consolidated taxpayers are taxed, which allows them to offset losses and profits within their balance sheet. Often, tax credits are used in the form of tax refund to corporations previously paid to the state, tax benefits to the first buyers of new issues of shares of companies, etc.
In a number of foreign countries, various types of benefits are provided, depending on the form of ownership. For example, often objects in state ownership are exempted from paying land tax, often preferential taxation of profits of the state corporation and others are established. Sometimes tax benefits are established depending on citizenship in order to stimulate foreign investment.
The sharp increase in budget expenditures in many countries posed with great urgency the issue of streamlining the provision of various tax incentives. The ego is due to the fact that the establishment of a broad list of tax incentives often leads to a reduction in the tax base, so that to maintain the level of tax revenues required by the state, it resorts to setting higher tax rates.
In addition, preferential regulation violates the basic principle of equality of taxation for all taxpayers, regardless of the type of their activities, and creates unequal conditions for enterprises in various spheres of the economy.
The use of tax incentives, or preferences, is a typical example of a direct impact on regulatory processes and incentives. Full exemption from payment of individual taxes, the base of which is income or profit, is used by states, as a rule, for the development of new branches of the economy or spheres of activity, to stimulate investment in poorly developed or unfavorable regions of the country. Such tax exemptions are practiced mainly for a period of three to five years. In the United States tax practice, at the very outset of economic reforms (in the first half of the 1990s), it was envisaged that the joint ventures with foreign capital would be fully released within two years from the profit tax, which facilitated the inflow of foreign direct investment into the country. Much longer there was a privilege for small businesses that were exempt from the profit tax entirely within the first two years from the time of the organization and in part during the next two years. Under preferential taxation in many countries, profits are directed to the implementation of research and development. Privileges on the payment of taxes are often entitled to use organizations of disabled people, enterprises that employ wage labor of representatives of socially vulnerable groups of the population. United States tax legislation also provides for such a form of exemption from taxes, as an investment tax credit, which is the direction of taxes during a contract time, not to the budget, but to the investment of that particular taxpayer.
In contrast to a full tax exemption, partial tax exemption is a system of tax benefits for a certain part of the entrepreneurial income, which ensures the selectivity and flexibility of the applied forms of state regulation of the economy. In particular, in this case, such economic, financial and tax levers as accelerated depreciation, reduced in time against general rules, or a differentiated tax rate, deferment and installment of tax payment, the creation of tax-exempt different reserve, investment and other funds and other specific types of tax benefits and preferences.
Achieving the goal of forming the necessary financial resources for the authorities at all levels is ensured by establishing a system of federal, regional and local taxes in the national legislation. Widespread use in many economically developed countries has gained the practice of granting the right to regions and municipalities to set extra charges for federal taxes.
An important element of the tax mechanism is tax sanctions . They, on the one hand, are an instrument in the hands of the state aimed at ensuring the taxpayer's unconditional fulfillment of tax obligations. On the other hand, tax sanctions target the taxpayer to use more efficient forms of management. Tax sanctions are an indirect form of using the tax mechanism, they do not directly affect the efficiency of management. In addition, their effectiveness is determined by the effectiveness of the work of controlling bodies.
The formation of the tax base is also a serious tool of the state's tax policy, since this increases or decreases the tax liabilities of various categories of taxpayers. This will create additional incentives or, conversely, restrictions on expansion of production, investment projects and corresponding growth (decrease) in economic development.
The taxation system of most countries provides, in particular, various types of formation of the tax base associated with depreciation. Basically, in practice, the use of normative, proportional and accelerated depreciation. Permission to carry out accelerated depreciation, i.e. to write off the value of fixed capital not in accordance with the norms of physical depreciation, but in an increased amount, leads to an artificial overestimation of production costs and, accordingly, to a decrease in the profit reflected in the accounts, and hence of tax payments. At the same time, this type of depreciation contributes to creating conditions for the growth of investment activity. The legislation of individual countries allows, in addition, to write off the depreciation of half the cost of new equipment. In many countries, the transition to the use of the uneven method of depreciation write-offs is implemented: in the first year or two, the largest part of the cost is written off, and for one type of equipment a one-time cost is written off at the beginning of the service life.
The tax policy of the state has a relatively independent significance, since the results of its results largely determine what adjustments the state has to make in its economic policy. Having this independence, the tax policy should be based on the scientific theory of taxes. However, it should be noted that the theory of taxes developed and improved with the development of the economy, strengthening the state, expanding its functions and enhancing its impact on economic development.
As V.V. points out. Panskov, in the late XIX - early XX century. financial science defined its subject as the state's finances, although the finances of other public-legal unions were included in the subject of science, but their meaningful development belongs to a later period. Evolution of views on the financial economy of the state, on its tasks and functions is connected in its essence with the evolution of views on the role of the state in the economy, and with the general theory of the state.
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