The Impact of Firm Characteristics, Industry Types, and Financial Ratios on SMEs＇ Utilization of Tax Incentives

This study aims to contribute to the growing literature on issues of tax incentives for small and medium-sized enterprises （SMEs）. Through comprehensive exploration of data, the study investigates factors leading to successful and unsuccessful utilization of tax incentives among SMEs. Financial ratios were calculated based on the information retrieved from the companies＇ annual financial statement. Apparently, these financial ratios are evidence of how successful the companies are in utilizing the tax incentives. In this study, 129 small companies and 71 medium-sized companies were selected as samples for the period of 2003-2007. The result indicates that financial structure such as retained earnings, tax burden, cash flow, and inventory level determined the ability of companies to utilize tax incentives; hence leading to higher earnings generated from the business operation. The age of the companies affects the utilization of tax incentives and this denotes that older companies are more capable of generating higher earnings. Hence, a thorough analysis of the data allows us not only to determine the success of the company in utilizing tax incentives but also to identify the determinants that impact their performance.

Tax Incentives and Maturity Mismatch between Investment and Financing:Evidence from China

This paper examines the effects of China's accelerated depreciation policy(ADP)on the maturity mismatch between investment and financing.Using panel data for China's A-share nonfinancial listed companies from 2010 to 2019 and a staggered difference-in-differences approach,we found the following.First,ADP significantly aggravated the degree of corporate maturity mismatch,and this result was robust across multiple checks.Second,due to an insufficient long-term loan supply,firms had to finance the fixed investments induced by ADP with short-term debts,leading to maturity mismatches.Third,the positive policy effects were mainly significant for firms with high policy exposure,high-risk preferences,a high degree of information asymmetry,and firms with weak long-term financing capacity.Finally,maturity mismatch exacerbated corporate financial risks.Our research findings indicate that passive maturity mismatch is prevalent among Chinese companies and emphasize the need to address financial repression in order to mitigate the potential financial risks that may arise from tax incentives.

Analysis and Innovative Strategies of Tax Preferential Policies to Promote the Sustainable Development of Small-Scale Individual Businesses

This study conducted an in-depth analysis of the current tax preferential policies for small-scale individual businesses and compared them with similar policies both domestically and internationally,aiming to reveal the advantages and disadvantages of the current system.After examining the impact of these tax preferential policies on the economic status of individual business owners and the broader social economy,this article proposes a set of innovative tax preferential strategies based on theoretical foundations.By developing these innovative strategies and clarifying their implementation paths,the aim is to promote the sustainable and healthy development of small-scale individual businesses,thereby fostering comprehensive socio-economic progress.The conclusion of this study not only summarizes policy recommendations with practical significance but also provides theoretical support for the optimization and innovation of future related systems.

Tax incentives and environmental protection:Evidence from China’s taxpayer-level data

Since 2008,China has provided ITC(investment tax credit)and TID(taxable income deduction)for firms who engage in investment or business related to reducing pollution emissions and saving energy.This paper examines both incidence and effects of these tax incentives.Using a unique panel dataset mainly from the NTSD(the National Tax Statistics Dataset of China)over 2007-2011,we find that they are generally not popular.SOEs are the main beneficiaries,while regional characteristics have no impact on taxpayers’attitude to ITC or TID.The mechanism behind may be that the incentives hurt interests of firms and local governments.Their effects on taxpayers’activities including capital,employment,and production are not remarkable,while growth of coal consumption significantly speeds up.These findings are robust to multiple specifications of using different empirical strategies,samples and variables.However,the results indicate that the tax incentives do serve the purpose of protecting environment by restraining coal consumption in some specific group of firms who are affiliated to the central government.This finding confirms a simple model established in the paper that emphasizes the importance of the government’executive power on tax policies,and relates to the literature finding that local support can remarkably boost the efficiency of tax incentives for environmental protection.

Tax Incentives:Tax Revenue versus GDP in Malaysia

Malaysia has a set of"blessed advantages"over other members of ASEAN in terms of fiscal incentives,environmental perspectives and established infrastructures.MNEs are welcome to invest in Malaysia as they could generate substantial income at the expense of significant tax benefits,compared with local companies.The proceeds of business can be diversified into venture capitals and private equities,earning sustainable investment returns and large capital gains upon realisation.Despite tax forgone,Malaysia continues furthering tax incentives to attract FDI.

The Hainan Free Trade Port Tax System:Past,Present and Future

Since President Xi Jinping announced the Chinese central government’s decision to transform Hainan into a highly open free trade port(FTP),the region has experienced unprecedented growth and development.In order to support this progress,a comprehensive policy framework has been introduced and successfully implemented,with tax policy playing a crucial role in its success.Under the principles of zero tariffs,low tax rates,simplified taxation processes,effective tax law enforcement,and phased implementation,Hainan FTP’s tax system has embarked on a new voyage,providing businesses with the strongest support ever introduced in China.The most fundamental changes pertain to income tax incentives for both individuals and businesses,and additional supportive measures in VAT have also been implemented to facilitate a strong free-trade economy.Meanwhile,it is hopeful that structural changes in the Hainan FTP tax system will also be in place after 2025.

Promoting the High-Quality Development of the Belt and Road:A Taxation Perspective

This article sets out the evolution journey of trade and investment since globalization,the relationship between foreign direct investment and gross do-mestic product growth,revisits the utilization of tax incentives in the past,explores the tax incentives for the post-pandemic recovery period in 2023,and provides some thoughts on how the BRITACOM platform may support high-quality growth.

Tax Certainty Challenges and Opportunities from BEPS 2.0 in BRI Jurisdictions

BEPS 2.0 is set to have a profound effect on the Belt and Road jurisdic-tions’ tax certainty environment. In the initial stage, a heightening of tax uncertainty can be envisioned, though in the longer term there is reason to be optimistic that a new and more certain BRI tax environment will emerge, in which the BRITACOM can play a crucial role.

Tax Challenges and Opportunities of Post-COVID-19 Economic Recovery

Governments around the world have taken urgent measures including both fiscal and monetary policies,to address the severe economic effects of the COVID-19 pandemic.Initially measures were taken to support businesses and individuals during the pandemic,to support unemployed people and reduce insolvencies resulting from the crisis;however,as the health situation around the world begins to improve,countries affected by the pandemic should take measures to stimulate growth and employment.This article argues that countries should act to promote investment and economic growth,in support of green energy and future technologies.Policy measures could include tax and non-tax incentives.Stimulus measures should be carefully targeted to achieve the intended result and their effects should be monitored through the collection of relevant statistics.The BRITACOM can be a platform to establish standards and exchange experiences.

Tax Policies Supporting Growth and Sustainable and Equitable Development in Post-COVID Economic Recovery Period

As the pandemic begins to ease in some places,the support made available to individuals and businesses should be gradually phased out and replaced by spending to encourage economic growth and employment.While businesses and individuals are recovering from the problems caused by the pandemic,revenue from corporate and individual income taxes may be reduced.Additional tax revenues can however be gained from improved taxation of the digital economy and the opportunities to identify undisclosed income sources arising from agreements for the exchange of tax information.Jurisdictions must modernise tax administration to improve taxpayer compliance and reduce the size of the informal and shadow economies.Modernisation and digitalisation of tax administration can significantly improve tax collection.Using the dialogue process under BRITACOM,the BRI jurisdictions can benefit from the experience of other developing jurisdictions and receive technical support to improve tax administration and collection.Tax incentives could be used to encourage businesses to invest in the digital and green energy sectors.These incentives should be specifically framed and targeted to achieve the maximum effect and monitored to ensure that they continue to achieve the required goals.

Promoting Economic Recovery Through Taxation

The role of taxation in promoting economic recovery has attracted great-er attention in recent years,with economic dislocation following the Global Financial Crisis and the COVID-19 pandemic.While taxation is only one of the factors impacting economic recovery,both economic literature and practical experience show that tax policy can contribute to enhanced growth and therefore greater economic activity.Tax instruments used as a means for promoting economic recovery include tax holidays,preferential tax rates,investment allowances,tax credits and special economic zones.However,there are a range of constraints over tax incentive design imposed by bodies such as the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting,the Forum on Harmful Tax Practices of the OECD and the Code of Conduct on Business Taxation of the European Union.Given the above,this paper sets out practical issues to inform governments seeking to promote economic activity through taxation.

Can the Super-deduction of R&D Expenses BoostR&DInvestment?

The super-deduction of research and development(R&D)expenses is at the core of the policy to stimulate enterprise innovation in China.This paper identifies whether firms are supported by the super-deduction policies for R&D expenses and uses the diferencein-diferences method to investigate the impact of the policies on R&D investment.The results show that changes in policy in 2013 significantly increased the R&D investment of firms engaging in key state-supported technologies.Policy changes in 2016 significantly increased the R&D investment of firms engaging in non-key-state-supported technologies.Enterprises not only invested all their tax incentives in R&D activities but also increased their investment in self-raised funds.The super-deduction policy had different impacts on different industries,firms with different boards,and firms with diferent ownership.The policy significantly affected the manufacturing and construction industries,the Small and Medium Enterprise Board,and non-state-owned enterprises.Through a mechanism analysis,we found that the policy significantly reduced the user cost of R&D and increased the net cash flow of enterprises,which could raise a firm's R&D investment.It is necessary to increase policy support,expand the scope of super-deductible expenses,and increase the super-deduction rate based on industry classification according to the sensitivity of different industries to the policy.

Promoting Economic Recovery Through Taxation in Indonesia

After two consecutive quarters of decreasing GDP,Indonesia expe-rienced a recession for the first time in 22 years.The Indonesian government has responded since the COVID-19 pandemic and started with new measures to reduce the pandemic’s potential for further harm.In 2021,efforts to revive and speed up economic growth continued.Indonesia’s economic recovery has been boosted by the country’s tax policy,particularly concerning the tax incentives to mitigate the harm from the COVID-19 outbreak.

The BEPS 2.0 Era Dawns:Five Long-term Implications for Belt and Road Jurisdictions

The OECD/G20 Inclusive Framework(IF)on Base Erosion and Profit Shifting(BEPS)has substantially finalized the model rules and much of the guidance for the so-called“Pillar 2”global minimum tax,while work continues on the so-called“Pillar 1”new taxing rights for market jurisdictions.As many BRI jurisdictions are among the 141 IF members,there is value in starting to consider the long-term implications of the new global tax system,and the extent to which the Belt and Road Initiative Tax Administration Cooperation Mechanism(BRITACOM),through the four core work areas of the Nur-Sultan Action Plan(2022-2024),can contribute to ensuring that BRI jurisdictions manage the transition for maximum benefit.

Italy’s Fiscal Response to the COVID-19 Crisis

This article focuses on measures envisaged and adopted by the Italian Revenue Agency during the COVID-19 pandemic to prevent the spread of virus and to support businesses and individuals in mitigating the worst economic impact of the cri-sis.In particular,measures such as suspension of tax payments and processing,grants allocation,tax credits and increased use of digital services have been adopted to re-cover and relaunch the financial system.As a member state of the European Union,Italy has also submitted its recovery and resilience plan that is committed to boosting a sustainable growth while fostering the digital and green transition.