Comparative Assessment of Capital Income Taxation in Azerbaijan, Kazakhstan, Georgia, and Belarus
DOI:
https://doi.org/10.15549/jeecar.v9i2.761Keywords:
effective tax rate, marginal investment, capital taxation, depreciation ratesAbstract
The marginal effective tax rates (METR) are determined in Azerbaijan, Kazakhstan, Georgia, and Belarus. The METR have high sensitivity from the tax depreciation rate, profit tax and interest rates for all countries. Sensitivity of the METR from inflation is high in Georgia and Belarus but is less in Azerbaijan and Kazakhstan. The calculations show that the current tax burden in Belarus is higher than in other countries (excluding debt financing). The current tax depreciation rate does not provide additional incentives for investment activity in these countries. The calculations are approximate, but they show that the tax depreciation rate depends on the inflation rate to create additional incentives for marginal investment. Georgia has the highest opportunities to increase investment activities by decreasing the real interest rate. Kazakhstan has greater tax advantages in manufacturing than Azerbaijan.
References
SNA, System National accounts 2008. https://unstats.un.org/unsd/nationalaccount/docs/sna2008.pdf
Atkinson, A. B. and Stiglitz, J. E. (1976). The design of tax structure: Direct versus indirect taxation. Journal of Public Economics, 6(1-2), 55-75. https://doi.org/10.1016/0047-2727(76)90041-4 DOI: https://doi.org/10.1016/0047-2727(76)90041-4
BEA Rates of Depreciation, Service Lives, Declining-Balance Rates, and Hulten-Wykoff Categories. https://apps.bea.gov/scb/account_articles/national/0797fr/table3.htm
Charles R. Hulten and Frank C. Wykoff. (1981). “The Measurement of Economic Depreciation” in Depreciation, Inflation, and the Taxation of Income from Capital. Washington, DC: The Urban Institute, pp. 81-125. https://econ.umd.edu/publication/measurement-economic-depreciation
Chikviladze, M. (2018). The Share in Percentage of Taxes in GDP. J. Ecoforum, 7(1). http://www.ecoforumjournal.ro/index.php/eco/article/view/770
Code of the Republic of Kazakhstan “On taxes and other obligatory payments to the budget (Tax Code)”, (25 December 2017 ? 120-VI, has been amended by the 2018). https://online.zakon.kz/Document/?doc_id=36575067#pos=6;-106
Devereux, Michael P., and Rachel Griffith. (1999), The Taxation of Discrete Investment Choices, Institute for Fiscal Studies, Working Paper Series No. W98/16. https://doi.org/10.1920/wp.ifs.1998.9816 DOI: https://doi.org/10.1920/wp.ifs.1998.9816
Devereux, Michael P., and Rachel Griffith. (2003), Evaluating Tax Policy for Location Decisions, International Tax and Public Finance, Vol. 10, pages 107–126. https://doi.org/10.1023/A:1023364421914 DOI: https://doi.org/10.1023/A:1023364421914
Devereux, Michael P., Ben Lockwood, and Michela Redoano. (2008). Do countries compete over corporate tax rates? Journal of Public Economics 91, 1210-1235. https://doi.org/10.1016/j.jpubeco.2007.09.005 DOI: https://doi.org/10.1016/j.jpubeco.2007.09.005
Diamond, P. A., and Mirrlees, J. A. (1971). Optimal taxation and public production I: Production efficiency. American Economic Review, 61(1), 8–27. https://www.jstor.org/stable/1910538
Fabian ten Kate and Petros Milionis. (2019). Is capital taxation always harmful for economic growth? International Tax and Public Finance, Vol. 26: 758–805. https://doi.org/10.1007/s10797-019-09530-3 DOI: https://doi.org/10.1007/s10797-019-09530-3
Loukianova, I.A., Shkliarova, M. A., Vysotsky, S. Yu. (2019). Modelling of Fiscal and Monetary Policy Interactions in the Republic of Belarus. Journal of Tax Reform, ?3. Vol. 5. P. 220-235 http://dx.doi.org/10.15826/jtr.2019.5.3.069 DOI: https://doi.org/10.15826/jtr.2019.5.3.069
Feld, L. and J. Heckemeyer. (2011). FDI and Taxation: A Meta-Study, Journal of Economic Surveys, Vol. 25, No. 2. https://doi.org/10.1111/j.1467-6419.2010.00674.x DOI: https://doi.org/10.1111/j.1467-6419.2010.00674.x
Feldstein, M. and Flemming, J. (1971). Tax Policy, Corporate Saving and Investment Behavior in Britain. Review of Economic Studies, 38, October. https://doi.org/10.2307/2296687 DOI: https://doi.org/10.2307/2296687
Hall, Robert and Jorgenson, Dale W. (1967). Tax Policy and Investment Behavior. American Economic Review 57 (June): 391-414. https://www.jstor.org/stable/1812110
Jorgenson, Dale. (1963). Capital Theory and Investment Behavior. American Economic Review 53, no. 2: 247-259. https://www.jstor.org/stable/1823868
King, M. A., and D. Fullerton (eds.). (1984). The Taxation of Income from Capital. A Comparative Study of the United States, the United Kingdom, Sweden, and West Germany. University of Chicago Press. http://www.nber.org/books/king84-1 DOI: https://doi.org/10.7208/chicago/9780226436319.001.0001
Law of the Republic of Kazakhstan "On the republican budget for 2021-2023" dated December 2, 2020 No. 379-VI. https://online.zakon.kz/Document/?doc_id=32245090
Mankiw, N. Gregory, Matthew Weinzierl, and Danny Yagan. (2009). Optimal Taxation in Theory and Practice. Journal of Economic Perspectives, 23 (4): 147-74. https://doi.org/10.1257/jep.23.4.147 DOI: https://doi.org/10.1257/jep.23.4.147
McKenzie, K. J. (1994). The Implications of Risk and Irreversibility for the Measurement of Marginal Effective Tax Rates on Capital. Canadian Journal of Economics 27(3), 604-619. https://doi.org/10.2307/135786 DOI: https://doi.org/10.2307/135786
Ministry of Finance of Azerbaijan. (2021). State Budget. http://maliyye.gov.az/en/static/11/state-budget
Ministry of Finance of Belarus. (2021). Bulletins on budget execution. https://minfin.gov.by/en/budgetary_policy/bulletin/
Ministry of Finance of Georgia. (2021). General Government Taxes. https://www.mof.ge/en/4567
Odintsov, Oleg, Yevtukhova, Tetiana, Vasylkonova, Elina, and Kunchenko-Kharchenko, Valentyna. (2020). Influence of tax burden on economic development of agricultural enterprises in Ukraine. Journal of Eastern European and Central Asian Research, Vol. 7, Iss. 1, 150-162. https://doi.org/10.15549/jeecar.v7i1.328 DOI: https://doi.org/10.15549/jeecar.v7i1.328
OECD. (2000). Tax Burdens: Alternative Measures, OECD Tax Policy Studies No. 2, Paris. https://doi.org/10.1787/9789264181588-en DOI: https://doi.org/10.1787/9789264181588-en
OECD. (2009). Measuring Capital – OECD Manual, OECD, Paris. https://doi.org/10.1787/9789264068476-en DOI: https://doi.org/10.1787/9789264068476-en
OECD. (2019). Corporate Tax Statistics. OECD, Paris. https://www.oecd.org/tax/beps/corporate-tax-statistics-database.htm
OECD. (2021). Global Revenue Statistics Database. https://stats.oecd.org/Index.aspx?DataSetCode=RS_GBL
Resolution of the Ministry of Economy of the Republic of Belarus of November 21, 2001 no. 186 "On approval of the Temporary republican classifier of fixed assets and standard terms of their service". https://pravo.by/document/?guid=3961&p0=W20107489
Sorbe, S. and Å. Johansson. (2017). International tax planning and fixed investment, OECD Economics Department Working Papers, No. 1361, OECD Publishing, Paris. https://doi.org/10.1787/83239540-en DOI: https://doi.org/10.1787/83239540-en
Tax Code of Georgia. https://matsne.gov.ge/en/document/view/1043717?publication=152
Tax Code of Azerbaijan. https://www.taxes.gov.az/
Tax Code of Belarus. http://www.nalog.gov.by/uploads/folderForLinks/tc-rb-2019.pdf
Downloads
Published
How to Cite
Issue
Section
License
The JEECAR journal allows the author(s) to hold the copyright and publishing rights of their own manuscript without restrictions.
This journal applies the Creative Attribution Common License to works we publish, and allows reuse and remixing of its content, in accordance with a CC-BY 4.0 license.
Authors are free to: Share — copy and redistribute the material in any medium or format and Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions — The author may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
The JEECAR Journal is committed to the editorial principles of all aspects of publication ethics and publication malpractice as assigned by the Committee on Public Ethics.
