A critical analysis of taxation systems under uncertainty

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ACKNOWLEDGEMENT

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DECLARATION

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ABSTRACT

This research will focus on the taxation system and financial crisis. The localities are assumed to experience different random productivity shocks, meaning that the private labor supply decisions as well as the choices of income tax rates are carried out under uncertainty. Part of the central government's decision problem is then to provide tax revenue sharing between the local governments. It focuses on a globalized economy and the increasing relocation of businesses, taxation of these go to countries from outside, including tax havens, i.e. products were taxed in another country and at the same time the goods become more expensive native , which should add the tax cost. Moreover, the tax burden, especially for autonomous entrepreneurial initiatives is difficult, so that when they lightened the tax burden may boost their activity. The increase in VAT would be offset by reduced costs, among which include the taxes paid by the company. Taxes on financial transactions again in the international political agenda the global economic crisis has returned prominence on the agendas policies on the issue of taxation of financial transactions. The Governments, faced with huge budget deficits and high public debt levels as a result of the bailouts financial and budget to stimulate the economy, seeking funds. They also are receptive to the voices of civil society to demand that the financial industry pay its share, and that cuts in social spending on environmental conservation, public goods, and rising fiscal pressure on citizens are minimal.

Table of Content

ACKNOWLEDGEMENT2

DECLARATION3

ABSTRACT4

CHAPTER 1: INTRODUCTION7

1.1 Introduction7

1.2 Research Background8

1.3 Aim and Objective9

CHAPTER 2: LITERATURE REVIEW11

2.6 Value Added Tax28

2.7 Review of Developing Countries'tax Issues29

2.8 Summary31

CHAPTER 3: METHODOLOGY33

3.1 Data33

3.2 Regression techniques37

3.3 Regression38

3.4 Explanatory Variables42

3.5 Limitation of data44

CHAPTER 4: RESULT AND DISCUSSION45

4.1 Introductory Analysis45

4.2 Analysis of Regressions46

4.3 Robustness Tests51

4.4 Implications of results55

CHAPTER 5: CONCLUSION64

5.1 Aims of the Research64

5.2 Findings65

5.3 Contribution to the Academia65

5.4 Further Research66

REFERENCES67

Table of figures

Figure 1. taxes rate at the time of financial crisis,.33

Figure 2 Euro locality structural financial crisis estimates.37

Figure 3:  Euro locality financial crisis gap estimate—Restricted model.38

Figure 4: Observed and unobserved determinants of euro area financial crisis.40

Chapter 1: Introduction

1.1 Introduction

Public finance, commonly referred to as public economics, is the field of economics that examines the role of the government in the economy and the economic consequences of the government's actions. A notable exception to this definition is the study of the government's effects on the business cycle, which is usually considered to be a ...