Browsing by Subject "taxation"

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  • Tweneboah-Kodua, Augustine (2004)
    The study looks at the competition for foreign direct investment (FDI) through country size, taxation with trade cost, and subsidy games. It addresses the following questions. How countries in the same geographical and economic region use investment policies such as subsidies to compete and attract potential FDI? Investment allocations are meant to be either divisible or indivisible In line with Krugman’s new trade theory (Krugman 1980) and Haufler/Wooton’s account of competition for foreign direct investment (Haufler/Wooton 1998), I focus on household utility optimisation and a monopolistic firm’s profit maximisation problems for two countries of unequal size. I also show in line with Haaparanta (1996), how governments offer positive subsidies to influence the location decision of a MNF. The study demonstrates that with trade cost (transportation cost) and indivisible amount of physical capital, the firm can charge a higher producer price in the larger country than in the smaller country. Consequently, in the presence of tax competion with symmetric trade cost, the larger country with larger market size can set a positive profit tax on the firm’s profit. The firm then extracts positive profit from both countries, irrespective of where it locates, but gains higher profit from the larger country. Therefore to limit the amount of trade cost, and to take advantage of both markets, it is always better for the firm to locate in the larger country. Moreover, with divisible amount of capital, the study identifies that at the equilibrium, the smaller country has to pay more subsidies in order to win more investment. The larger country offers higher subsidy in line with a higher wage rate, it may still lose FDI.
  • Riihinen, Päiviö (Suomen metsätieteellinen seura, 1981)
  • Pasternack, Daniel (Svenska handelshögskolan, 2000)
    Working Papers
    In this paper I investigate the exercise policy, and the market reaction to that, of the executive stock option holders in Finland. The empirical tests are conducted with aggregated firm level data from 34 firms and 41 stock option programs. I find some evidence of an inverse relation between the exercise intensity of the options holders and the future abnormal return of the company share price. This finding is supported by the view that information about future company prospect seems to be the only theoretical attribute that could delay the exercise of the options. Moreover, a high concentration of exercises in the beginning of the exercise window is predicted and the market is expected to react to deviations from this. The empirical findings however show that the market does not react homogenously to the information revealed by the late exercises.
  • Määttänen, Niku Ilmari (2021)
    In many countries, owner-occupied housing enjoys a tax-favoured status relative to rental housing and many other forms of wealth. I first use simple examples to illustrate why the tax status of owner-occupied housing relates crucially to the tax treatment of the so-called imputed rent and mortgage interest expenses. I then discuss other issues related to capital income taxation as well as property taxation and housing market transaction taxes against basic principles of good taxation, referring to tax policies in the Nordic countries. I also discuss the connection between certain macroprudential policies and housing taxation.
  • Torkkeli, Anu (Svenska handelshögskolan, 2016)
    Economics and Society – 296
    This study examines the corporate capital gains taxation in Nordic countries, European Union and Finland. The main perspective is in the corporate income tax law, but because of the multidisciplinary subject of the corporate capital gains taxation, this study also has an economic perspective. Before analyzing the taxation itself, the basic concepts for the study are introduced such as the concept of capital, income and capital gain. Also the tax framework of this study is introduced by describing the most significant features and issues in corporate income taxation and in corporate capital gains taxation. Corporate capital gains taxation is discussed by starting with Nordic countries, continuing with European Union member states and finally ending up with Finland. A rough comparative summary is created at the end of each of these sections. Recent changes having taken place until January 2015 in the corporate capital gains taxation are also included in the study. Taxation is investigated based on the existing tax law literature, and the analysis is fulfilled with the help of the selected case law. After the international tax system analysis, the future options for corporate capital gains taxation are discussed as well as challenges related to the changes in the corporate income taxation such as correct level of harmonization so that individual countries still have their own fiscal policy. This study offers the value-added to the society in a couple of different ways. The study extensively analyzes the international corporate capital gains taxation models. In addition, the study not only discusses the corporate capital gains purely from the legal point of view but also has a strong focus on the underlying features behind the corporate capital gains taxation system: features of the good taxation system, economics and competitiveness, significance and role of the corporate capital gains in the economics. The conclusions of the study are made in a concrete way, because a proposal for the focus of future development of the corporate capital gains taxation at the EU level and the proposal for a future corporate capital gains taxation model in Finland as an individual Nordic country and EU member state is developed.
  • Gangnuss, Danila (2005)
    The European Union has created a massive market for goods, services, capital and labour. In principle, goods and services as well as factors of production can move freely across the national borders within the European Union. Migration of the factors of production is driven by the country-specific differences in marginal productivity. As a result of this, migration ensures the most efficient use of the factors of production and therefore promotes the general welfare. However, international mobility of the factors of production might threaten national welfare of the countries that participate in economic integration. For some of the countries, this raises concerns about loosing factors of production in favor of the other member-states of the European Union. The purpose of this thesis is to analyze how mobility of skilled labour affects income taxation decisions in the countries that face economic integration. The thesis identifies optimal patterns of taxes and of public expenditures in the countries that face international agglomeration of industry. It poses the question of whether there exists an optimal size of the public sector in the presence of economic integration. Starting with the core-periphery models of Krugman (1991a), Fujita et al. (1999) and Forslid (1999), the thesis considers a new economic geography model of tax competition (Andersson and Forslid 2001), where two initially identical countries compete for internationally mobile skilled workers. The model contains two types of equilibria. In the dispersed equilibrium, manufactured production and skilled workers are located in both countries. In the agglomerated equilibrium, manufactured production and skilled workers are concentrated in one of the countries. For both types of equilibrium we construct taxes, which are optimal for the purpose of preserving current distribution of manufactured production and of skilled workers. We show that it is always optimal to tax the income of skilled workers at some positive rate. In the dispersed equilibrium, taxes on the income of skilled workers cannot be increased above some critical level without producing agglomeration of industry. However, in the agglomerated equilibrium, economic integration decreases sensitivity of skilled workers with respect to fiscal incentives. As a result of this, the scope for income taxation of skilled workers in the agglomerated equilibrium does not monotonically decline with trade costs. We also show that taxes on the income of unskilled workers determine the size of the public sector in the dispersed equilibrium but not in the agglomerated equilibrium. It is interesting that in the country, which contains agglomeration of industry, taxes on the income of unskilled workers can be decreased without reducing the size of the public sector.
  • Kostiainen, Elina (Helsingin yliopisto, 2018)
    Taxation has been trending in the financing for development agenda once again since the Monterrey Consensus in 2002. It has been widely stated amongst developing countries, donors and international institutions, that there is a growing importance for enhancing developing countries’ capacity to collect taxes in order to secure financing of SDG’s and reduce dependence on development assistance. Furthermore, it is believed that taxation plays a central role in building democratic and accountable states. Many donor countries, including Finland, have committed to double their support by the year 2020 to improve tax systems in developing countries. Namibia is one of the signatories of the Addis Tax Initiative (ATI), and has committed to step up its revenue collection in accordance with the principles aligned in the ATI. Although it is a popular idea that direct taxing of the citizens can lead to more responsive and accountable governments in developing countries, little research has been conducted that shed light on the complexity of this relationship in practice. The aim of this thesis is to provide insight on how legitimate do Namibian citizens consider the fact that they are being taxed, and which factors influence emergence or lack of this legitimacy. In order to gain understanding on this topic, qualitative thematic interviews have been conducted with Namibians and various tax experts. Three theoretical concepts – fiscal contract proposition, legitimacy and economic citizenship – are applied to the analysis of the interview material to illuminate different aspects that affect the perceived legitimacy of taxation. Although Namibia has a particularly high ratio of tax revenue to GDP in comparison to other sub-Saharan countries and collects a remarkable share of its revenues from direct taxes, it seems that the fiscal contract is unfounded in Namibia. None of the respondents thought that they are directly benefitting from paying taxes and saw very few benefits in paying taxes in general. Particularly the government’s irresponsible spending and corruption were major factors undermining the legitimacy of taxation in Namibia. Taxpayer education and possibilities to influence on the government’s decision-making were considered as very limited. Political culture matters; due to the dominant party system and weak civil society, there seems to prevail an attitude within the Namibian government that they do not need to be accountable toward the taxpaying citizens, as there is no alternative to vote for. The limitations of the fiscal contract proposition in the Namibian context are also discussed considering the demographic, geographic and economic structure, as well as the structure of political decision-making in Namibia. This thesis intends to draw attention to the context-specificity of taxation and its role in shaping state-society relations.
  • Heinonen, Piia (2007)
    This case study analyses the economic operations of a group of Lusaka-based businesswomen in the formal economy. In the study, these businesswomen are considered 'new' since through their entrepreneurship they have actively adapted to the 1990s liberalisation of Zambian economy. There are signs indicating that the Zambian entrepreneurial development does not follow the modern trajectories, which makes entrepreneurship an interesting research topic. The concepts of economic citizenship and strategy are launched to understand individual operations in the context of state regulation and social setting. On one hand, I will examine the Zambian neoliberal tax policy and its impact on the economic operations and decision-making of the new businesswomen, such as tax registration. On the other hand, the empirical data from the interviews with businesswomen and from the Zambian literature and magazines are examined to grasp together a full picture of the social elements that influence businesswomen's economic operations. The study reveals that the economic citizenship of the new Lusaka businesswomen builds on a complex set of norms and responsibilities and is more likely based on the duties than on the rights of a citizen. The economic strategies of the businesswomen do not solely reflect the market rationalities, but also responsibilities towards the nation, employees and the extended family. The traditional connotations of female decency influence new businesswomen's operations as well.
  • Erasaari, Matti (2020)
    Taxation always involves an element of value quantification, since to tax is also to implement a measuring scale-a process that is usually taken for granted. But when it becomes necessary to determine the taxational value of abstract time or labor, it is also necessary to outline the principles upon which such value is established. This article discusses the conflicting views of the Finnish Tax Administration and the Helsinki Timebank, a local exchange network, about how to tax 'whiles', the community currency that equates to one-hour stretches of work time. Based on a 2013 ruling by the Finnish tax authority and the Timebank's responses to it, the article asks, to what degree can the choice of a particular 'standard' be taken as a 'moral' choice?