This poster aims to increase public awareness and understanding of Minister of Finance Regulation Number 50 of 2025. It presents key information regarding the taxation of cryptocurrency transactions in Indonesia, including Value Added Tax (VAT), Final Income Tax Article 22, applicable tax rates, and tax obligations for crypto transactions. The poster is designed to communicate taxation information accessible for global audience. This work was developed as part of a collaborative educational program between the Diploma III of Taxation, University of Lampung and Scientia Hall.
Emerging economies collect substantially less tax revenue relative to national income than advanced economies, and a large share of this shortfall reflects weak enforcement capacity rather than statutory rates. Digital audio technologies and integrated financial information systems are increasingly promoted as instruments for narrowing this gap, yet the evidence on whether, when, and how they raise compliance and transparency remains scattered across public economics, accounting, and information systems scholarship. This review synthesises empirical and conceptual work published between 2006 and 2026 to assess what is known about four interlocking mechanisms: third party information reporting and electronic invoicing, electronic filing and payment platforms, continuous auditing and analytics, and distributed ledger and regulatory technology approaches to data governance. Three consistent patterns emerge. First, technologies that create verifiable third-party information trails produce the most durable compliance gains, with value added tax self-enforcement, electronic sales registers, and consumer incentive schemes generating measurable revenue increases, while technologies that merely digitise existing processes without new information yield smaller and more fragile effects. Second, the revenue and transparency return to digital systems are conditional on administrative capacity, data quality, and political commitment rather than automatic, which explains why similar tools succeed in some jurisdictions and fail in others. Third, the accounting profession is moving from periodic sampling toward continuous assurance and population level analytics, but adoption in emerging economies lags because of skills, infrastructure, and governance constraints. These findings suggest that the design and sequencing of digital reforms matter more than the sophistication of the technology itself. The review offers tax administrators and policymakers evidence graded account of which interventions rest on strong causal evidence and which rest on weaker conceptual or cross sectional foundations, and it identifies the conditions under which digital instruments translate into sustained fiscal gains rather than symbolic modernization.
Anas Azenzoul, Nacer MAHOUAT, Ouissale El Gharbaoui, Jihane Tayazime · 6 authors
Tax systems worldwide face a compliance gap that OECD data places at USD 100–240 billion annually in corporate avoidance alone, before accounting for the shadow economy and crypto-asset transactions. FinTech mandatory e-invoicing, real-time transaction matching, and machine-learning audit selection is narrowing the informational conditions that enable evasion, while simultaneously introducing governance risks: opaque algorithmic audit targeting, contested blockchain forensic evidence, and the surveillance potential of programmable money. This article presents a PRISMA 2020 systematic literature review of 59 peer-reviewed articles (Scopus, Web of Science, and ScienceDirect), complemented by IRAMUTEQ lexicometric analysis and an extension of the Allingham Sandmo compliance model to incorporate algorithmic detection probabilities, bomb-crater belief dynamics, and Zero-Knowledge Proof verification. Four thematic clusters emerge: tax compliance behaviour and FinTech adoption (19.92%), digital transformation and corporate performance (35.34%), bibliometric and emerging-technology research (16.54%), and cryptocurrency markets and regulatory challenges (28.20%). Across them, FinTech reduces evasion where institutional and technical conditions allow but generates distributional, evidentiary, and constitutional risks that existing legal frameworks have yet to resolve. In response, we propose the Techno-Legal Due Process Framework (TLDPF) three pillars (Techno-Proportionality, Cryptographic Burden of Proof, and Algorithmic Constitutionalism) grounded in EU/OECD constitutional doctrine as a normative design proposal awaiting empirical validation.
Putri Anggia, Aisyah Ajeng Putri Riyanto, Muhammad Fathi
The rapid growth of cryptocurrencies is reshaping the global financial landscape, challenging traditional systems of taxation and regulation. This article examines the complex interplay between cryptocurrency anonymity, legal frameworks, and the pursuit of international tax justice. Using normative legal research with a descriptive approach, this article examined the challenges posed by cryptocurrency adoption in taxation policies. The findings revealed that while blockchain technology enhances transparency and decentralisation, the anonymity features of digital assets create risks of tax evasion and illicit financial flows. Addressing these issues requires integrated efforts among international regulatory frameworks, such as the OECD's CARF and FATF's Travel Rule alongside domestic reforms like Indonesia's HPP Law and the EU's DAC8. Inclusive governance that empowers developing countries and the constitutional grounding of tax justice principles are essential to strike a balance between individual privacy and collective fiscal responsibility. This multi-layered approach is critical to ensuring cryptocurrencies serve as instruments of innovation rather than tools for inequality. Future research should focus on empirical assessments of compliance costs, enforcement effectiveness across borders, and the development of privacy-preserving technologies, such as zero-knowledge proofs, to enable proportional and fair regulation globally.
This article examines the utilization of Distributed Ledger Technology (DLT) as a mechanism to address import customs tax evasion. The research employs a game-theoretic framework to examine the dynamics of tax evasion and assess the impact of blockchain on improving transparency, accountability, and compliance in customs administration. A systematic literature review process, adhering to PRISMA criteria, was utilized to gather and examine pertinent academic articles. The literature study examines critical subjects, such as the mechanisms of import tax evasion, the digital taxation framework, and the use of blockchain technology into tax systems. The study also examines the relevance of game theory in comprehending and addressing non-compliant behaviors among taxpayers. In the practical phase, we conducted a systematic review of a corpus exceeding 100 publications, obtained from three international research databases: Scopus, Taylor & Francis, and IEEE Xplore. Following the application of rigorous inclusion and exclusion criteria to guarantee relevance, a concentrated selection of research constituted the foundation for our study. This research underscores the capacity of DLT to transform conventional evasion tactics, reduce corruption, and improve institutional efficacy in customs operations. Insights are contextualized through a worldwide comparison and an examination of the Moroccan customs scene, offering concrete recommendations for utilizing blockchain to modernize customs operations.
The paper investigates tax risks arising in the taxation of cryptocurrency transactions in Ukraine and in the broader international context. It substantiates that the absence of a unified legal qualification of cryptocurrencies significantly complicates the identification of the taxable object, the determination of the tax base, and the establishment of the moment at which tax liabilities arise. The paper highlights key challenges associated with the high volatility of digital assets, the insufficient transparency of transaction recording mechanisms, the complexity of verifying the origin of crypto assets, and the increased risks of tax evasion. Particular attention is devoted to the transnational nature of cryptocurrency circulation, which creates favorable conditions for tax arbitrage, regulatory fragmentation, and manipulation of tax residency. These phenomena weaken the effectiveness of national tax systems and generate additional threats to fiscal stability. It is argued that existing regulatory approaches in many jurisdictions remain fragmented and inadequately adapted to the specific features of decentralized digital technologies. The paper identifies priority directions for mitigating tax risks, including the harmonization of national legislation with international standards, the development of a coherent and unified model for the taxation of digital assets, the improvement of financial monitoring mechanisms, and the enhancement of transparency in cryptocurrency-related transactions. The paper concludes that only a systematic, balanced, and coordinated approach to the legal regulation of the cryptocurrency market is capable of ensuring tax certainty, strengthening compliance, and reducing risks both for the state and for market participants.
This paper proposes the Sovereign Asset Tokenization and Federated Cross-Border Securities Settlement Model, a regulated financial architecture designed to modernize global equity ownership, cross-border settlement, corporate-action administration, tax withholding, and sanctions compliance through tokenized securities infrastructure. Unlike stateless cryptocurrencies or synthetic tokenized stock products, this model preserves monetary sovereignty by anchoring digital equity tokens to legally recognized corporate shares, domestic securities law, sovereign currency rails, regulated custody structures, and verified investor identity credentials. The model replaces the concept of a single centralized global clearing authority with a Federated Sovereign Securities Interoperability Network. Each nation retains legal control over its own securities markets, currency systems, tax rules, sanctions policy, and investor-protection standards, while interoperable technical protocols allow verified investors to access foreign securities under treaty-compliant conditions. The architecture integrates tokenized equities, central securities depositories, central bank digital currencies or regulated settlement tokens, decentralized identifiers, zero-knowledge compliance proofs, smart-contract-based corporate actions, dynamic tax treaty oracles, circuit breakers, dispute-resolution logic, and sovereign override controls. The paper argues that the future of tokenized capital markets is not the elimination of stateregulated finance, but the programmable modernization of it. The proposed framework seeks to combine the speed, transparency, divisibility, and automation of distributed ledger technology with the legal enforceability, investor protections, monetary authority, and national-security controls of traditional financial markets.
The Markets in Crypto-Assets Regulation, DAC8, and the OECD Crypto-Asset Reporting Framework together form an emerging normative ecosystem meant to bring crypto-asset activity within the reach of tax authorities. This study asks whether that ecosystem affords a coherent and complete framework for the international taxation of crypto-assets, or whether the heterogeneity of classifications between financial-market law and tax law perpetuates the conditions for an incomplete taxation that procedural transparency cannot, on its own, remedy. The study proceeds in two parts. Part I analyses the transparency framework. Its definitions are settled, but its reach is not: DAC8 and CARF render transactions visible only where a reporting intermediary exists, which places decentralised finance and self-custody outside the system altogether. Part II asks what becomes of the information once it has been reported. Comparing the substantive tax treatment of staking, mining, airdrops, non-fungible tokens, stablecoins and decentralised-finance income across the principal jurisdictions, it finds that visibility does not in itself produce taxation, because states do not qualify what they see in the same way. Beneath the divergence, the study identifies an uncoordinated drift toward functional treatment. It argues that hard substantive harmonisation is foreclosed in practice, globally for want of any authority empowered to impose it and within the European Union for want of the unanimity that direct taxation requires. What remains available is coordination rather than harmonisation: the neutralisation of cross-border mismatches on the model of the linking rules developed against hybrid mismatches, a technique that leaves each state in possession of its own classification. The central finding of the study is structural. The absence of an identifiable counterparty constrains transparency, substantive qualification, and any coordinated remedy alike, so that the framework is coherent across the intermediated crypto economy and structurally incomplete beyond it. The same limit that arises from the architecture of the technology arises, for reasons of its own, from the consent-based architecture of the international legal order, and together they mark the boundary within which the international taxation of crypto-assets can be made to work.
Andreas KOLYDAS, Stamatis Kontsas, Stavros Kalogiannidis
The research aims to find out how cryptocurrency aids tax evasion in Greece, the socio-economic factors contributing to the practice, and the efficiency of the Greek taxation legislation in deterring such conduct. A total of 359 questionnaires were completed by respondents who engage in cryptocurrencies in Greece. Cross correlational statistical analysis and multiple regression analysis were used to test the relationship of cryptocurrency usage, anonymity, tax policies and socio-economic factors and their impact on tax evasion. Also, sociodemographic factors such as income levels and education levels greatly affected the ability to engage in tax evasion. The study provides a validation that the frequency of cryptocurrency usage, anonymity, ineffectual tax laws, socio-economic factors have a positive correlation with tax evasion rates and influence tax dodging in Greece. Based on the issues highlighted in this study, the following steps are advised for the improvement of the Greek anti-money laundering and combating the financing of terrorism regime: i) improve the regulation and enforcement measures concerning cryptocurrencies, ii) enhance the transparency of the cryptocurrency transactions, and iii) address the socio-economic circumstances that enable tax evasion.
Rosario Violeta Grijalva Salazar, Jose Antonio Caicedo-Mendoza, Arturo Jaime Zuñiga Castillo, Erikson Olivas-Valencia · 5 authors
Taxation on cryptocurrency is becoming critical in global fiscal governance as digital assets adapt to the modern reality of existing outside of traditional regulatory constructs. Theoretical and practical understanding of cryptocurrency taxation is quite new, and so a systematic review was designed to present the most recent empirical research evidence on the legal, fiscal and behavioral aspects of cryptocurrency taxation from across the globe. Using the PRISMA-2020 guidelines, a structured search was applied to the Scopus database on 21 May 2025, with the search terms “crypto-currency”, “cryptoasset” and “taxation.” The inclusion criteria consisted of original research articles published between the years of 2020 and 2025 in English or Spanish, that could be accessed via institutional library support, and that were related to taxation, legal regulation and/or compliance. Out of the original identified 224 records, 36 met the eligibility criteria after screening and verification through seven different stages of review. Socially, five themes were produced by the findings: legal ambiguity surrounding fiscal treatment, limited tax literacy and compliance issues, macroeconomic and monetary issues, application of digital technologies for fiscal tracking, and environmental repercussions from crypto mining. Many countries do not have any coherent tax frameworks to govern the risk that emerges from cryptocurrency taxation, creating uncertainty for both regulators and investors. The findings outlined in this systematic review point to the urgent need for creating a coherent approach to cryptocurrency taxation based on definitions, digital approaches to traceability, and tax literacy compliance strategies. In order to create effective cryptocurrency taxation, there must be a base balance between ensuring innovation, fiscal responsibility, transparency, equity and sustainability in the developing digital economy.
The article presents an in-depth analysis of international approaches to the taxation of virtual assets, covering cryptocurrencies, decentralized finance instruments, non-fungible tokens, airdrops, and hard forks. The research is based on a comparative study of tax regimes in the United States, Germany, Switzerland, Estonia, Singapore, Portugal, and Australia. The analysis addresses differences in legal definitions, rules of income and capital gains taxation, valuation methods, and the application of value-added or goods and services tax. Attention is paid to compliance mechanisms and administrative practices that influence taxpayer behavior and shape levels of adoption. To complement the legal comparison, the study incorporates empirical data from the Global Crypto Adoption Index, allowing for an evaluation of the link between regulatory clarity, tax burden, and the spread of digital assets in different countries. A special focus is placed on Ukraine, which has legally recognized virtual assets through the Law “On Virtual Assets” while awaiting the implementation of Draft Law No. 10225-д to introduce taxation rules. These reforms are assessed in the context of international standards developed by the Organisation for Economic Co-operation and Development, the Financial Action Task Force, and the European Union. The article emphasizes the risks associated with gaps between formal legislative alignment and actual enforcement capacity in transition economies. Excessive or unclear taxation is shown to contribute to capital outflow, informal practices, and regulatory arbitrage. The article further explores underregulated areas such as staking, token swaps, and the creation and trade of non-fungible tokens. It argues that updated tax guidance and coordinated cross-border measures are necessary to provide legal certainty and prevent systemic risks. The role of blockchain analytics, identity verification, and international information-exchange regimes is highlighted as a foundation for more effective oversight. The novelty of the study lies in combining doctrinal legal analysis with fiscal assessment and comparative empirical indicators, which makes it possible to identify both universal patterns and national specificities. The conclusions stress that sustainable taxation of virtual assets requires transparent, balanced, and enforceable rules supported by international coordination. Such an approach not only ensures stable public revenues but also fosters responsible financial innovation and strengthens the integration of Ukraine into the global digital economy.
We investigate how transparency—crypto exchanges' verification of trader identities through Know-Your-Customer (KYC) and their transmission of trader and transaction data to tax authorities—shapes the effectiveness of tax policies in cryptocurrency markets. Using regulatory events and cross-exchange price variation, we provide initial global evidence that transparency amplifies the capitalization of statutory crypto-tax liabilities into prices. In the United States, Bitcoin prices on exchanges subject to new tax reporting obligations fall by an average of 0.34 % following announcements that raise expectations of information transmission, even without changes in statutory tax liabilities. Across jurisdictions, price declines are significantly larger where reporting systems are more transparent, and in cross-sectional analysis, exchanges that both enforce KYC and transmit information show the strongest price sensitivity to local tax liabilities, particularly where capital controls constrain arbitrage. These findings reveal a transparency–privacy trade-off unique to crypto markets and demonstrate how digital assets provide rare opportunities to test classic tax-capitalization theories under conditions of anonymity and regulatory heterogeneity, with implications for the design of effective tax policies.
The Buru Regency Government, as the party tasked with administering government, development, and public services, is required to report on regional financial accountability as the basis for assessing its financial performance. The purpose of this study is to assess regional financial performance using ratios from 2020 to 2024, consisting of: Regional Fiscal Independence; Effectiveness of PAD Management; Effectiveness of Regional Taxes; Degree of Fiscal Decentralization; Fiscal Dependency; and Growth of Regional Government Finance in Buru Regency. Using secondary data sourced from the Ministry of Finance website, this study concludes that the financial performance of the Buru Regency Government consists of: 1) the regional fiscal autonomy ratio is still very low with an instructive relationship pattern, indicating that the local government is not yet capable of financing its own government activities, development, and services to the community, and the local government still needs intervention from the central government; 2) the fiscal decentralization ratio indicates that the local government's ability to increase its own revenue (PAD) to finance its own development is still very limited; 3) the local tax effectiveness ratio and local revenue (PAD) indicate that the local government is less effective in realizing tax revenue and local revenue (PAD) from the set targets and real potential; 4) The fiscal dependency ratio shows that the Buru Regency local government is still highly dependent on assistance from the central and provincial governments compared to its own regional revenue; 5) The PAD growth ratio shows that the local government is poor/negative in maintaining and increasing PAD.
Abstract The global financial markets are being changed by DeFi's ability to remove central actors to facilitate peer-to-peer transactions. DeFi promotes efficiency, globalization, and economic inclusion, and at the same time, it has raised tax compliance. This study attempts to bridge the gaps by analyzing available scholarly and policy-oriented research, along with recent regulatory initiatives. The study concludes that the tax compliance challenges posed by DeFi's Decentralization, Shrouded Identity, and Composability Features are serious and can overcome the traditional tax reporting mechanisms. The study also suggests the broad directions of gaps in the literature to be addressed in policy-driven and empirical studies in the future. Keywords: DeFi, Blockchain, Tax Compliance, Fintech
Essossinam Pali, Coffi Cyprien Aholou, François Paul Yatta
After several hesitant attempts, Togo has made renewed progress in implementing sustainable decentralization. Municipal and regional elections held in 2019 and 2024 marked a significant institutional step forward. However, this implementation phase remains marked by both achievements and structural challenges. This article explores how local elected officials perceive the decentralization policy and its financing in their municipalities. It formulates the general hypothesis that decentralization fosters the implementation of local public policies when supported by appropriate institutional mechanisms. Based on a quantitative survey conducted in early 2024 among 487 local actors including 477 municipal councilors and 10 prefects the results highlight a range of perceptions. While some elected officials acknowledge improvements in service delivery and institutional support (through tools such as FACT and ANFCT), others stress the persistence of constraints related to financial autonomy, administrative capacities, and citizen participation. The findings suggest that decentralization in Togo is progressing, albeit unevenly, and requires further efforts to consolidate its institutional and operational foundations.
The swift advancement of technology has transformed numerous sectors, particularly the financial services business, with Decentralised Finance (DeFi) emerging as a notable disruptor. To guarantee the sustained development and integration of DeFi, it is necessary to investigate and comprehend the emerging trends in this field. This study presents a bibliometric analysis of 181 Decentralized Finance articles published from 2010 to 2024 in the Scopus database The data were examined and illustrated utilising the VoS viewer platform and R software, yielding both descriptive and visual insights. Authored by 503 researchers across 418 universities, these works span 129 journals and cite 10,428 references. Publications show an annual growth rate of 29.2 %, with 2024 exhibiting unprecedented output. Frontiers in Blockchain leads with six publications, followed by the Journal of Risk and Financial Management. New Zealand tops the citation rankings, led by Auckland University with 338 citations. Bellavitis C. and Chen Y. are the most prolific authors each with 338 citations. The cluster analysis identifies six thematic areas, offering insights into various aspects of decentralized finance. This study offers critical insights for academics, policymakers, and industry practitioners by mapping DeFi's transition from conventional financial systems to decentralized ecosystems. The findings illuminate research gaps, propose future research avenues, and underscore the necessity of developing policies and cyber hygiene protocols to mitigate the risks of decentralized finance. This work thus serves as a valuable resource for advancing the discourse on DeFi and its implications for financial innovation.
The decentralization of international payments is emerging as a transformative trend in the global financial system, driven by blockchain technology, decentralized finance (DeFi), cryptocurrencies, and central bank digital currencies (CBDCs). This paper explores the shift from traditional, centralized payment infrastructures toward decentralized alternatives, assessing their impact on transaction efficiency, cost reduction, financial inclusion, and financial stability. A special focus is placed on the evolving role of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), historically the backbone of international cross-border payments. Through a combination of theoretical review and empirical time series analysis based on SWIFT message data from 2014 to 2022, the study evaluates SWIFT’s resilience and adaptation in the face of decentralization pressures. The findings reveal a permanent upward trend in SWIFT traffic, coupled with seasonal fluctuations, suggesting that while decentralization is expanding, SWIFT remains a central actor by innovating its infrastructure. The study also discusses the regulatory challenges posed by decentralized systems and the need for balanced frameworks to foster innovation while safeguarding stability. This research concludes that international payments, where traditional and decentralized models seem to coexist.
This paper investigated this timeless problem of tax evasion with the use of cryptocurrencies in a post-blockchain reality, in terms of legal grey zones and regulatory frameworks in various jurisdictions. Tax evaders have taken advantage of the legal grey areas, decentralized finance (DeFi) protocols, and privacy-based tools in order to hide their transactions despite the blockchain being transparent. The study used a qualitative multinational comparative research approach in which the authors have used document research and interviews with experts to examine enforcement processes in different jurisdictions including the United States, Canada, Germany, Japan, Australia and Nigeria. Conclusions were that effective statutory frameworks, high technological means of enforcement and stringent penalties were found to impact on the compliance rates positively as can be seen in Germany and Japan. Conversely, in other countries, there were high cases of non-compliance due to weakly disunity of regulation and little technological capacity, e.g., Nigeria and Canada. The introduction of DeFi became another problem since it eliminated centralized intermediaries and made the traditional tax pay reporting system more complicated. Moreover, the paper has highlighted that enforcement tactics should give due attention to enable them to balance between surveillance and privacy safeguards to keep the citizens trusty and willingly follow the law. The solution policy proposals involved integration of legal and legislative frameworks across countries globally, the integration of automated reporting solutions and investment in compliance solutions that preserve privacy. Future study on taxpayer conduct, technological breakthroughs and inter-jurisdictional cooperation to come up with resilient tax governance systems should be a matter of priority. This study added to the argument about an effective and fair establishment as an economy, as well as tax frameworks, goes digital.
Digitalization is reshaping global consumption patterns and exposing the limits of value-added tax (VAT) regimes designed for an analogue economy. While Brazilian tax-reform proposals focus on merging six cascading levies into a single VAT-style tax, this structural simplification alone will not align the system with the realities of cross-border electronic commerce. Drawing on OECD guidelines and the BEPS Action 1 report, this article reviews two decades of international debate on destination-based VAT, especially for business-to-consumer supplies of intangibles. It highlights the practical impasse surrounding customer identification, jurisdictional allocation and collection in high-volume, real-time digital marketplaces. The paper argues that recent suggestions to shift liability to dominant e-commerce platforms, although politically feasible, still rely on “verified self-identification” and fragmented registration procedures that are ill-suited to the velocity of automated transactions. As a forward-looking alternative, the study explores how distributed-ledger technology—particularly smart-contract-enabled split-payment mechanisms executed on blockchain networks and settled with central-bank digital currencies—could embed compliance by design, enhance traceability, and lower administrative costs for both taxpayers and revenue authorities. Implementation prerequisites (digital identities, standardized e-invoicing, regulatory sandboxes) and technological hurdles (scalability, interoperability, tokenization) are mapped, providing a research agenda for a VAT 4.0 architecture. The conclusion contends that harnessing blockchain’s immutability and programmability is essential for a resilient, fraud-resistant indirect-tax system capable of addressing the borderless nature of 21st-century commerce.
The rapid proliferation of cryptocurrencies has presented significant challenges to tax authorities and financial regulators worldwide. This study critically examines the legal, institutional, and regulatory frameworks governing cryptocurrency taxation across jurisdictions, focusing on the inconsistencies, loopholes, and enforcement difficulties that hinder effective compliance and oversight. The decentralized nature of blockchain-based financial systems, alongside the anonymity of cryptocurrency transactions, complicates traditional taxation and regulatory models. The primary objective is to identify and analyse the key regulatory challenges, evaluate legal frameworks in selected jurisdictions, and provide recommendations for policy harmonization and improved compliance mechanisms. Using a systematic literature review of 40 peer-reviewed articles from 2013 to 2024, this study synthesizes academic insights across legal, financial, and technological domains. Inclusion criteria focused on papers discussing cryptocurrency taxation, DeFi, AML, and regulatory policy analysis. The review reveals fragmented tax treatment, limited enforcement capacity, growing use of DeFi tools to evade compliance, and the lack of international regulatory alignment. Current regulatory models are outdated and jurisdiction-specific, making them ineffective against borderless crypto activity. The study recommends global regulatory harmonization, adoption of risk-based frameworks, public-private cooperation, and investment in regulatory technology and capacity building.
Equitable education systems contribute to fostering thriving societies. However, decentralization reforms in school finance pose challenges to equity and social justice. Using longitudinal multilevel models, we examined the trends in equity of local education funding distribution in 250 Israeli local authorities from 2014 to 2020. Our findings revealed a consistently inequitable allocation: high-SES and majority-populated areas allocated double the resources compared with low-SES and minority-populated areas, with funding disparities increasing over time. These findings suggest the need for regulations governing local funding, particularly in diverse societies, to promote equity in education finance.
Fran Brahimi, Mariel Frroku, Skënder Uku, Emiljan Mustaqe
A significant part of the literature on fiscal decentralization confirms that the greater the ability of decentralized governments to adapt policies to local preferences and to be innovative in providing public services, the greater the potential for investments and economic growth. This paper examines the dynamic effects and relationship between own source revenues, unconditional transfers, and local public investments. Over the past decades, fiscal and financial decentralization in Albania has made steady progress. However, the increasing responsibilities of local governments have intensified the need to raise the share of local revenues and expenditures relative to GDP and increase revenue from unconditional transfers. Following the administrative-territorial reform, fiscal decentralization has dynamically evolved, boosting local public revenues and granting greater discretion in their use to meet community needs. The specific law on local self-government finances led to increases in both own revenue and revenue from unconditional transfers. Further reforms have improved local public finance management, including local budgeting reforms, enhanced transparency of tax collection and expenditure, and self-assessment and monitoring of local government's financial status. These modernization efforts related to local finances have yielded positive results regarding macroeconomic stability, fund predictability, and transparent use of public funds. Consequently, central and local governments prioritize public investments in infrastructure and sector revitalization in their budgets. Local public investments have risen annually, driven by increased local income from taxes and government transfers. This growth reflects the focus of local and central development policies on addressing infrastructure and logistical challenges. The consolidation of decentralization and stable central budget transfers have created favorable conditions for local governments to implement new policies enhancing service quality and public investment performance.