Blockchain Papers

Abhinayan Basu Bal

The author examines the current treatment of Bitcoin in numerous EU and non-EU countries, and analyses the opinion of the Advocate General in a Bitcoin case that is currently pending before the European Court of Justice.

Paula Alexandra Nazareth

The current decentralization process escalating in Brazil since 1980 flanked by the endeavor of the democratization in the country, strengthened the role of the municipality once it was elevated to the status of autonomous federal entity by the Brazilian Federal Constitution of 1988. Upon 25 years of the given new democratic legacy, the municipal revenues increased in volume, in comparison to other spheres, due to the establishment of law and regulations accrediting new responsibilities and new obligations for the municipality. Although it was transformed into politics generator-making agent with potential to promote the local development, by means of power entitlement to be effective as well as the decision towards the design of such politics, the municipality has restricted autonomy towards political decision-making: most part of the resources tend to be transferred to a pre-defined destination via legislation or in the several programs set by the central government. Thus, public expenditures are increasingly as much as to be defined by federal rules as well as financial releases by conditional transfers to sectorial funds, restricted, in practice, to the autonomy of the local expenses. Henceforth, this essay is focused on the contribution to the debate about the possibility of municipal administrations to perform fundamental role of promotions of local development, with greater citizen participation and reduction of social inequalities of which surrounds Brazil, by highlighting elements for the proper analysis of the decentralization process towards the impact of public finance and municipal autonomy.

THOMAS MOGALE, LOUIS A. PICARD

Introduction A successful local government is vital for the stability and economic success of developing countries in Africa. South Africa illustrates the importance of governance. Post-1994 South Africa emerged from a highly fragmented intergovernmental fiscal Contents Introduction ......................................................................................................297 Fiscal Decentralization: The Role of National Substructures ............................. 300 Overarching Legislative and Policy Frameworks of the Fiscal System .................302 Legislative Basis for Financial Management .......................................................305 Assignment and Division of Revenue ............................................................... 306 How to Manage Vertical and Horizontal Imbalances ................................... 308 Conclusion ........................................................................................................309 References ......................................................................................................... 311 relations system based on the ethnic homelands and African townships but within a unitary and highly centralized local government system. The postapartheid government tried to move to a radically decentralized fiscal system. Given the historical and geographical diversities of 283 newly established local government structures, fiscal decentralization raised a new set of questions of how national government could achieve horizontal and vertical equity.

Benjamin W. Akins, Jennifer Chapman, Jason M. Gordon

A Whole New World: Income Tax Considerations of the Bitcoin Economy

Thibaud Guillebon

International audience

Tetsuya Saito

No abstract is available for this record.

Daniel Folkinshteyn, Mark M. Lennon, Tim Reilly

No abstract is available for this record.

Robert Viglione

No abstract is available for this record.

Aleksandra Bal

No abstract is available for this record.

Francis E. Hutchinson

The Malaysian state is usually portrayed as centralized, top-heavy, and far-reaching. Bureaucrats in the powerful Prime Minister 's Office or Economic Planning Unit design ambitious programmes for the country, then government agencies headquartered in the nation's capital implement them in all corners of Malaysia, from Perlis to Sabah. While true to a certain extent, this depiction overlooks the fact that Malaysia has a federal government structure. In addition to a central government centred in Putrajaya, the country has thirteen state governments that are responsible for particular jurisdictions; receive revenue from specific sources; and have constitutionally-stipulated responsibilities. They are important providers of goods and services, and can play a role in creating an enabling environment for business. However, Malaysia's governance structure is heavily weighted towards the federal government, which receives the bulk of revenue and is responsible for most public services. In fact, the country is one of the world's most centralized federations, with the centre receiving almost 90 per cent of all government revenue. And, above and beyond duties for fiscal, monetary, and trade policy, the federal government is responsible for most types of infrastructure, science and technology policy, and all levels of education. While the image of a strong central state may hold appeal, an excessive concentration of responsibilities may not always be optimal. Public finance literature holds that an appropriate attribution of responsibilities and revenue sources between levels of government can enhance welfare. For example, while some services benefit from economies of scale and are best provided nationally, others require detailed knowledge of local conditions and are best supplied locally. Over the past thirty years, a “Silent Revolution” of decentralization has swept the globe, as sub-national governments have been empowered with additional responsibilities, autonomy, and revenue. However, Malaysia constitutes an important exception. Unlike neighbouring Philippines or Indonesia, that had to construct new levels of government to decentralize, it already has an established federal system. Despite this, Malaysia has continued to centralize responsibilities at the national level. If it continues, this trend will stifle the vital role that state governments can play in creating an enabling environment for business and leveraging local-level knowledge to foster economic growth.

Dorcas Mugure Mwangi

The rationale for considering decentralization in anti-poverty programs is that it might have positive effects on the economic development. Decentralization brings the government closer to the people. Local officials are better informed on the local needs, and are thus more capable of providing the optimal mix of local policies. While the SMEs subsector constitute close to 80% of employment, it only contributes to about twenty percent (20%) of the Gross Domestic Product (GDP) in 2011 in Kenya. This implies dismal subsector performance despite its potential contribution to employment, income and equity as was asserted in the ILO report in 1972. The performance of the SMEs in Kenya is linked to several constraints among which the regulatory and institutional framework is alleged to be one of the factors. SMEs in Kenya are threatened for survival as a competitive enterprise. The purpose of the study was to establish the effect of devolution on small and medium enterprises performance in Kenya. The study adopted a descriptive survey research design. The target population of this study composed of representatives of the various industries including the matatu, dairy, supermarkets, jua kali and small manufacturing companies in Nairobi and its environs. The target population of this study was therefore 1015. The study used stratified random sampling method to select 10% of the respondents who formed a sampling frame of 102 respondents. Data was collected using questionnaires. Data was analyzed using descriptive statistics done with the help of software program SPSS version 21 and presented using frequency tables. In addition, multivariate regression model was applied to determine the relative importance of each of the two variables with respect to SME performance. The study revealed that that fees and levies, affect the performance of Small and Medium Enterprises in Kenya to a moderate extent. The study concluded that fees and levies, cess and rates by the county government affect the performance of Small and Medium Enterprises in Kenya. The study also concluded that SME financing mechanism, fair trading practices, capacity development, mechanism for value addition and increase in supply, distribution and access to goods and services affect the performance of Small and Medium Enterprises affect the performance of SMEs in Kenya. The recommends that the county government should use the finances collected from fees and levies, cess and rates in proper and controlled manner with a goal of improving the working environment for the SMEs in Kenya. The study also recommends that the county government should put in strict measures to ensure that there is no corruption in the fees and levies, cess and rates collection process to ensure that the amount collected do not go to the hands of few individuals and that a substantial amount can be received to support the plans and policies of the county government. The study suggested that a similar study should be carried out in other counties to find out whether it will yield the same results. The study focused on SMEs, another study should be carried out to find out the effect of devolution on large companies.

Christian Thurow

No abstract is available for this record.

Alberto Porto, Natalia Porto, Dario Tortarolo

This article examines the relationship between economic integration and fiscal decentralization for Argentina and Brazil. Economic openness adds costs and benefits to fiscal decentralization, beyond those analyzed in closed economies. The relationships among variables with panel data for the period 1988–2005 are estimated. The innovation of the article lies in considering decentralization at the level of states/provinces. In Brazil, the effect of openness on decentralization is negative and significant, both for expenditures and revenues; in Argentina, the effect is negative or not significant. This difference between countries is based on the different structure of subnational government financing.

Mattijs Lambooij

Bitcoins are increasingly being used in commercial transactions. Thinking about the tax consequences thereof is, however, still in its infancy. This article discusses the current state of play and reports on some guidance already provided by tax authorities. The key issue to consider seems to be the VAT treatment of bitcoin transactions between two entrepreneurs.

Beatriz Cuadrado‐Ballesteros

No abstract is available for this record.

Niels Vandezande

With the increasing use of virtual currencies such as bitcoin, tax officials have started paying attention. Privacy and virtual identity specialist Niels Vandezande of the Interdisciplinary Centre for Law and ICT (ICRI) at the KU Leuven – University of Leuven explains the implications of the recent IRS ruling on Bitcoin in the US, arguing that it may undermine the core reasons such virtual currencies were created.

Z.A. Konczacki, Jane L. Parpart, Timothy M. Shaw

For nearly thirty years the South African government has consistently and with increasing vigour promoted a policy of decentralizing industry to peripheral regions where many blacks live in poverty, prevented from leaving by apartheid laws. Of the state’s resources devoted to economic development, a very substantial proportion has been set aside for the programme. The funds devoted to direct industrial decentralization incentives alone currently swallow about one-half of the budget of the Department of Industry and Commerce. If other budgetary allocations to decentralization are included, such as those allocated to financing the Development Bank of South Africa and other funds devoted to the infrastructural development that makes the programme possible, decentralization takes a large bite out of the South African government’s budget.

Tadej Ošlovnik

Razsirjenost uporabe virtualnih denarnih valut se v zadnjem casu naglo povecuje, kar napeljuje na potrebo po podrobnejsi seznanitvi z njimi. Virtualne denarne valute, ki iz tehnicnega vidika ponujajo relativno dovrsen in delujoc sistem, obenem prinasajo stevilne negotovosti na podrocju njihovega umescanja v obstojece zakonodajne okvire. Zakonodajalci in pravni strokovnjaki po svetu so sele pred kratkim zaceli odkrivati ta fenomen. V diplomskem delu je iz pravne, ekonomske in tehnicne plati predstavljen sistem virtualnih denarnih valut s poudarkom na valuti bitcoin. Sirok vpogled v delovanje sistema je podlaga za razumevanje zakonodajnih procesov, ki bodo sooblikovali prihodnost virtualnih denarnih valut. Diplomsko delo povzema del zakonodajnih in regulacijskih procesov v razlicnih pravnih redih, ki na teoreticni in prakticni ravni skusajo vkljuciti virtualne denarne valute v urejene pravne okvire.

David Nyange, David Tschirley, Hussein Nassoro, Abeid Francis Gaspar · 8 authors

EXECUTIVE SUMMARY Rural taxation policy is a major issue in many countries of Africa as they pursue more decentralized forms of governing and at the same time work to enhance the effectiveness, efficiency, and fairness of their tax systems. Tanzania has struggled with this issue since at least 1962, when it expanded countrywide the limited decentralization that had occurred under the colonial regime, then abolished LGAs in 1972 in favor of “Madaraka Mikoani,” only to reinstate them and enshrine them in the constitution in 1984. With wide powers to set tax policy and practice at local level, made possible by the Local Government Finance Act (LGFA) of 1982, Tanzania soon experienced a dizzying array of taxes and fees, with dramatically differing rates across LGAs. The situation became so extreme that some claimed that Tanzania by the late 1990s had “about 110 local authorities ... each with a different tax system” (Fjeldstad and Semboja 2000). A sustained effort at reform culminated in 2003, when the “head tax” and a series of “nuisance taxes” were abolished, and the produce cess was limited to a maximum of 5% (compared to rates as high as 20% in the past). Though the resulting system of local taxation is substantially less complex, less variable across LGAs, and less onerous than it was prior to these reforms, important problems remain, and stakeholder demands for further reform have been growing. Since the produce cess became the most important source of local revenue after 2003, much of the demand for reform has focused on it. In response to these concerns, GoT included a commitment to “reduce or abolish” produce cess when it signed the G8’s “New Alliance for Food Security and Nutrition” declaration. This study took advantage of a newly available database of LGA revenue and expenditure and complemented it with fieldwork in 27 LGAs with varying levels of reliance on the produce cess. Its overall purpose is to generate new empirical understanding that contributes to the on-going debate on produce cess and that informs the GoT on pros and cons of potential options for reform. Key new findings include: 1. Dependence on the produce cess varies widely among rural LGAs, from 0% of total locally generated revenue in Ngorongoro to 90% in Urambo; 2. Relative to the value of their marketed production, traditional export crops generate more than three times as much cess revenue as do food crops; 3. Much potential cess revenue goes uncollected: nationally, LGAs collect not more than one- quarter of the revenue potentially available from produce cess charges. This low level of collection reflects both limited human and institutional capacity at local level and widespread tax evasion, some of it likely featuring the collaboration of some local officials; 4. Because it is charged on the gross value of production, current cess rates can result in very high tax (even confiscatory) on net revenue among farmers that use a large amount of inputs but experience small net margins; Confirmed previous findings include: 1. With the reforms of 2003, local revenue fell sharply as a share of total LGA revenue, from 20% to a current level of 7%. Central government transfers provide the rest. Such a low share of locally generated revenue makes meaningful decentralization quite challenging. 2. Nationally, cess contributes only 1.8% of total LGA revenue, with other local taxes accounting for 5%; 3. Yet cess is the largest source of rural LGA own revenue, at 43%. Because this revenue is very flexible (it does not come with the spending dictates that accompany central government transfers), it is highly valued by local authorities, and is largely used for Councilor allowances and other “costs of doing business”; 4. Cess rates are highly variable across LGAs, varying by a factor of as much as four (Beans in Handeni at Tshs 1000/bag vs. Lushoto at Tshs 4000/bag); 5. Tax evasion is widespread and likely a more serious problem than tax avoidance; 6. But avoidance – farmers or traders or others changing their production and marketing behavior due to the tax (and especially due to the variation over space in tax rates) – can be a serious problem in particular instances. For example, some sugarcane growers in Mvomero are considering shifting their farming activities to Kilombero due to lower cess rates in the latter; and farmers and traders report that traders favor some districts over others in their food trade due to differences in cess rates; Reform options include: 1. Abolish cess in one step 2. Gradual phasing out of cess 3. Reduce the cess rate, broaden its base, and improve capacity for collection 4. Institute a differential cess for food- and non-food crops 5. Completely remove cess in food crops, leaving it only for traditional and other export crops. Simple simulations of option 3 combined with option 4 (3% for traditional cash crops, 2% for food crops) indicate that LGAs would need to improve their efficiency in collection (the share of potential cess that is actually collected) from the current estimated 28% to 41% to maintain revenue, and would increase revenue with further improvements. Complete elimination of cess on food crops (option 5) would make LGA’s jobs quite challenging, especially if rates were reduced on traditional export crops. Leaving the rate on these crops unchanged at 5%, LGAs would have to achieve nearly 60% efficiency in their collection to maintain their current revenues; dropping the cess on traditional export crops to 3% while eliminating it on food crops would require an almost certainly unattainable 83% efficiency. Based on the analysis in the paper, and in keeping with the view that improvement in tax systems is a long-term process featuring continuous, incremental improvement, the report suggests that option 3 combined with option 4 – reducing the rate of the cess (thereby reducing its variability over space), introducing a slight differential between food crops and traditional export crops, and broadening the cess collection base by working continuously to improve the human and institutional capacity of LGAs to collect taxes in efficient and fair fashion, is likely to be the best option for Tanzania. Piloting of technological and institutional innovations such as the use of mobile money for cess payment are proposed as one way to address both the inadequate local capacity and the scope for corruption in cess collection.

Kang Lee

No abstract is available for this record.

Kwaku D. Kessey

The local governance in Ghana has been practised using different models over the years. These models were introduced by the colonial government which was highly centralised. The dynamics of local government in Ghana changed significantly in 1988, when decentralised system of local government was introduced. Several dimensions of Metropolitan governance in Ghana have been considered ineffective and among them is the fiscal administration which attracts several unpleasant comments from the citizenry. Notwithstanding the fact that the Local Government system in Ghana was instituted in 1852 and independent town councils were established in Sekondi- Takoradi and Kumasi in 1894 and 1935 respectively; none of them is free from this allegation. The purpose of the research was to analyse the financial systems of the metropolises. The Metropolises on average generate just about 45 per cent of its total income internally. This is a case of overdependence on transfers from the Central government and other external sponsors. Therefore, it is not strange that the Metropolitan governments are financially controlled by the Central government. The uninformed mind may prescribe more local fiscal empowerment for the Metropolises as the way forward. However, empowerment with poor fiscal administration could hardly turn the tide. As the study revealed, the system of fiscal administration is influenced by political, economic, social, technical administrative and attitudinal factors. The local tax structure has only one main item namely immovable property tax which is poorly administered in terms of tax base determination; low rate impost and poor mobilization. The large immovable property tax is left in arrears and eventually written off. The metropolitan financial performance also needs improvement from within. MMDAs, introduction of new revenue items and increase in rates as basis for increasing internal revenue, hence many of them have expanded revenue structure with several unproductive items. This does not make local revenue mobilisation cost effective. The MMDAs over depend on external funds for their operation, thus compromising the autonomy of local authorities. To overcome this might require a long term fiscal strategic plan which should reconsider the fiscal empowerment relationship between central and local government. The local authorities on their part should shift toward partnership investment as a means of achieving financial breakthrough otherwise the decentralisation system would become a mirage to local residents who initially accepted it as system for accelerated local development.

Redmar Wolf

A relatively new phenomenon is the appearance of cryptocurrencies with bitcoins as their most prominent representative. In this article, the author discusses the VAT aspects of the use, exchange and mining of bitcoins under the EU VAT system.

Patrick McLeod

No abstract is available for this record.

Richard M. Bird, Enid Slack

SUMMARY Many countries are decentralizing in various ways. Decentralization is often intended at least partly to make government more efficient, flexible, and responsive. Many studies have evaluated the effects of decentralization on the provision of such services as health and education as well as on corruption, stability, and growth. Because what governments do and how well they do it is inseparably entangled with the question of how they are financed, this article outlines why and how a key element in a sound decentralization program should be to strengthen the linkage between local expenditures and local revenues—called here the Wicksellian Connection. Copyright © 2014 John Wiley & Sons, Ltd.