Technological innovation is transforming the provision of financial services and products in Cambodia. Payment services in particular have gone through significant evolution in recent years, through the introduction of new payment methods, platforms and interfaces. This chapter provides an overview of Cambodiaâs payment landscape, and how an efficient payment system could promote the use of local currency. This chapter draws on the real case of the Bakong payment system, which uses blockchain technology and distributed ledger technology (DLT) to leapfrog traditional technological constraints and creates interoperability between all players, addressing challenges such transaction fees, financial inclusion, and use of local currency.
Allah Ditta Nawaz, Niaz Ahmed Bhutto, Shabeer Khan
Abstract The global challenge of tax evasion presents a profound impact, leading to diminished tax revenues that are the lifeblood of a nation's seamless operations. This issue is exacerbated by the ingenious strategies employed by tax evaders, which distort economic performance benchmarks and create financial imbalances. Amidst these concerns, cryptocurrencies have emerged as a contentious subject, accused of abetting tax evasion. The covert nature of cryptocurrency transactions poses a significant hurdle for regulatory oversight and transaction recording. In response to this burgeoning concern, our comprehensive study delves into the intricate interplay between cryptocurrencies and tax evasion, utilizing annual data spanning from 2013 to 2020. With an extensive scope testing thirty two hypotheses and twelve interaction terms, our research unfurls the multifaceted dynamics at play. This study embarks by constructing a latest tax evasion index for the esteemed G-7 nations. Employing asymmetric/symmetric panel techniques, our investigation unveils a compelling revelation: cryptocurrencies exert a counteractive influence on instances of tax evasion. Furthermore, the nexus between economic performance and cryptocurrencies bears considerable sway over their correlation with tax evasion. Innovatively, our research charts the intricate relationship between tax evasion and cryptocurrencies across varying levels of economic performance. Notably, our findings underscore that Economic Freedom, Government Integrity, Government Spending, Business Freedom, Labor Freedom, Monetary Freedom, Investment Freedom, and Bureaucracy function as moderators, influencing the association between tax evasion and cryptocurrencies. These insights transcend academia, delivering significant implications to policymakers with informed guidance to devise nuanced strategies and policies.
The decentralization of government, whether in federations or unitary states, raises some of the most intractable problems in the field of public finance. Financial dependency and any centralization that flows from it may thus be the inevitable consequence of using decentralized government in the pursuit of redistributive political objectives. Most notably there is a clear link between the financing of area governments and their relations with the centre. This chapter examines the issues, by examining the main sources of revenue available to area government; by looking at recent trends in subnational expenditure and the implications of these for revenues; by examining the reasons for the growing dependency on higher-level governments and, by trying to disentangle strands in the argument about the relationship between dependency and autonomy. There appears to be a widespread trend towards general grants, both to achieve territorial equality and to provide for greater decentralization.
The global backlash against tax havens has pushed secrecy-seeking capital to explore alternative opportunities in non-tax-haven countries and new financial technologies (FinTech). We identify two major corporate practicesâorganizational ring-fencing and swarmingâthat have enabled secrecy-seeking capital to adapt to new regulatory realities and illustrate these practices empirically with the extreme case of Estonia. In the 2010s, several Nordic banks turned their Estonian offices into hotbeds of high-risk transactions, ring-fencing their Baltic affiliates from their group-level systems and generating several money laundering scandals with global repercussions. More recently, secrecy-seeking capital âswarmedâ into Estoniaâs large cryptocurrency sector and thereby thwarted effective supervision of the activities of the firms involved. Neither swarming nor organizational ring-fencing have been sufficiently explained by existing approaches in International Political Economy (IPE) as new core practices of secrecy-seeking capital. We study both practices in a mixed-methods research design and provide novel empirical insights to illuminate this phenomenon. In filling this gap, our study paves the way for a second generation of global tax governance scholarship amidst the cryptocurrency and FinTech boom, and calls for a research agenda that addresses these new practices that take advantage of the lack of administrative capabilities in non-tax-haven jurisdictions.
The subject of the study is modernization of budget relations based on horizontal decentralized connections. The relevance of the study is mitigation of the shortcomings and risks in 2023, especially the tax on excess profits of previous years. The goal of the study is to develop a fundamentally different scheme for financing a part of government spending on the principles of âuberizationâ that is mutually beneficial for the state and business. The objective of the study is to improve the mechanism of the one-time fee on large business (windfall tax). The research method is the analysis of business community opinions, foreign experience, results of research work of the Department of Public Finance and the Department of Taxation and Tax Administration of the Financial University. The basic principles of building a new decentralized electronic platform are described. Specific examples of federal budget expenditures that should be âuberizedâ in the first place are considered: federal subsidies for NPOs and financing of the âKrug Dobraâ fund. The scientific novelty and practical significance of the proposed new mechanism for additional financing of public expenditures is direct connection of payers and recipients of budget subsidies on an electronic platform while preserving the control functions of the State. The conclusion is made about the practical applicability of the proposed new scheme of âuberizationâ of budgetary relations as a mechanism for collecting the one-time fee on large businesses (windfall tax), which can actually unload the federal budget, âliberatingâ it from part of expenses, without creating additional sanctions and other risks for participants.
Katherine Baer, Ruud de Mooij, Shafik Hebous, Michael Keen
Abstract Policy-makers are struggling to accommodate cryptocurrencies within tax systems not designed to handle them; this paper reviews the issues that arise. The greatest challenges are for implementation: cryptoâs pseudonymity is an inherent obstacle to third-party reporting. Design problems arise from cryptocurrenciesâ dual nature as investment assets and means of payment: more straightforward is a compelling case for corrective taxation of carbon-intensive mining. Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes. The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars, but the more profound risks may ultimately be for VAT/sales taxes.
This is the data repository for the project 'From tax havens to cryptocurrencies'. You will find the aggregated data used for the interlock analysis, as well as the used Python script, the Figures created for the paper and some basic descriptive statistics from the analysis in Gephi.
ABSTRACT The IRS issued Notice 2014-21 in which they classify cryptocurrency as property. However, the variety and usage of cryptocurrency has increased since Notice 2014-21 so that cryptocurrency has become a significant and widely accepted component of the global financial system. Cryptocurrency includes a diverse group of digital assets with different origins and uses. One type of cryptocurrency, Bitcoin, has been adopted as legal tender in two countries. Yet the IRS guidance for reporting cryptocurrency has not changed. In this paper, we examine the current regulatory framework regarding cryptocurrency. Next, we discuss alternative tax treatments for cryptocurrency and the tax effects of those potential treatments. Finally, we make policy recommendations for the tax treatment of cryptocurrency.
As the decentralized finance industry gains traction, governments worldwide are creating or modifying legislations to regulate such financial activities. To avoid these new legislations, decentralized finance enterprises may shop for fiscally advantageous jurisdictions. This study explores global tax evasion opportunities for decentralized finance enterprises. Opportunities are identified by considering various jurisdictionsâ tax laws on cryptocurrencies along with their corporate income tax rates, corporate capital gains tax rates, level of financial development and level of cryptocurrency adoption. They are visualized with the manifold approximation and projection for dimension reduction (UMAP) technique. The study results show that there exist a substantial number of tax evasion opportunities for decentralized finance enterprises through both traditional offshore jurisdictions and crypto-advantageous jurisdictions. The latter jurisdictions are usually considered high-tax fiscal regimes; but, given that they do not apply tax laws, tax evasion opportunities arise, especially in jurisdictions that have high financial development and high cryptocurrency adoption. Further research should investigate these new opportunities and how they are evolving. Understanding the global landscape surrounding tax evasion opportunities in decentralized finance represents a first step at preventing corporate capital flight of cryptocurrencies.
This article discusses the VAT treatment of non-fungible tokens (NFTs) in the European Union. These tokens have been on the market for some time, but their trade volume has grown exponentially recently. Tax authorities have developed some interest in them as a potential new source of revenue, paying attention to their ecosystem and the parties involved. Some tax authorities have already taken a position, while others have remained silent, waiting for market developments. There are still questions to be answered on the VAT implications of NFT supplies, but initial standpoints can be taken. The European Union has already begun to work towards a common position on the VAT treatment of NFT supplies. The difficulty in determining that treatment lies in the fact that the nature of NFTs has not been defined in a harmonized way. This article intends to briefly analyse each of the VAT components contributing to this definition.
As an important part of the reform process of state-owned enterprises in recent years, government decentralization has a profound impact on the business activities of state-owned enterprises. The cash holding level of state-owned enterprises is not only related to the liquidity of state-owned enterprises, but also affects the effective value of state-owned enterprises in the product market competition. Taking the A-share state-owned listed companies in Shanghai and Shenzhen stock exchanges from 2001 to 2019 as samples, the OLS model is used to empirically test the impact of the government's willingness to delegate power on the cash holding level of state-owned enterprises. The research finds that the government decentralization has a significant negative relationship with the cash holding level of state-owned enterprises. Secondly, with the help of the intermediary effect model, the study finds that the government decentralization is to relieve the financing constraints of enterprises, reduce the policy burden of state-owned enterprises, and then reduce the cash holdings of enterprises. The research conclusion not only expands the relevant literature research on the impact of government decentralization on the cash holding level of state-owned enterprises, but also provides some reference for state-owned enterprises on how to improve their governance structure and capital management system.
This research considers a new dimension of the effects of the underground sector by examining the spillovers on cryptocurrency holdings. Cryptocurrencies offer a relatively greater ability to dodge taxes and ensure the anonymity of holders, providing attractive avenues for underground operators to stash their informal-sector earnings. Our results, based on data from more than 50 nations, show that a greater prevalence of the underground economy in a nation is indeed associated with greater cryptocurrency holdings. This result holds across an alternative measure of the shadow economy, and when the bi-directional causality between the shadow economy and cryptocurrency holdings is considered. In other noteworthy findings, greater FDI crowded out cryptocurrency holdings, while greater financial globalization and greater economic uncertainty, ceteris paribus, increased them.
Tax aspects of tokenization from the Perspective of Czech and foreign legislation Abstract in English The aim of this thesis is to provide a comprehensive overview of tax obligations related to the tokenization process using Distributed Ledger Technology from the perspective of Czech law, analyze problematic areas of applicable tax legislation and suggest potential changes of current tax law. This diploma thesis also aims to provide a comparative view of the taxation of the tokenization process in selected countries of the world and thus evaluate the different tax obligations from the perspective of the tax subject. The first part of the thesis first briefly introduces cryptoactive assets and then describes their legal nature. Furthermore, this section discusses the definition of cryptoassets in relation to cryptocurrencies and the definition of the term token. The second part is focused on a closer analysis of the tokenization process and the tokens resulting from it. The focus is mainly on the classification of tokens and the comparison of different approaches to classification by different jurisdictions. Depending on the purpose of tokenization, tokens of different legal nature with different tax obligations are issued, therefore it is crucial to define the types of issued tokens and determine their...
Abstract Canada has evolved into one of the most fiscally decentralized federations in the world. Provinces enjoy considerable autonomy and play a central role in designing and implementing economic and social policies. This chapter outlines key features of Canadian fiscal federalism, especially the extensive decentralization of legislative responsibilities and taxation powers to provincial governments, the wide-ranging intergovernmental transfer system designed to maintain fiscal balance between orders of governments and among provinces, as well as the mechanisms in place to promote some harmonization of policies and cooperation among provinces. Current challenges to Canadian fiscal federalism are outlined including pressures on horizontal and vertical fiscal balance associated with demographic changes, rapidly increasing costs in the public health care system which have been intensified by the Covid-19 pandemic, persistent tensions associated with the geographic concentration of natural resources, as well as pressures on municipal finance resulting from ongoing urbanization and growing infrastructure needs, among others.
This work focuses on the calculation and comparison of the burden of personal income tax on cryptocurrencies and their mining in the Czech Republic, to obtain the necessary information and a better view of their taxation. The research part of this thesis describes the history, technology of cryptocurrencies, their use and the legislative frameworks needed to calculate the personal income tax on cryptocurrencies. In the practical part, calculations of personal income tax and comparison of the burden of various situations that a taxpayer in the Czech Republic may encounter when trading or mining cryptocurrencies are made.
Rafael Berriel, Eugenia Gonzalez-Aguado, Patrick J. Kehoe, Elena Pastorino
We apply ideas from fiscal federalism to reassess how fiscal authority should be delegated within a monetary union.In a real-economy model with no fiscal externalities, in which local fiscal authorities have an informational advantage about the preferences of their citizens for public spending relative to a fiscal union, a natural generalization of the classic decentralization result by Oates (1972) applies.Namely, a decentralized fiscal regime dominates a fiscal union, and the degree of dominance increases as the information of the fiscal union worsens in quality.In the presence of direct fiscal externalities across countries, however, a decentralized regime is optimal for small federations of countries, whereas a centralized regime is optimal for large ones.We then consider a monetary-economy model, in which governments finance their expenditures with nominal debt and inflation has a negative impact on aggregate productivity.If the monetary authority can commit to an inflation policy, then a version of Oates (1972)'s decentralization result holds.By contrast, when the monetary authority lacks commitment power, the resulting time-inconsistency problem generates an indirect endogenous fiscal externality.In this case, when a country-level fiscal authority chooses a higher level of nominal debt, it induces the monetary authority to inflate more to reduce the level of distortionary taxes needed to finance the higher debt.Because country-level fiscal authorities do not take into account the costs to other countries of the inflation that their fiscal policies induce, a negative fiscal externality arises.This externality naturally becomes more severe as the number of countries in the monetary union increases.Hence, as in the real-economy model, a decentralized fiscal regime is optimal for small monetary unions, whereas a fiscal union is optimal for sufficiently large ones.Our key result is that as the size of a monetary union increases, it becomes relatively more desirable to centralize fiscal authority.We conclude by discussing the implications of our results for the debate on the integration of fiscal policy within the EU and its enlargement.
The taxation of bitcoins and similar cryptoassets is of immense economic importance to the individual taxpayer and to society as a whole. In recent years, they have effectuated a number of tax law issues in Denmark. In Norway, Sweden, and Denmark, the taxation of bitcoins and similar cryptoassets is based on the general rules of tax law. This article contains a comparative analysis of the three Scandinavian countriesâ tax treatment of gains and losses on them. The analysis shows that the Norwegian and Swedish rules that have been significantly changed and modernized do not at all present the same challenges as the Danish rules. In Denmark, there is need for uniformity, predictability, and clarity to be introduced into the taxation rules. Therefore, the article also provides some reflections how to change the Danish tax legislation. Bitcoins, cryptocurrencies, cryptoassets, capital gains taxation, Danish income tax, Norwegian income tax, Swedish income tax, speculation taxation
The traditional approach of public choice suggests that decentralization in the form of a fiercer competition may play an efficient constraint on the growth of self-interested governments. This paper analyzes the effect of decentralization on Leviathan state governments in the presence of intergovernmental grants provided by a federal layer. Under decentralized leadership, state governments strategically set their tax policy and wasteful consumption of public expenditures by anticipating the reaction of the federal government in terms of grants. The transfer scheme eliminates any incentive to engage in tax competition. However, it also creates an opportunity for state policy-makers to pass the financing of a part of their inefficient expenditures onto other members of the federation. In contrast to the conventional wisdom of public choice that focuses on simultaneous central and local decisions, increased competition in the decentralized leadership equilibrium might reduce citizens welfare. Decentralization enhances the sharing of wasteful expenditures and the incentives to extract rents from tax revenues. The conditions under which more competition leads to higher wasteful expenditures and welfare worsening are derived.