2004 Fiscal Year Final Research Report Summary
The programme of harmonizing consumption tax systems in the integration of Asian economic region
| Project/Area Number |
14530081
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済政策(含経済事情)
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| Research Institution | Kyushu Sangyo University |
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Principal Investigator |
YAMAMOTO Iwao Kyushu Sangyo University, Faculty of Economics, Professor, 経済学部, 教授 (30131733)
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| Project Period (FY) |
2002 – 2004
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| Keywords | Asian economic region / Tax reform / Dual VAT / Fiscal deficit / Taxation of inter-jurisdictional trade / Fiscal transparency / Intergovernmental fiscal transfer system / Decentralization |
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| Research Abstract |
The main purpose of this research project is to analyze different developing processea of VAT system in EU, Canada and India, and propose the reform programme of feasible type of VAT on inter-jurisdictional trade as well as desirable harmonizing processes. Some important results of this research project are as follows :
(1)We have four types of VAT on inter-jurisdictional trade which would be operational without border controls and on the destination principle : CVAT proposed by Ricardo Varsano and Charles McLure ; VIVAT by Michael Keen and Stephan Smith ; Dual VAT by Richard Bird and Pierre-Pascal Gendron ; PVAT by Satya Poddar and Eric Hutton. We have reviewed these VATS and concluded that PVAT would be an optimal VAT on inter jurisdictional trade in the Asian economic region.
(2)The Fiscal Responsibility and Budget Management Act, 2003 prescribes the process of fiscal consolidation by 2007-08 in India. The UPA government which took office in 2004, has postponed the goal of reducing re
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venue and fiscal deficits to 2008-09. The reduction of fiscal deficit needed to reform domestic trade taxes, particularly state sales taxes. The purpose of domestic trade taxes reform was an introduction of VAT on both levels of centre and states. The shift from state sales taxes to state level VATS had been delayed, but 21 among 29 states have introduced state VATs in April 2005. The Indian dual VAT system of CENVAT and state VATs are imposed on only goods, Service tax of centre is levied on services which account for a half of GDP. It could be pointed that the main issue of tax reform should be to build a comprehensive dual VAT system on goods and services without border controls and on the destination principle.
(3)Indonesia, the centralized state, began the Big Bang type of decentralization processes in 2001. Some reports of IMF and World Bank that have supported Indonesian government have analyzed its situation and presented some issues. Main issues are (a)the function allotment among different levels of government, (b)the administrative ability of local governments, (c)the intergovernmental fiscal transfer system, (d)the accountability of local governments. And an important area of local tax reforms is property taxes, particularly Land and Building Tax of 1986. As a result of the presidential election in 2004, S.B.Yudhoyono was inaugurated as president. The recent economic situation has been good, but we could not find any progress in fiscal and tax reforms as well as decentralization processes. Less
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