Improvement of the Calculation Procedure of Tax
Burden with Digital Technologies
Shavkat Turaev
Economics in ICT Department
Tashkent University of Information Technologies named after Muhammad al-Khwarizmi
Tashkent, Uzbekistan
shavkatbek82@mail.ru
Abstract—This research paper studies the tax policy of
Uzbekistan, specifically the issue of tax burden, the essence of
tax burden indicator and different approaches of calculating it.
In this article, international experience of using digital
technologies to improve taxation system and the situation of
Uzbekistan in this matter are proposed. Analyzing different
sources in this theme, conclusion and suggestions are given.
Keywords— Tax system, tax calculation, tax indicator, tax
base, enterprise, revenue, legal entities, B2G, block chain, mobile
sector, electronic invoice, mobile tax, revenue
I.
I
NTRODUCTION
In scientific research carried out to determine and optimize
the tax burden in the economy in the context of globalization,
the main emphasis is on the optimization of the tax burden by
unifying the types and rates of taxes, abolishing ineffective tax
benefits, determining the indicator of the tax burden of legal
entities as the ratio of all the taxes paid by them to the state
budget of taxes and payments with value added tax,
calculating the indicator of the tax burden on enterprises as a
net and total tax burden for its optimization at the micro level.
At present, the conceptual tasks of reforming the tax system
of the Republic of Uzbekistan are not defined: "continuation
of the course to reduce the tax burden and simplify the taxation
system, improve tax administration" [1].
II.
T
AX
P
OLICY IN
U
ZBEKISTAN
One of the directions of the Concept for improving the tax
policy of the Republic of Uzbekistan is determined: reducing
the level of tax burden on the economy, as well as eliminating
disparities in the level of tax burden between economic
entities paying taxes according to the simplified and generally
established taxation system [2].
The development and reform of the tax system of the
Republic of Uzbekistan, aimed at reducing the number of
taxes and fees and optimizing tax bases and rates, makes the
issue of calculating the tax burden indicator, which determines
the effectiveness of state tax policy at the macroeconomic
level and tax planning of an enterprise at the micro level,
urgent.
If we consider the essence of the tax burden, which is an
effective indicator of the relationship between taxes and
subjects of taxation, in fact, it is primarily characterized by the
fact that a certain part of the financial resources of the
population and the private sector is alienated in favor of the
state. Therefore, the scientific discussion about the expression
of the tax burden using quantitative indicators has always been
relevant. Currently, research on optimization of the tax burden
by unifying the types and rates of taxes, on justifying the
elimination of ineffective tax benefits, on determining the
indicator of the tax burden on enterprises and regions of the
Republic of Uzbekistan is becoming relevant.
978-1-6654-3258-0/21/$31.00 ©2021 IEEE
The fiscal and regulatory functions of tax relations are
important for determining and optimizing the tax burden. The
fiscal component of the tax burden is manifested in the fact
that it serves to centralize financial resources of the private
sector in the interests of society, meanwhile, the function of
regulating public relations is the ability to indirectly influence
production processes through the tax mechanism. The tax
burden can be recognized as a factor that partially restricts the
freedom of taxpayers in the economic sphere, and as a kind of
“price” for services rendered by the state.
III. I
SSUE OF
T
AX
B
URDEN
The problem of studying the impact of the tax burden on
the national economy is inextricably linked with the search for
an economically justified ratio of taxes and fees levied by the
state to the gross domestic product. There are many different
methodological approaches to calculating the optimal amount
of the tax burden as a solution to this problem, and the
scientific results obtained are inherently contradictory. At the
same time, the variety of scientific approaches and analytical
methods opens up wide opportunities for scientific analysis of
the problem of the tax burden at the macroeconomic level.
As the results of scientific research show, an increase in
the tax burden on taxpayers (increase in tax rates, abolition of
tax incentives) will initially lead to an increase in tax revenues,
but after reaching a peak value, a downward trend begins to
appear. As a result, budget revenues begin to decline, and a
certain part of taxpayers will find themselves in a crisis
situation, when, like the rest, they will evade taxes in various
and not always legal ways, and as a result, they will go into
the shadow economy.
The impact of the tax burden and tax policy on the
macroeconomic situation is so great that the change in the
volume of gross domestic product created in the country is
directly related to the effectiveness of tax policy. The impact
of the tax burden on the macroeconomic situation can be
assessed by such criteria as the impact of taxes on aggregate
demand and aggregate supply, on the investment climate,
consumption, and economic stability.
IV. E
SSENSE OF
T
AX
B
URDEN
I
NDICATOR
A reasonable tax system that meets the needs of the state
for financial resources does not have a negative impact on the
production and business activities of taxpayers, but, on the
contrary, has a positive effect on the search for effective ways
of doing business. Consequently, the indicator of the tax
burden of the taxpayer will be sufficient to assess the quality
of the country's tax system.
The need to use the indicator of the tax burden in the
economy is manifested in the use of the calculation and
definition of this indicator in the development of the tax policy
| //$31.00 ©10.1109/ICISCT52966.2021.9670039
Authorized licensed use limited to: Tashkent University of Information Technologies. Downloaded on December 23,2022 at 13:01:10 UTC from IEEE Xplore. Restrictions apply.
of the state. The tax burden of the country is used to assess the
tax base and the impact of taxes on the economy (Fig. 1).
In Uzbekistan, in the complex socio-economic
development of regions in the context of the implementation
of a medium-term development strategy, special attention is
paid to the development and implementation of road maps
with the identification of growth points by establishing the
specialization of the territory and identifying driver spheres.
For the purpose of a comparative analysis of the tax burden, it
is advisable to establish the practice of calculating the tax
burden in the context of the levels of the economy, in
particular, calculating the amount of taxes and payments
levied in the regions in relation to the gross regional product.
Fig. 1. The need to calculate the indicator of tax burden
The indicators of the tax burden affect the social policy of
the state. The state, based on the results of this indicator,
develops its social policy. Plans spending on social protection,
education, medicine, science, investment, defense and
security. To achieve these goals, taxes are levied on taxpayers,
individuals and legal entities. At the same time, the essence of
the problem lies in determining the optimal level of the tax
amount, since the taxpayer wants to receive services from the
state in proportion to the taxes paid to the state. Based on this,
the state determines the tax burden and returns these funds to
taxpayers through spending on the provision of various
services.
In addition, the indicators of the tax burden are also used
to determine the optimal areas of economic activity of
economic entities. They determine the priority directions of
capital investments in production. The indicator of the tax
burden helps in solving such issues as the development and
reduction of production, regulation of the economy, solution
of industrial sectoral issues, creation of new jobs, rationing of
consumption and savings of business entities, investment
orientation.
V.
L
ITERATURE
R
EVIEW
The author's work [3] proposes a methodology for
assessing the tax burden of an enterprise, which allows, on the
basis of optimization criteria, to analyze the value of the
indicator of the tax burden of an enterprise, taking into account
the production and sectoral specifics of its activities.
The purpose of the methodology for optimizing taxation
of an enterprise is to regulate the tax system of an enterprise
so that during the implementation of tax planning, control and
regulation procedures, the value of the tax burden indicator is
within the "tax corridor". The author proposes the economic
concept of "tax corridor", which has lower and upper
boundaries. The lower limit is the minimum allowable value
of the tax burden indicator, at which the enterprise does not
fall into the group of enterprises with the maximum tax risks
and the enterprise's activity remains economically profitable.
The upper limit is the value of the indicator of the tax burden
at which the profitability of the enterprise is comparable to the
increase in the tax burden, i.e. the company maintains a stable
financial position and has sufficient resources for further
development.
The author's work [4] provides a model of the relationship
between the tax burden and the gross regional product
developed by her, taking into account the resource potential of
the territory with the determination of the marginal
productivity of its factors to maximize the volume of the gross
regional product by forming the permissible level of the tax
burden.
In the work of I.A. [5] proposed approaches to managing
the tax burden of organizations, which consist in the
development of assessing the tax burden by an indirect
method, differentiating the tax burden between industries,
using the resource-tax model to determine the optimal tax
burden and resource base of enterprises, taking into account
the provision of a certain level of profitability and growth rates
of the main capital at current tax rates. According to the
author, averaging the indicator of the tax burden by industry
without its permissible deviation leads to a distortion of the
decisions of the tax authorities at the stage of choosing a
taxpayer for an on-site tax audit. Since the tax burden of
organizations depends on the resource base, the formation
mechanism of which has its own specific features within each
industry, the introduction of the permissible deviation of the
tax burden by industry will allow the tax authorities to more
rationally determine the policy for planning field tax audits
within the control function of the tax authorities.
The authors of the article [6] T., investigating the problem
of tax evasion, present a correlation model for assessing the
tax burden for an enterprise with the following variables: the
ratio of total tax expenses to profit before tax; the ratio of taxes
paid to profit before tax. According to the authors, the ratio of
tax expenses to profit is a key indicator of the study of tax
evasion problems.
The authors of the article [7] propose to assess the tax
burden not of an individual economic entity, but of a group of
integrated business entities. In their opinion, a scientifically
grounded approach to the analysis of the tax burden, which
can identify the factors of its growth and predict its future
value, can help top management and business owners make
informed decisions to optimize the tax base instead of
impulsive efforts to minimize tax payments at the expense of
the most easily accessible ones, but not always in legal ways.
The need to
calculate the
indicator of tax
burden
To develop tax
policy
To develop
social policy
To establish
indicators of the
development of
economic entities
For a
comparative
analysis of the
tax burden
Authorized licensed use limited to: Tashkent University of Information Technologies. Downloaded on December 23,2022 at 13:01:10 UTC from IEEE Xplore. Restrictions apply.
VI.
U
SAGE OF
ICT
FOR
I
NCREASING THE
E
FFICIENCY OF
T
AXATION
S
YSTEM
According to the latest OECD interim report, dedicated to
the transition of the tax system to digital technologies, the
growing popularity of digital platforms facilitates integration
into the official the economy. Those transactions that were
previously conducted without registrations are now carried
out on these platforms, which makes it possible to better track
them for electronic audit and optimize income reporting.
Thus, multilateral Internet platforms are capable of stimulate
growth and increase profitability by providing new
opportunities for economic activity and intensification of the
transition to official economy. To improve tax discipline, this
information can be included in matching analysis data - for
example, for cross-checking transactions with VAT [8].
Fig. 2. Mobile sector tax contribution in the economy of
Uzbekistan. [8]
In this respect, the potential interest for tax administration
introduces technology block chain, as it is able to reduce tax
burden. Blockchain is a distributed technology accounting,
allowing you to store data or information without centralized
inspection div. By registering transactions without a
centralized inspection div, blockchain offers a number of
useful tax application bodies, for example - a reliable way
registration and authentication of taxpayers and documenting
transactions.
This technology can significantly expand tax
administration capabilities, increase the effectiveness of
measures to improve tax discipline, optimize services for
taxpayers and reduce labor to ensure compliance. Some
examples of successful experiences related to with additional
opportunities for tax administrations that open thanks to
dissemination and use of digital technologies are studied by
authors.
In Russia, the Federal Tax Service has implemented a
system allowing the monitoring of VAT compliance on a
nationwide basis mostly in real time, drastically reducing
opportunities for fraud. The approach is based on an
automatic cross-matching of all VAT paid against all VAT
claimed across all transacting parties. This led to an increase
in VAT collection by 8.5% in 2015 [8].
Over €500 million in risky VAT was identified over a
two-year period in the Slovak Republic following the
introduction of electronic invoice data matching processes
[8].
In Hungary, the introduction of electronic cash registers
saw an increase of VAT revenue by 15% in the targeted
sectors, exceeding the costs of introducing the new system
[8].
In Rwanda, in the two years since the introduction of
electronic cash registers in March 2013, VAT collected on
sales increased by 20%.
Fig. 3. The tax contribution of mobile sector of the market
revenue. [8]
Some of the above examples of successes can also be used
in Uzbekistan. In addition to positive impact on tax collection
procedures, this approach also meets the objectives of the
Action Strategy in five priority areas of development of
Uzbekistan for 2017–2021 95 One of the stated in the strategy
tasks is that it is necessary to reform government system
through improvements system of public services, improving
efficiency, quality and public and business access to
government services.
VII.
S
UGGESTIONS AND
CO
NCLUSION
The efficient organization of the tax system and the
strengthening of its stimulating role affect the activities of
enterprises. In this regard, the simplicity and accuracy of the
tax system will contribute to the timely and complete
fulfillment by taxpayers of their obligations. Despite the
existence of many studies in the field of determining the tax
burden on enterprises, in our opinion, there are some
methodological flaws that make it possible to simply and
quickly assess the tax burden of an enterprise.
To fill this gap, we propose: the tax burden of legal entities
should be calculated as the ratio of the sum of all taxes and
fees paid by them to the newly created value. When
calculating the tax burden for legal entities, it is advisable to
calculate the net and total tax burden. Here, the net tax burden
represents the burden of all taxes, budgetary and extra-
budgetary contributions paid by a legal entity, while the total
tax burden covers tax, budgetary and extra-budgetary
contributions of legal entities, as well as taxes and deductions
from employees' wages. In particular:
a) the net tax burden of legal entities:
Authorized licensed use limited to: Tashkent University of Information Technologies. Downloaded on December 23,2022 at 13:01:10 UTC from IEEE Xplore. Restrictions apply.
Ннб = Хтбс⁄Сс (1)
where: Нпб is the net tax burden of a legal entity;
Хтбс - all taxes paid by a legal entity, deductions to the
budget and off-budget funds;
Сс - newly created value or added value of a legal entity.
It is advisable to define the tax burden of legal entities as
the ratio of all taxes, fees and deductions paid to the state
budget to value added. The source of all taxes and fees paid
by a legal entity in our proposed methodology is value added.
Calculating the tax burden in relation to value added will
deduct costs. The tax burden calculated using this method
allows us to determine the actual level of the tax burden on the
shoulder of the enterprise.
R
EFERENCES
[1]
Decree of the President of the Republic of Uzbekistan dated February
7, 2017 No.UP-4947 "On the strategy of actions for the further
development of the Republic of Uzbekistan."
[2]
Decree of the President of the Republic of Uzbekistan dated June 29,
2018 No.UP-5468 "On the concept of improving the tax policy of the
Republic of Uzbekistan."
[3]
Goftman A.P. Methodology for assessing the tax burden of small
businesses within the "tax corridor": author. dis…. Cand. econom.
Sciences (08.00.10) / GOU VPO "Yaroslavl State University named
after P.G. Demidov ". - Yaroslavl. - 2008, 19 p.
[4]
Kakaulina M.O. The influence of the tax burden on the gross regional
product: author. dis…. Cand. econom. Sciences (08.00.10) / FBGOU
VO "Amaur State University. - Blagoveshchensk. - 2015, 22 p.
[5]
Grebeshkova I.A. Assessment of the tax burden of Russian
organizations as an instrument of the national tax system: author. dis….
Cand. econom. Sciences (08.00.10) / FBGOU VO "Financial
University under the Government of the Russian Federation". -
Moscow. - 2021, 26s.
[6]
Duan T., Ding R., Hou W., Ziyang J.Z. The burden of attention: CEO
publicity and tax avoidance. Journal of Business Research, January,
2018. Available at: https://ssrn.com/abstract=3103947 (accessed
11/19/2017).
[7]
Gorodilov M.A., Konyaeva T.V. Improving the methodology for
assessing the tax burden in a group of companies: Bulletin of Perm
University, 2018, volume 13, no. 2, pp. 282-302
[8]
GSMA, 2018: Reforming mobile sector taxation in Uzbekistan:
Unlocking economic and social benefits through tax reform in the
mobile
sector.
https://www.gsma.com/publicpolicy/resources/reforming-mobile-
sector-taxation-in-uzbekistan
Authorized licensed use limited to: Tashkent University of Information Technologies. Downloaded on December 23,2022 at 13:01:10 UTC from IEEE Xplore. Restrictions apply.
