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Cost effectiveness of imposing reasonable tax implications as part of the tax warehousing procedure to enhance the resilience of the State and business units

Vol. 23, Iss. 1, JANUARY 2020

Received: 21 November 2019

Received in revised form: 17 December 2019

Accepted: 25 December 2019

Available online: 16 January 2020

Subject Heading: Tax and taxation

JEL Classification: H2, H25, M31

Pages: 30–44

https://doi.org/10.24891/ia.23.1.30

Sidorova E.Yu. Financial University under Government of Russian Federation, Moscow, Russian Federation
Ejsidorova@yandex.ru

https://orcid.org/0000-0002-4385-7173

Subject Research focuses on customs payments as part of sale–purchase deals with imported goods undergoing the customs warehousing procedure.
Objectives The study elaborates a technique to evaluate the cost effectiveness of imposing reasonable tax implications as part of the customs warehousing procedure in order to enhance the resilience of the State and business units.
Methods I rely upon a normative approach, general and special methods of research, such as a systems analysis, observation, tool-based techniques of grouping, sampling, comparison and generalization, to ensure the reasonableness, reliability and validity of methodological clauses determining the place of sale of goods as part of sale-purchase deals with imported goods undergoing the customs warehousing procedure.
Results The study presents my technique to evaluate the cost effectiveness of imposing reasonable tax implications as part of the customs warehousing procedure in order to enhance the sustainability of the State and business units. Based on examples, I refer to six cases. I showcase situations with excisable and non-excisable goods and fixed and ad valorem tax rates. This, in case of excisable goods, the strongest economic effect is recorded when customs duties on import are assessed at the fixed rate, while the ad valorem rate works for excise taxes. In case of non-excisable goods, the fixed rate is more beneficial. My suggestions will help improve fiscal functions of customs payments.
Conclusions and Relevance The proposed modifications of the customs warehousing procedure have a positive effect on the State and business units, making them more resilient, boosting fiscal revenue from additional tax implications from VAT, ensuring a simpler VAT control scheme and setting non-ambiguous tax implications for ordinary sale–purchase deals. This decreases tax rates for the State and business units.

Keywords: customs procedure, point of sale, customs warehouse, VAT, customs duties, cost effectiveness

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