Saudi Cultural Missions Theses & Dissertations
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Item Restricted DUAL CORPORATE LEVY SYSTEM IN THE KINGDOM OF SAUDI ARABIA IN LIGHT OF THE OECD PILLAR TWO(University of Florida, 2024) Alshalan, Maha; Brauner, YarivThis research explores and evaluates the extent of the impact of tax globalization on the dual Legal System of levies in the Kingdom of Saudi Arabia (KSA) in light of the Organization for Economic Co-operation and Development (OECD) Pillar Two implementation. It adopted secondary data-based research, which is qualitative, and used literature reviews and OECD publications as the main research component. It first explores the legitimacy of imposing a top-up tax besides the Zakat on Zakat payers (Saudi entities), in light of the application of Pillar Two, through the sources of the SA legal tax system. Then, it identifies the tax concerns about the investment climate of Saudi Arabia (SA) regarding the disparity in treatment between Saudi and foreign investors in KSA resulting from the application of the current dual systems; Zakat collection and Income Tax, through the study of the most important tax principles; the prevention of discriminatory taxation, and tax neutrality. Moreover, it exposes issues associated, such as competition imbalance, resource distribution, loss of revenues, and the possibility of evasion. This research presents the success achieved by the KSA government in the Zakat collection system to date that is in line with tax globalization, which makes it a role model for other Islamic countries, but it also focuses on revealing the challenges facing the government of SA concerning expanding the base of its Zakat collection system and implementing Pillar Two, a landmark reform to set a Global Minimum Tax (GMT) which will ensure Multinational Enterprises (MNEs)including Zakat entities will be subject to a minimum 15% tax rate under the OECD/G20 Inclusive Framework on base erosion and profit shifting (BEPS) project. These challenges are present in the context of the relentless pursuit to develop SA's tax regime on pace with the developments of the times, including the development of the legislative environment through the continuation of KSA in developing and reforming its Zakat and tax systems according to Shari'a law, preserve investors' rights, and enhance the KSA's competitiveness globally. The paper then exposes the upcoming challenge facing KSA in light of the SA’s tax transformation era, Pillar Two implementation, reveals the international overlap with Zakat under GloBE rules and the related issues arising from it, and examines expected advantages and disadvantages in the context of Pillar Two implications in the SA tax system. The paper proposal provides a possible solution through which the KSA can develop the legal tax environment by unifying the SA tax regime. At the same time, the Zakat collection system remains in effect which is derived from other Islamic countries’ application of Zakat such as Malaysia and Indonesia, and as well as referred to in the SA Tax systems. It suggests that the corporate income tax should be expanded to cover resident businesses of SA regardless of nationality, a unified tax system, as this would result in several advantages, and treating Zakat as a deduction approach from tax due ensures maximum benefit from both systems. A unified tax system provides SA’s government with a flexible tool to face globalization and the upcoming challenges for implementing Pillar Two in agreement with international tax norms to mitigate issues resulting from the overlapping of the two systems. At the same time, it achieves SA’s goal of increasing revenues without further expansion of expanding the Zakat base which creates instability and complexity in the system and disputes that create investment concerns. The author believes that by unifying the Tax system SA would achieve the highest level of investment attraction, and at the same time, avoid the many issues that are presented and discussed in this paper. As a consequence of the unifying SA tax system, Zakat is treated as an internal procedure as a tax deduction which is found in gas and oil taxation in SA and the practices of some Islamic countries.48 0Item Restricted Housing, and Racial Equity(Saudi Digital Library, 2023-04-10) Almohaimeed, Ashwaq; Amini Behbahani, AmirhosseinIn this dissertation I assess the impact of various government policies on employment, wages, health, and housing. Studying the impact of government policy is important not only to conserve resources but also to ensure an equitable distribution of such resources. One major emphasis in this dissertation to accurately measure the impact of government policy. I attempt to achieve this in two ways. First, I used spatial econometric methods to reduce bias in standard econometric models. Second, I use better data by incorporating a larger set of control variables and covering longer periods of time. A standard assumption in mainstream cross-sectional and panel data models is the indepen dence of the sample’s observations across units of analysis. This assumption ensures that the resulting error terms are spatially independent. However, this assumption is often violated in the assessment of government policy where data is often collected at the census tract, zip code, county, or state level, and such spatial units are usually interdependent. In particular, neighboring spatial units are often similar in characteristics, which is a violation of the independence assumption, resulting in estimates that are biased and inconsistent (Anselin and Bera 1998). In addition to accounting for spatial autocorrelation, I also take advantage of geographic discontinuity in govern ment policy to reduce confounding in standard regression models. Moreover, I incorporate many relevant control variable in my models to reduce omitted variable bias. This dissertation is comprised of three essays. The first tackles a government policy which had reaching socioeconomic and demographic consequences, namely the role of Home Owners’ Loan Corporation (HOLC) in shaping the US housing market. HOLC’s residential redlining policy in the 1930s denied racial and religious minority groups access to mortgage financing and home improvement loans as well as access to credit for starting new businesses. This limited education 1 and employment opportunities for African Americans for generations to come. In this regard, I ask, Did historically redlined Zip Codes experience worse COVID-19 outcomes? To answer this question, in Chapter 2, I assess the impact of residential redlining on COVID-19 outcomes. Using georeferenced COVID-19 data and historical redlining maps of Baltimore, I find that COVID-19 cases are higher in redlined neighborhoods while vaccination rates are lower. I measure redlining using historical neighborhood grades produced by Home Owners’ Loan Corpo ration (HOLC) in the 1930s, which resulted in redlining. I also use the Home Mortgage Disclosure Act (HMDA) data to estimate a redlining index which predicts the difference in odds of loan ac ceptance by race after controlling for income, debt, and loan size. Using spatial autoregressive models, I find that historically redlined neighborhoods have significantly higher COVID-19 cases and significantly lower COVID-19 vaccination rates, even after controlling for a host of social vulnerability and residential mobility measures. My second essay investigates the effect of state tax polices on job creation, job loss, and wages. In this context, I used discontinuity in tax regimes to compare business activity and taxes in coun ties that share a state border. My research question is: do cross-border differentials in state taxes affect firms’ job creation, job destruction, and average monthly wages in state-border counties? And if so, does the effect vary by race and ethnicity? To answer this question, in Chapter 3, I asses the effect of cross-border state tax differentials in counties straddling various state borders on job creation, job destruction, and wages. I find that higher top marginal state corporate income tax rates (compared to the state’s neighbors) are associated with lower job creation, higher job destruction, and lower average monthly earnings for small- and medium-sized firms operating in counties along the state’s border. I also find that higher top marginal state personal income tax rates reduce job creation, increase job loss, and have no effect of average monthly wages. In addition, higher sales taxes are associated lower job gains. In my third chapter, I investigate the effect of affordable housing projects on current home prices in areas where there projects locate. This topic is related to both redlining and state tax policies in that the lack of jobs combined with low wages limit affordable housing options and per 2 petuate residential redlining. In this essay I ask, Does the presence of affordable housing projects affect the median area home price in DC? And if so, does the effect depend on area income level? To answer this question, in Chapter 4, I assess the effect of affordable housing on home values in DC at the census tract level. Given that there is significant spatial autocorrelation in median home prices, median income, the number of affordable housing units, and the percentage of non white residents per tract, I employ spatial econometrics methods. I run a spatial Durbin model which regresses the median home price on its own spatial lag, the number of affordable housing units, the median income, the percentage of nonwhite residents, and the spatial lag of the indepen dent variables. The results indicate that the total effect of a unit increase in affordable housing units on the log of median home prices is 0.035 with a p-value of 0.007. This indicates that affordable housing enhances home values in the neighborhood.11 0Item Restricted The Potential Presence of Tax Avoidance and Evasion in the Saudi Context and Appropriate Legislative Reactions(2022) Etirji, Sohaib; Panayi, Christiana HJISince Saudi Arabia unified, there was no tax system until 2017, when a new economic vision was introduced to diversify the revenue source rather than depending exclusively on oil. It seemed challenging to build a new financial regime in the modern world that mainly relies on tax as a primary income source. These new policies and approaches will guide the taxpayers' and States' behaviours in the years to come. Additional hard work and scholarly studies need to be done to pave the way for the State to interact appropriately with the tax and tax-related questions. One of the requirements for a successful tax implementation is for students and researchers to further study the internationally competitive tax systems that currently exist, in order to understand the tax logic better, with the hope that this understanding will result in the creation of suggestions to solve the problems and find global answers to the system's questions. By focusing on successful tax regimes, and the issues that have been addressed in these regimes, it is possible to analyse the intricacies of tax abuse with precision and to make recommendations related to the possibility of tax avoidance behaviours and plans in the Saudi context. Lastly, providing advice to the legislator to prevent the attitudes that drive tax base erosion and tax gaps in advance in light of the United Kingdom and United States tax systems, as they are considered two of the most effective and powerful economies worldwide.30 0Item Restricted The Common VAT Agreement of the states of the Gulf Cooperation Council (GCC) and the Kingdom of Saudi Arabia’s VAT Law(2023) Hemid, Abdulaziz; Olowofoyeku, AbimbolaThis thesis examines the Common VAT Agreement of the States of the Gulf Cooperation Council (GCC) and the implementation of its provisions in the Saudi VAT Law. It proceeds by examining the emergence and ongoing implementation of the GCC’s cross-border VAT collection and enforcement regime to assess its possibilities and limitations. The central argument is that the GCC’s VAT regime is unsustainable due to the absence of common and effective mechanisms of treaty interpretation, coordination, and enforcement at both the regional and domestic levels. The term sustainable is used in this discussion to mean able to endure and to stand the test of time.37 0