A Suggested Framework for the Depreciation of Fixed Assets by the Accelerated Cost Recovery System method (ACRS) As an Alternative to the Straight-Line Method For the Sake of Income Tax Purposes in Palestine " An Analytical Study "

Authors

Jameel Hassan El-Najjar, AlQuds Open University, North Gaza branch faculty of Administrative and economic SciencesFollow

Abstract

Tax policy is one of the most important tools, factors, and determinants of investment size since tax policy plays a prominent role in encouraging investment, stimulating economic growth and achieving the overall goals of the economy. More specifically, tax incentives are one of the tools of tax policy that are used to direct investments within a country, especially the system of tax depreciation of fixed assets, which is permitted to be applied by taxpayers in the country. This study suggested an Accelerated Cost Recovery System ACRS), as an alternative to the straight-line method for income tax purposes in Palestine. The study adopted the deductive approach to determine the reality of the study problem, and the analytical approach (descriptive documentary) based on the method of documentary studies in order to collect information, facts, ideas and visions through the published literature on the subject of the study. The study concluded that the implementation of the Accelerated Cost Recovery System model (ACRS) by business enterprises in Palestine will motivate enterprises to increase capital investments in order to take advantage of the benefits of the tax savings, and that the implementation of the Accelerated Cost Recovery System model (ACRS) will lead to a decline in tax revenues in the short term, and an increase in tax revenues in the long run. The study recommended that the implementation of the Accelerated Cost Recovery System requires the issuance of a decision by the Palestinian Cabinet, with the support of the Finance Minister to amend the instructions issued in 2005 regarding the depreciation of the fixed assets, which included allowing the Accelerated Cost Recovery System model (ACRS) to be applied for income tax purposes in Palestine. Consequently, the implementation of the Accelerated Cost Recovery System will require the development of technologies, systems, and methods of work for the tax departments in Palestine. This requires an integrated tax system at the level of all income tax departments, in order to ensure the optimal application of the specified model.

Recommended Citation

El-Najjar, Jameel Hassan (2023) "A Suggested Framework for the Depreciation of Fixed Assets by the Accelerated Cost Recovery System method (ACRS) As an Alternative to the Straight-Line Method For the Sake of Income Tax Purposes in Palestine " An Analytical Study "," Journal of the Arab American University مجلة الجامعة العربية الامريكية للبحوث: Vol. 9: Iss. 1, Article 10.
Available at: https://digitalcommons.aaru.edu.jo/aaup/vol9/iss1/10