Financial Inclusion and Tax Revenue: Evidence From Europe

Al-Own, Bassam; Bani-Khalid, Tareq

doi:10.5430/ijfr.v12n2p27

Cited by 7 publications

(8 citation statements)

References 37 publications

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“…These results corroborate findings of Maherali (2017), Oz-Yalaman (2019), Compaoré, (2022), Al-Own and Bani-Khalid (2021), and Raouf (2022 who examine the beneficial effect of financial inclusion in enhancing tax revenue mobilization in different contexts. For instance, Al-Own and Bani-Khalid (2021) analyzed the relationship between financial inclusion and tax revenue in 28 European countries between 2011 and 2017, using Global Findex measures. Their findings indicated a positive and significant impact of financial inclusion on tax revenues.…”

Section: Baseline Resultssupporting

confidence: 89%

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Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries

Chebochok,

Bayale

2023

African Development Review

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Financial inclusion remains at the heart of governments concerns. By creating favorable conditions for access to a diversified range of adapted financial products and services at affordable costs for the populations, financial inclusion generates important opportunities that could lead to increased tax revenue mobilization. This paper analyzes the effects of financial inclusion on tax revenue mobilization, using panel data from West African Economic and Monetary Union (WAEMU) countries over the period 2006–2019. The findings suggest that financial inclusion positively and significantly influences government's tax revenue. Moreover, by looking at the effects of disaggregated financial inclusion dimensions (access, use, and affordability) on various components of tax revenue, we find that the estimated coefficients on the subcomponents of financial inclusion are statistically significant. Results also indicate that the magnitude of effect of financial inclusion is higher on indirect taxes compared to direct tax revenues. This research recommends that policy‐makers should prioritize financial inclusion in their policies and development agenda through National Financial Inclusion Strategies (NFIS) because it can increase countries' resource mobilization and help them to build fiscal resilience.

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Section: Baseline Resultssupporting

confidence: 89%

“…However, little attention has been paid to the question of the effects of financial inclusion on tax revenue mobilization. On this emerging issue, literature indicates a positive and significant relationship between financial inclusion and tax revenue (Al‐Own & Bani‐Khalid, 2021; Maherali, 2017; Oz‐Yalaman, 2019).…”

Section: Introductionmentioning

confidence: 99%

Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries

Chebochok,

Bayale

2023

African Development Review

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“…Financial inclusion is increasingly important as a measure used by policymakers, in the majority of countries, to improve economic growth and sustainability development (Sharma 2016;Shihadeh et al 2018;Oz-Yalaman 2019;Ozili 2020;Al-Own and Bani-Khalid 2021). Financial inclusion is a top priority for policymakers for a variety of reasons, the first being that it is a key tool for achieving the United Nations' Sustainable Development Goals (SDGs) (Sahay et al 2015;Demirgüç-Kunt and Singer 2017).…”

Section: Introductionmentioning

confidence: 99%

Financial Inclusion Indicators Affect Profitability of Jordanian Commercial Banks: Panel Data Analysis

2022

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Previous literature supports the view that the financial inclusion leads to economic growth and helps alleviate poverty; however, it is still unclear whether financial inclusion increases bank profitability. The study assumes that financial inclusion is significant in enhancing the economy and minimizing loan accounts, and along with this assumption, the deposit size decreases the Jordanian banks’ profitability despite the fact that the financial services and access to them have no significant influence upon such profitability. The major profitability drivers examined in this study comprised financial inclusion and financial leverage. In this study, 13 Jordanian banks’ data from 2009 to 2019 were examined to determine the above issue. The study applied fixed effects on a panel data regression model. The findings indicated that the number of loan accounts and size of deposits negatively and significantly impacted the profitability of the commercial banks in Jordan. However, the number of branches and ATMs had no significant effect on the bank’s profitability. In sum, both leverage and bank size were the top two determinants of commercial banks’ profitability in Jordan. Based on the findings, Jordanian policymakers can shift their focus to offering affordable financial services that support SMEs’ loans and start-ups.

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“…Based on 2017 304 e-ISSN: Financial Inclusion Index Database data, there is an increase in the number of adults in the world who already have accounts at financial institutions by 69%, whereas in the 2011 Financial Inclusion Index Database data, it is still at 51% (Oleschak, 2021). The amount of financial inclusion in the formal financial system increases opportunities and facilitates investment so that increased business leads to more tax revenues and supports economic growth (Al-Own & Bani-Khalid, 2021). Therefore, financial inclusion can be an opportunity for a country to take advantage of financial progress as one of the potentials in increasing state revenues from taxes.…”

Section: Introductionmentioning

confidence: 99%

“…There are very scant studies in an effort to explore the effect of financial inclusion on tax revenue (Oz-Yalaman, 2019), (Al-Own & Bani-Khalid, 2021), (Raouf, 2022), (Compaoré, 2022). Utilizing data from the Global Financial Index Database, Oz-Yalaman (2019) found a positive and significant effect on tax revenue.…”

Section: Introductionmentioning

confidence: 99%

Islamic Banking Financial Inclusion and Tax Revenue in OIC Countries: To What Extent do They Correlate?

Nur

Febriyanti

Rusgianto

et al. 2022

Shirkah

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Tax revenue of Organization of Islamic Cooperation (henceforth OIC) countries has not reached the global average, and so has the financial inclusion. Notwithstanding this fact, few researchers have addressed the effect of financial inclusion on tax revenue in the context of Islamic finance while it is undeniably having significant connection to the real sector. Drawing on this crucial issue, the present study calls into the possible effect of Islamic banking financial inclusion on tax revenue in eleven countries of OIC membership consisting of Indonesia, Jordan, Kazakhstan, Kuwait, Malaysia, Nigeria, Oman, Pakistan, Saudi Arabia, Turkey, and the United Arab Emirates in the period of 2013 to 2019. The data were analyzed under the procedure of panel data regression using fixed effect model. The result depicted that Islamic banking financial inclusion, in terms of financial access and financial usage, had no significant effect on tax revenue of the OIC countries. This result is reasonable, since Islamic banking financial inclusion still requires massive promotion particularly by the OIC countries included in this study. Hence, this study leaves an implication for OIC countries to foster Islamic banking financial inclusion as a crucial effort to increase the tax revenue, in which Islamic banks play a promising role for sharia-compliance-based financial transactions in the recent years.

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Financial Inclusion and Tax Revenue: Evidence From Europe

Cited by 7 publications

References 37 publications

Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries

Effects of financial inclusion on tax revenue mobilization: Evidence from WAEMU countries

Financial Inclusion Indicators Affect Profitability of Jordanian Commercial Banks: Panel Data Analysis

Islamic Banking Financial Inclusion and Tax Revenue in OIC Countries: To What Extent do They Correlate?

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