Impact of Taxation on Economic Growth in an Emerging Country

Al-Tarawneh, Alaaeddin; Khataybeh, Mohammd; Alkhawaldeh, Sami

doi:10.11648/j.ijber.20200902.13

Cited by 11 publications

(11 citation statements)

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“…The upper part of table 6 shows the short run results. The findings indicate a short-term, significant negative correlation between tax revenue and economic growth (Al-tarawneh et al, 2020). Short-term results show that both government spending and gross fixed capital formation have a significant and positive effect on economic growth.…”

Section: Results Of Ardl Modelmentioning

confidence: 84%

“…The lower part of table 6 shows the ARDL long run results. The results shows that tax revenue has a negative and significant impact on economic growth in long run (Al-tarawneh et al, 2020). Which means one percent increase in tax revenue decrease economic growth by 0.32 percent.…”

Section: Results Of Ardl Modelmentioning

confidence: 92%

“…The inverse relationship between the taxes and economic growth rate is due to a) high tax rate discourages work efforts and reduces the tax revenue, b) mobilizes the citizens from high tax rate countries to lower-tax countries c) marginal tax rates also distort price signals. As a result, foreign investors cannot relocate to a country with a high tax rate because they will not be able to maximize their profits (Al-tarawneh, Khataybeh, & Alkhawaldeh, 2020;Mdanat et al, 2018). In order to take advantage of the low tax rates and strong investment opportunities, local investors will begin to invest abroad.…”

Section: Literature Reviewmentioning

confidence: 99%

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Impact of Taxation on Economic Growth: Empirical Evidence from Pakistan

Shafiq

Bhatti²,

Bashir³

et al. 2022

JBSEE

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Purpose: Governments rely on taxes, but a high tax rate can slow economic growth. Fiscal policy objectives can be achieved most effectively by lowering tax collection costs and boosting economic growth through efficient taxation. This study aims to find the impact of tax revenue on Pakistan's economic growth. Design/Methodology/Approach: The time series dataset spanning 1985–2021 is used for the current analysis. GDP is used as the dependent variable, while tax revenue and other fiscal policy variables like government spending, inflation, gross fixed capital formation and current account balance are used as the explanatory variables. The stationarity of the data is checked using the ADF test. The results of the ARDL bound test, which is used to determine whether there is a long-term link between the variables and a short-term relationship, indicate a long-term relationship. Findings: Current analysis reveals that tax revenue and inflation have a negative and significant impact while government expenditures and gross fixed capital formation have a positive and significant impact on the economic growth of Pakistan. Implications/Originality/Value: According to the study's results, Pakistan's government should ensure that tax rates are set at the right level to bring in enough money to pay for government spending that helps the economy grow.

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Section: Results Of Ardl Modelmentioning

confidence: 84%

Section: Results Of Ardl Modelmentioning

confidence: 92%

Section: Literature Reviewmentioning

confidence: 99%

See 1 more Smart Citation

Impact of Taxation on Economic Growth: Empirical Evidence from Pakistan

Shafiq

Bhatti²,

Bashir³

et al. 2022

JBSEE

View full text Add to dashboard Cite

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“…Due to a one per cent increase in indirect taxes, economic growth would decrease by 1.68 per cent. Al-tarawneh et al (2020) determined that there is a negative short-and long-run relationship between taxes and economic growth in Jordan. Other studies emphasize that tax revenues are important for economic growth.…”

Section: Source: Compiled By the Authorsmentioning

confidence: 99%

An Investigation of the Influence of Economic Growth on Taxes in Lithuania

Ulvidienė

Meškauskaitė²,

Stavytskyy³

et al. 2023

ECO

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The level of economic interstate competition has been growing significantly in recent decades. Countries are constantly trying to apply lower tax rates to attract large businesses to their territory. They are also trying to improve the efficiency of tax collection on their area of jurisdiction. The paper examines how economic growth affects Lithuania’s tax collections. Based on quarterly data of the 2002–2022 period, ARDL models for the main types of taxes were considered. We find that for all types of taxes, the models have the same structure, which allows comparing the impact of gross domestic product on tax collections both in the short term and in the long term. Analysis showed that the largest reserves are in the corporate sector, where the growth in tax revenues exceeds gross domestic product growth by 115%. The long-term effect for general taxes is almost 19% higher than the growth of the tax base, that is, the Lithuanian economy as a whole has a tendency for a reduction of the shadow economy, which means that there are significant opportunities for further growth.

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“…Desislava (2018) posited that people's living standards largely depend on many European Union countries, and these factors differ from one country to another. Economic development policies in each country trail the line of each country's policy objectives and the desire to raise enough revenue to execute social goods and improve citizens' living standards (Al-tarawneh, Khataybeh & Alkhawaldeh, 2020;Baiardi, Profeta, Puglisi & Scabrosetti, 2019).…”

Section: The Study Backgroundmentioning

confidence: 99%

Tax Structure and Economic Development: An Infrastructural Viewpoint

Uhuaba

Siyanbola

2020

IPJAF

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Underdevelopment in Nigeria was attributed to the governments’ inability to invest in infrastructure, social inclusion, creation of jobs and youth empowerment, and improved the economy’s human capacity base. Therefore, this study examines Nigeria’s tax structure and economic development from the standpoint of infrastructural deficiencies. This study’s population consisted of 4,200 tax practitioners, senior management staff of the Federal Inland Revenue Service in Lagos State. Simultaneously, Taro Yamane’s formula was used to determine the sample size of 365. Cronbach Alpha reliability coefficients take values between 0.864 and 0.952, thus confirming the reliability of data used. The study employed a survey research design using a structured questionnaire administered to senior tax practitioners and senior staff of the Federal Inland Revenue Service. A total of 85% of the questionnaire administered were retrieved while descriptive and inferential statistics were used for the data analysis. The study found that the tax structure had a significant positive effect on infrastructure in Nigeria. The study recommended that investors critically and objectively study and understand the tax base dynamics and tax rates as they affect their taxable income from their investments.

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Impact of Taxation on Economic Growth in an Emerging Country

Cited by 11 publications

References 0 publications

Impact of Taxation on Economic Growth: Empirical Evidence from Pakistan

Impact of Taxation on Economic Growth: Empirical Evidence from Pakistan

An Investigation of the Influence of Economic Growth on Taxes in Lithuania

Tax Structure and Economic Development: An Infrastructural Viewpoint

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