The impact of tax forms on economic growth: Evidence from Serbia (original) (raw)
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The aim of the paper is to show the relevance of nexus between tax forms and economic growth and how they affect on gross domestic product in Serbia for the period 2006-2015. The impact is manifested through the analysis of three main tax forms: personal income tax (PIT), corporate income tax (CIT) and value-added tax (VAT) and their effect on the macroeconomic indicator as gross domestic product (GDP). The analysis is for a period of ten years in Serbia, where the regression model is constructed so that the GDP is defined as the dependent variable, while the tax forms are set as independent variables. To ensure correctly specified regression model, authors used the next test: VIF test, BP and BPG test, as well as Ramsey reset test. Results show a high degree of positive correlation between the observed variables and the positive impact of the personal income tax, corporate income tax and value-added tax on the gross domestic product, but it is only the impact of value added tax statistically significant. Apstrakt: Cilj rada je prikazati značajnost odnosa između poreskih oblika i ekonomskog rasta i kako oni utiču na bruto domaći proizvod u Srbiji za vremenski period 2006-2015. godine. Uticaj je manifestovan kroz analizu tri glavna poreska oblika: porez na dohodak građana (PIT), porez na dobit kompanija (CIT) i porez na dodatu vrednost (VAT) i njihov efekat na makroekonomski indikator: bruto domaći proizvod (GDP). Analiza je za period od deset godina u Srbiji, gde je regresioni model konstruisan tako da je BDP definisana kao zavisna varijabla, dok su poreski oblici određeni kao nezavisne varijable. Da bi se obezbedio korektan regresioni model, autori su koristili sledeće testove: VIF test, BP i BPG test, kao i Ramsey reset test. Rezultati pokazuju visok stepen pozitivne korelacije između posmatranih varijabli i pozitivni uticaj poreza na dohodak građana, poreza na dobit kompanija i poreza na dodatu vrednost na bruto domaći proizvod, ali je samo uticaj poreza na dodatu vrednost statistički značajan.
The relationship between taxes and economic growth: Evidence from Serbia and Croatia
The European Journal of Applied Economics, 2018
This study presents an empirical analysis of taxes and economic growth in Serbia and Croatia in the period 2007-2016. In order to identify the impact of tax forms on economic growth and their relationship, the authors decided to set up a panel regression where gross domestic product is the dependent variable, while corporate income tax, value added tax, social security contributions and excises are independent variables. The results of random effect model have shown that corporate income tax, value added tax and social security contributions have a positive impact on the gross domestic product, while excises affect the gross domestic product negatively. However, only value added tax has a statistically significant impact on economic growth in these countries, with each increase in revenue from this tax contributing to the growth of gross domestic product in the observed period.
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The existing theoretical literature advocates that tax policy plays a vital role on the economic development, principally policy that include a reduction in the rate of taxation is a dominant incentive of economic growth. In this regard, almost all Western Balkan countries cut the income tax and move to a flat tax rate in order to stimulate the employment and investment which in turn will spur the economic growth. Thus, the purpose of this research paper is to empirically examine how changes of income tax affect the economic growth of Western Balkan countries. For analysing this issue, panel econometric models are employed using yearly data for the time period 2005-2016. The estimation results reveal that the personal income tax has positive and significant impact on growth. While corporate tax has negative impact on growth in almost all models, but the coefficient is statistically insignificant. This implies that the current corporate tax rates couldn’t endow with sustainable econo...
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Anali Ekonomskog fakulteta u Subotici, 2020
This research examines the relationship between indirect taxes and gross domestic product per capita in the Republic of Serbia from 2005 to 2019. The aim of this paper is to evaluate the long-run relationship between value added tax, excises and gross domestic product per capita based on Johansen cointegration test. The empirical analysis includes descriptive statistics, unit root test, cointegration test and FMOLS model. The results reveal a long-run relationship between indirect taxes such as value added tax and excises and the gross domestic product per capita in the Republic of Serbia for the observed period. Empirical findings confirm that revenues of value added tax and excises have positive and significant effect on the gross domestic product per capita in the long-run.
European Journal of Economics, Law and Social Sciences, 2017
Main purpose of political makers is the economic growth of a country. Tax policy is oft en mentioned in research as an important determinant of economic growth. This study is of great importance in the formulation of these policies which would affect the efficiency of collection of taxes in order to cover public expenditures, which would have an impact in the growth of the country's economy. To assess this effect, we have done a descriptive statistical analysis of the structure and trends in tax collection in Kosovo from 2005 to 2015. In this research we have considered how tax policies impact on economic growth by using data from years. The results from this analysis confirm that the structure and trends of taxes in Kosovo have contributed to the growth of public investment growth, contributing directly to GDP growth. Also based on the findings we have noticed that the share of tax revenues in the country's Gross Domestic Product was relatively low compared to other countri...
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Collection of Value Added Tax in Kosovo and Its Effect on Economic Growth
European Journal of Economics and Business Studies, 2017
The revenue collected from the value added tax constitutes the main income of the Kosovo government. For this reason, this research has a great importance in the formulation of effective policies in Kosovo that will subsequently improve the efficiency of tax collection of Value Added and growing fiscal and budgetary stability. This research it will have a descriptive analysis of the trends of VAT collection in Kosovo from 2005-2015 years using different analytical techniques to examine trends and data structure over the years. We have used two types of analysis; One is the descriptive analysis of trends and the other is the contrast of the descriptive analysis of trends that is the econometric technique used to analyze the VAT effect on economic growth in Kosovo. The source of data for this study is secondary through the Annual Financial Report of the Ministry of Finance of Kosovo and the IMF. In order to analyze the data generated for the study, the statistical tool utilized is OLS technique (multiple regression). One of the key findings in the collection of VAT has been its dependence on the border. Revenue collection is among the most pressing problems and such situation does not guarantee a country's budgetary stability. Also, based on the findings we noted that the VAT share of the gathering in gross domestic product of the Interior of the country has been low compared to other countries in Europe developing, reflecting a low level of economic development. Also from econometric analysis is confirmed that the regression coefficient shows that we have a VAT impact on GDP in Kosovo, because the level of significance is .000, or includes the rate of 1%. Also, the correlation between VAT and GDP shows a strong positive relationship, or statistically interpreted with the increase of VAT, will increase the GDP of Kosovo, these two elements conclude that VAT has a significant impact on economic growth in Kosovo. Furthermore, this research highlight some key issues that policy makers should consider dealing with the collection and effective use of revenue collected from VAT, to improve growth.
The Effect of Progressive Tax on Economic Growth Empirical Evidence from European OECD Countries
The paper investigates impact of Personal Income Tax, Corporate Income Tax, and Value Added Tax on economic growth in European countries applying progressive taxation. The method used is panel data regression analysis. The data for the independent variables (PIT, CIT, VAT) and dependent variable (GDP per capita) spans from 2002 to 2014. Twenty European OECD countries that apply the progressive tax, have been selected for study, amounting to 260 observations. Data on GDP per capita as a dependent variable are obtained from the World Bank database, while independent variables are extracted from the OECD database. Independent variable data are presented in percentage of Gross Domestic Product. After analyzing the data, we found that PIT has a negative impact on economic growth in the countries that apply the progressive tax. While CIT and VAT have a strong positive impact on economic growth in countries applying progressive taxation.