Some Comparisons Between Turkey and OECD Countries: Productivity, Education and Taxation, 1960-2000 (original) (raw)

TAX COMPETITION AND TAX BURDEN IN TURKEY

Tax Competition and Tax Burden in Turkey, 2021

Tax competition is a phenomenon that emerged because of the increasing mobilitiy of production factors, especially capital, between countries due to the globalization process. The concept of tax burden; It is meaningful in terms of showing the share of the public economy in the national economy as well as being one of the development indicators of a country. Because infrastructure investments, which require large capital, especially in developing countries, the lack of private savings at the desired level, and the quality and accessibility of public services in parallel with this are the arguments that reveal the importance of the concept of tax burden. It is tried to be revealed with statistical data in the light of concepts such as equality and justice, factors such as the tax structure of that society, income distribution, and which segments of the society bear the tax burden in a country. Sociological approaches such as poverty and deprivation and social exclusion have been concepts that affect the economic policies of modern states in the context of the social rights and freedoms of today's individuals in the grip of globalization. Throughout this study, we will discuss the harmful and beneficial aspects of tax competition, the importance of tax competition, and the reasons for the tax burden caused by the effects of tax competition on Turkey among OECD countries.

Tax Optimality in Turkey: An Analysis for Total Tax Revenues

International journal of economics and financial research, 2022

Within the scope of optimal tax theory, the optimality problem of fiscal policies in the Turkish tax system for the period 1980-2019 will be discussed from the perspective of the Laffer curve. The study, it is aimed to obtain the real Laffer curve showing the relationship between total tax revenues and tax rate for Turkey. Macroeconomic variables such as tax rates, tax revenues, crisis periods, unemployment rates, and real wages are included in the analysis with the help of an econometric package program. Within the scope of time series, the effect of the tax rate on tax revenues was investigated using Johansen and ARDL cointegration approaches. According to the findings obtained from the analyses, the total tax rates in Turkey are on the right of the Laffer curve, in other words, the Laffer curve exceeds the optimal point. Based on the hypothetical existence of Laffer theorem"s in Turkey, the optimal tax rates were calculated for the total tax revenues, and the current tax rates of each year were compared with the optimal tax rates. It has been determined that the total tax rates in the specified period are in the forbidden region of the Laffer curve. This situation, which states that the tax burden has increased, reveals that the taxation process should be revised. There is no comprehensive empirical analysis of Turkey. The findings will guide the applications that will contribute to the field. The originality of the work; is based on the inclusion of time series analysis of macroeconomic data such as crisis periods, unemployment rates, real wages as independent variables in determining the relationship between tax revenues and tax rates. The validity of the Laffer curve for each tax (Income Tax, Corporation Tax, VAT) in the Turkish tax system can be examined with the data and methods used in the research.

Redistribution Effects of Taxes on Expenditure: The Case of Turkey (2002-2013

Review of Public Economics, 2019

Tax and transfer policies have been main research areas in reducing income inequality, which gained great importance particularly in the last century. Economists, who focused on this area, argue that un­ like income tax, a well-designed expenditure tax might be more efficient in reducing income inequal­ ity because it is easier to manage, does not levy a tax on capital income, and does not discriminate between current and future consumption. In this study, redistributive effects of taxes on expenditures are investigated based on the household budget survey micro data of TURKSTAT, which represents a great share of the indirect taxes. It is found that the impact of taxes on goods and services on inequal­ ity is not significant by the analyses that are based on sequential revenue tranches of indices and total consumption distribution in terms of gross and net consumption shares, the Gini coefficients, decile ratios and Kakwani index. Very close to zero and negative in the relevant period, Kakwani index im­ plies that expenditure taxes in Turkey can be considered regressive and increase the inequality. By comparing total consumption expenditures, amount paid on expenditure taxes, and household dispos­ able incomes; it is indicated that households at the bottom of the distribution are on average net spend­ ers, and consumption taxes increase the gap between the poor and the rich.

THE EFFECT OF TAXES ON INCOME DISTRIBUTION: AN ANALYSIS FOR TURKEY AND OTHER SELECTED OECD COUNTRIES

Proceedings of the Third EBOR Conference 2020, 2020

Equal distribution of income is important for social peace and economic stabilization. However, income is not distributed equally in any country and the governments try to provide the fairest distribution of income by intervening with various instruments. As an economic instrument, taxation is one of the most direct way to keep inequality in check and reduce poverty in the short term. This study aims to investigate the effect of taxes on income distribution. In this context, to what extent the change in the share of total tax revenues in the Gross Domestic Product affects the gini coefficient in Turkey and other selected OECD Countries between 2002 and 2019 is analyzed by using Panel ARDL (Auto Regressive Distributed Lag) model. As a result of the analysis, it is concluded that an increase in the share of tax revenues in GDP decreases the Gini index by 0.17.

Tax Elasticity and Progressivity for Turkish Tax System

The impact of taxation on economic efficiency, income disparity and social welfare has been extensively studied both theoretically and empirically. This study intends to provide a comprehensive analysis of taxation in Turkey in two ways. First, a comprehensive analysis of some important aspects of the Turkish taxation is discussed by challenging some common arguments claimed in the previous studies. For example, Turkey's indirect tax revenue is 50 percent of total tax revenue, which is remarkably greater than the OECD average of 32 percent-see to OECD (2017). Has this always been the case, or is it a recent phenomenon observed as a result of the extensive liberalisation since 1980 as claimed by Köse and Yeldan (1998), Demir (2004), Arıkboğa (2011) and Arıkboğa (2015)? Second, this study explores issues which are worth clarifying regarding the Turkish tax system, in particular in the light of the graduation of Turkey to an upper-middle income country-see WorldBank (2017a). These questions are: how has the tax burden evolved over time compared to similar European economies? How has progressivity of Turkish tax system changed over time? How did sales tax cuts implemented during the 2009 crisis affect the consumer welfare? Departing from other studies which analysed the Turkish tax system, such as Mucuk and Alptekin (2008), Açikgöz (2008) and Durkaya and Ceylan (2006), this study uses the longest available dataset on tax revenue, which starts with 1924 and ends with 2016. Furthermore, while the aforesaid studies built their analyses on indirect and direct tax classification, this study disaggregates the tax revenue data into four groups: income tax, wealth tax, sales tax and import tax. These studies focused on tax revenue composition and its impacts on economic growth by applying dynamic time-series models like VAR models or Granger causality tests. Although they used the time-series data and derived tax elasticity figures, the studies above did not expand their analyses to cover tax progressivity. By contrast, this study takes a step to expand tax elasticity discussions by including tax progressivity, as presented in section 1.4. According to our knowledge, this is the first time that the 2 tax progressivity is analysed with time-series data, so enabling us to observe the evolution of tax progressivity for the Turkish tax system. The analysis in this study starts with an investigation of the historical tax revenue data to reveal the evolution of the tax burden compared to some developed economies in OECD. The analysis is followed by the investigation of indirect taxes with historical data starting from 1924 and ending with 2016. The change in decomposition of the indirect tax revenue is tested by applying Lorenz dominance. The following two subsections assess the Turkish tax system by deriving long and shortrun tax elasticity figures in respect to income, as well as tax progressivity indices based on the study by Kakinaka and Pereira (2006). In the first place, time-series characteristics of the data is checked and the presence of a long-run relationship between different tax revenue types and the GDP is tested (see Appendix for cointegration test results). After confirming the presence of a long-run relationship, short and long-run tax elasticity figures with respect to income are derived. Following this, it is shown that the Turkish tax system has become less progressive over time. In the last section, the effects of tax cuts imposed in 2009 are discussed with regard to consumer welfare. 1.2. STYLISED FACTS ON TAXATION IN TURKEY This section provides a chronological analysis of some important figures related to taxation in Turkey. The first subsection looks at the evolution of the tax burden for the Turkish economy and compares it with developed European economies. The second subsection carefully analyses chronological changes in the proportion of direct and indirect taxes on the total tax revenue. The third part (subsections 1.2.3 and 1.2.4.) conducts a more technical analysis to obtain tax elasticity and tax progressivity measures. 1.2.1. Evolution of Total Tax Revenue in GDP The first stylised fact of taxation in Turkey regards its share in the GDP: it has been steadily increasing, i.e. the tax burden in Turkey becomes more similar to developed economies. For comparison, three Mediterranean economies, Spain, France, and Italy are selected due to having close

The relationship between tax burden and economic growth: Turkey case

Pressacademia, 2020

Purpose-In the theoretical framework, the relationship between tax revenues and economic growth, which is the multiplier mechanism, shows that an increase in tax revenues has a negative impact on economic growth. In this study, the relationship between tax burden and economic growth is examined by VAR analysis and Granger causality test. Methodology-In this study, VAR analysis and Granger Causality test analysis methods are used. In the study, the analysis is done for Turkey. Annual data are used in the study. The analysis covers the years from 1970 to 2018. In the study, firstly VAR analysis is done and then Granger Causality test is performed. Findings-The findings obtained in the analysis are as follows. In the VAR analysis the tax burden has a negative effect on the 3rd period growth. As a result of the Granger Causality test, it is concluded that tax burden and economic growth are mutual causes of each other. Conclusion-According to the results obtained, the tax burden affects economic growth negatively. Accordingly, increasing tax rates will not have positive feedback in terms of economic growth, and vice versa, its will have negative effects on economic growth. It would be more positive result, if policy makers reduce their tax rates in practice rather than increasing.

The Impact of Direct and Indirect Taxes on the Growth of the Turkish Economy

Public Sector Economics

Governments are able to implement monetary and fiscal policies to achieve economic objectives, such as increasing production, ensuring price stability, improving the balance of payments, and achieving full employment. While central banks carry out monetary policies, governments, in contrast, develop fiscal policies. Fiscal policy instruments can include public expenditures, taxes, and borrowing. In countries that have low savings levels, individuals participate in public expenditures by spending a large part of their income. Therefore, taxes are effectively used as a major policy instrument. The impact of both direct and indirect taxes on economic growth in Turkey has been analyzed by employing the autoregressive distributed lag (ARDL) approach. Test results suggest a positive and significant impact of indirect taxes on economic growth as well as a negative and significant impact of direct taxes.

The Analysis of Tax Performance in Turkey

Istanbul University Publication, 2019

Tax policies of Turkey have been one of the most concerning economic issues during the course of the European Union accession process. The tax revenues have been an important economic factor affecting tax policies and economic growth in Turkey. Tax performance has been an economic indicator which shows the effects of tax collection on economic development and income redistribution. Tax performance as an important economic indicator for the effects of tax policy shows how to make tax implementation in regard to the effiency and equity principles of taxation in any country. In this study, it will be scrutinized Turkish tax performance compared to EU-15 countries. The aim of this study is to analyze Turkey’s tax policy . The tax convergence of Turkey with EU -15 countries will be examined by exploring the stationary tax differentials series using the data sets from Eurostat and Turkish Revenue Administration. In this study , tax revenues-to-GDP ratios are used for tax convergence showing the tax performance in Turkey. and a unit root in the nonlinear framework will be tested to examine the Turkish tax performance compared to EU-15 countries

Personal income tax elasticity in Turkey 1975-2005

Dokuz Eylul University Department of Economics …, 2006

The estimation of tax elasticity; the response of tax revenues to changes in income, is important for at least three reasons: i) formulating government budgets and monitoring tax collections (Sen, 2002), ii) the specification of tax functions, iii) the automatic stabilizing properties of the tax system and the public sector deficit .

An Evaluation of Indirect Taxes in Turkey

2010

The share of indirect taxes in tax revenues, specifically consumption taxes, is quite high in Turkey when compared to other OECD economies. This emphasis on indirect taxes in Turkey, as well as other developing economies, is argued to emerge from the inability of the government to collect direct taxes because of the existence of a large informal sector that is not easily taxable. It has been suggested that the recent increase in the indirect taxes puts the burden on mostly the poor, raising concerns of inequality. This paper evaluates the efficiency of the current indirect taxes in Turkey by taking into account distributional concerns. Using data from the 2003 Household Budget Survey, we estimate elasticities of different consumption goods and services using AIDS method. We then perform a marginal tax reform analysis to assess the efficiency of indirect taxes. Our findings indicate that there is room for improvement and the current tax rates are not optimal.