CONSTRUCTING EXOGENOUS OUTPUT ELASTICITY OF TAX REVENUE FOR THE ALBANIAN FISCAL SECTOR (original) (raw)

The impact of fiscal policies on Albanian economic growth: The case of value-added tax

Journal of Governance and Regulation

This paper aims to give an overview and examine the effects of value-added tax (VAT) income as one of the main elements of fiscal policies on Albanian economic growth GDP (Demi, Hysa, & Nanaj, 2018), for the period 1999–2019, considering also the implementation of VAT legislation rules. The quantitative analysis methods are used in this study based on the wide range of theoretical and practical cases obtained from the literature to figure out the existing link between VAT as the explanatory variable and GDP as the explained variable. Based on empirical testing hypotheses on the importance of econometric models, the statistical information was selected by public institutions in Albania and the data is in the form of time series, often self-correlated from period to period. This feature was considered to avoid the consequences caused by autocorrelation and following the detection, the corrective measures were taken, in order for the statistical inference to be as objective as possible...

Tax Revenue - the Determinant Factors- the Case of Albania

European Scientific Journal, 2014

The purpose of this paper is to analyze the factors that will increase or will reduce revenues from taxes collected by the government. The variables that we have took in consideration are GDP, inflation, income tax, unemployment and imports. We have used the statistical analysis to see if there is a connection between the variables that we have chosen as explanatory ones. Through the use of the logarithmic function we will see how flexible is the GDP of our country related to income from taxes and government spending. The data that we have analyzed are obtained from the Ministry of Finance, INSTAT, World Bank, etc..

Forecasting tax revenues in an emerging economy: The case of Albania

2018

Fiscal balance is one of the main concerns of fiscal policy. Although academic and political choices on budget deficit vary due to perspective differences, improving the quality of revenue and expenditure forecasting has become prominent. The seminal researches on this topic present that tax revenue forecasts suffer from high positive biases. As tax forecasts have chain implications on the expenditures side as well, this might lead to high unexpected deficits. According to the IMF 2016 country report on Albania, emerging market economies are suffering higher than advanced ones in tax revenue forecasting. The aim of this paper is to implement new forecasting models and to apply forecast combinations for Albania, where forecast errors are higher than average. The estimation results show that influence of internal and external factors on tax revenue forecasting create a significant improvement on tax revenue accuracy. The estimations and forecast combinations of this paper perform lowe...

Measuring the Impact of Changes in Tax Rates on Albanian Budget 2014-2017

2017

In terms of globalization and transferability of production factors, direct taxes constitute a tax field where countries develop competition between them to be more attractive to foreign investors. Harmonization of Albanian tax legislation with that of the European Union is ongoing. Considering the fact that when Albania gets the status of a candidate country for EU membership, indirect taxes go towards harmonization, Albania must remain competitive in the area of direct taxation to attract foreign investors to invest in the Albanian economy. During 2014-2016, the Albanian government made some significant tax changes that brought about changes in revenue to the Albanian state budget. But it was noticed that even though the purpose of these tax changes was to increase the revenues in the state budget, this was not achieved due to the failure of the hourly running of these revenue and non-functioning organs of tax control. Thus, in 2016, a campaign was launched to ensure the implement...

The Impact of Tax Control on Tax Revenues: An Aggregate Metric Analysis of the Case of Albania

International Journal of Applied Economics, Finance and Accounting

Tax administration constantly monitors taxpayers through tax control to meet the legal obligations of the tax field. The main purpose of this function is to advise taxpayers and maintain operational control through continuous monitoring. Motivated by the importance of tax control, this paper aims to provide an empirical contribution to the analysis of tax control’s effects on the level of tax revenues. The database obtained in the analysis is both quantitative and qualitative according to the evidence of direct operational controls performed on businesses. The variables analysed are total tax revenues from value added tax (VAT), profit tax, personal income tax (PIT), withholding tax, etc.; tax control variables and macroeconomic variables. The methodology used in this paper is based on linear models with many variables as well as statistical tests to find the potential levels and equilibrium, elasticity and structural estimation of tax revenues. The findings of this paper provide a ...

Measuring and estimating tax elasticity in the Republic of Serbia

Ekonomika

The paper analyzes tax elasticity in the Republic of Serbia in terms of tax revenues, personal income tax, corporate income tax, value added tax, social security contributions and excises for the period 2005-2019. Tax elasticity manifest sensitivity of tax forms to a change in the gross domestic product, where results have shown that indirect taxes have higher coefficients of elasticity compared to direct taxes. Results of empirical analysis have manifested that tax revenues are elastic to a change in gross domestic product, where 1% increase in GDP makes to a change of tax revenues for 1.31%. Also, tax elasticity is the highest at corporate income tax, while revenues from value added tax and excises are also elastic in the observed period. On the other hand, personal income tax and social security contributions are inelastic to a change in the gross domestic product in the Republic of Serbia.

Albanian Fiscal System Evaluation Through Some Economic Indicators

European Scientific Journal, ESJ, 2014

The Albanian government, elected during year 2013, has announced the new economic and fiscal program, as immediate measure for impacting economic growth and strengthening public finance. This program is based on fundamental reform of tax system, and tax administration, as a supplementary supporting package. The last system has been in force since 2008, which mostly was attributed the flat tax rate and some other fiscal facilities for different sectors of goods and services. The new regulatory fiscal reform which proposed and just approved, is based on progresive taxation rate for direct taxes (corporate and personal income taxation), maintaining the same Value Added Tax. Beyond any political assessment about which system is best for strengthening the public finance and economic growth improvement, this article aims to analyze which has been the impact of previous fiscal policy, that has been implemented on Albanian economy, and to make some assumptions whether if its "life" is over.

Taxation and Government Expenditures in the Center of the Albanian Policy Debate

European Journal of Economics and Business Studies, 2015

There are only a very limited number of instruments at a government's disposal when it tries to stimulate long-run growth, and one of these instruments is fiscal policy. The last few years we have seen government spending, taxation, and deficit financing move to the forefront of policy debates worldwide. That is why it's very important to analyze the way in which taxation and government expenditures influence economic growth. This problem is especially vital for the countries suffering very low or negative rates of growth, as Albania is. The aim of this study is to have a clear view of the fiscal reform process and economic development in Albania starting from 1991 till to present and to analyze the impacts of tax revenue and government expenditures on economic growth and development. In general a tax policy aiming at reducing the number of taxes and tax rates, expanding tax incentives to encourage investment, boost exports, encourage the development of domestic production, ...

Albania Fiscal Policy: Designing Tax Policy by Given Circumstances

mcser.org

I will consider through this paper the fiscal policy that Albania has applied in the recent years. First I will give an overview of macroeconomic situation in Albania. After that I will describe an overview of what tax system looks like in Albania, I will discuss the ...

Assessing the Effects of Tax Elasticity on Government Spending

International Journal of Engineering and Management Research, 2018

This paper assesses the effects of Tax elasticity on Government Spending state wise from 2001-2010 for five major states in terms of population. OLS Regression model is used where the relationships are assumed to be linear. The variables used in the regression model are: G t = the government spending at the state level, the dependent variable Y t = the Gross Domestic Product (GDP) of the state C t = the central assistance to the state , E t = the elasticity variable, The subscript 't' refers to the corresponding year of analysis and b 0, b 1, b 2, b 3, b 4, b 5 are regression coefficients. In most of the cases, elasticity bore a positive and significant relation to the level of government spending except in the case of Bihar, where the coefficient was negative and insignificant.