Factors that Influence Tax Revenue and Government Expenditure in the Asia Pacific Region (original) (raw)

Factors Impacting Tax Revenue of Southeast Asian Countries

Econometrics for Financial Applications, 2017

Tax revenue is important for the country to ensure important government spending. This is even more important for a developing country. By analyzing panel data, we find factors that affect tax revenues of Southeast Asian countries during 10 years, for the period 2006-2015. The results show that there are four positive factors for tax revenues: GDP per capita, Trade volume, Agricultural sector, Industry sector. This result is in accordance with the characteristics and general conditions of these countries.

Analysis of the relationship between Tax Revenue and Government Expenditures in Indonesia

Journal of International Conference Proceedings, 2021

In reality, government spending in emerging nations has been steadily increasing from time to time. Controlling it through fiscal policy, such as tax collections and government expenditure, is one of the measures that may be implemented. The primary goal of this study is to determine the magnitude of the link between tax income and government spending in Indonesia from 2000 to 2020. The World Development Index and the Central Bureau of Statistics are the primary data sources used by the researcher to attain this study goal. The researcher utilized the Vector autoregressive (VAR) technique and the Granger causality test to determine the link between tax income and government spending. Because the coefficient of determination is 65.41 percent, which is far from 100 percent, and the two variables, namely tax revenues and government expenditures, are not affected by the clause relationship, the results of this study indicate that the trend of the government expenditure ratio is less stable. The two variables do, however, have a short-term link, and there is no long-term balancing relationship between government spending and tax income.

Factors Influencing Tax Income: A Panel Data Analysis

International Journal of Scientific and Research Publications (IJSRP)

This study analyzes the factors that are thought to affect tax revenues. The data used in this study is panel data involving seven ASEAN countries for 2009-2015. The Hausman test was carried out to determine the estimation model correctly, and the results revealed that the fixed-effects model was preferred. Based on the fixed-effects model's estimation results, this study finds that per capita income, the industrial sector's contribution in GDP, and trade liberalization have a significant and positive effect on tax revenue. In contrast, inflation worsens the flow of tax revenues significantly. Based on the results of this study, we recommend several policies that can be taken to increase the productivity of tax revenues by focusing on those four macroeconomic factors.

MACROECONOMIC DETERMINANTS OF TAX REVENUE AND TAX EFFORT IN SOUTHEAST ASIAN COUNTRIES

JDE (Journal of Developing Economies), 2020

This paper analyzes macroeconomic indicators that determine tax revenues in six Southeast Asian countries during 2008-2019. The estimation results are then used to predict the value of taxable capacity to construct the index of tax effort. Using the FE model equipped with the Driscoll-Kraay standard errors, this study finds positive and significant effects of per capita income, manufacturing, and trade openness on the actual tax-to-GDP ratio and tax effort. In contrast, inflation is considered a superfluous determinant because of its insignificant effect on the two measures of tax performance. In addition, the authors also classify countries into three different groups based on the actual level of tax revenue and the effort put into collecting taxes. The benchmarks used to rank countries are all sample countries' median actual tax revenue and the tax effort index 1. Regardless of the classification, several policy implications are offered to increase tax collection productivity by focusing on the revenue bases used in the estimation model.

Factors impacting state tax revenue in ASEAN countries

International Journal of Public Sector Performance Management, 2022

The article aims to identify and assess the impact of factors on total tax revenue of ASEAN countries. It is important because tax revenue rate is of critical measure of state and government public performance. On the basis of secondary data sources collected from the World Bank and agencies in the period 2000-2019 of 10 ASEAN countries and using the GMM difference estimation method, the research result shows that the factors (variables) such as income per capita, trade openness, increased share in agriculture, political rights, and civic liberties have a positive effect on tax revenues. This results are consistent with the major findings of previous studies and suggest many governance implications for authorities in implementing policies to increase tax revenue in these countries.

Correlation between tax revenues and gross domestic product: Evidence from the developing economy

Corporate and Business Strategy Review

This paper examines the relationship between tax revenues and the economic growth of Kosovo as a developing country. The paper uses quarterly time series data for 2010:Q1–2021:Q4 collected by the Kosovo Statistical Agency and the Ministry of Finance of Kosovo. The data were analyzed using EViews v10. Augmented Dickey-Fuller (ADF), Johansen cointegration test, vector autoregressive (VAR) model, vector error correction model (VECM) estimation, and Granger causality test was used to analyze the model. The VECM results showed that fluctuations in tax revenues have a negative effect on the gross domestic product (GDP) in the long run. Using data from nine countries, Nguyen and Darsono (2022) demonstrated that tax revenues have an adverse effect on economic growth. Using Granger causality, the results showed that tax revenue growth could cause GDP growth, and GDP growth can cause tax revenue. Okonkwo (2018) recommends that the government tighten tax collection methods and regularly evalua...

Determinants of Tax Revenue: A Comparison Between ASEAN-7 Plus China And 8- European Countries

International Journal of Business and Society

The aim of this paper is analyzing the level ratio of tax revenue and GDP depending on different consumer behaviors between two groups of countries: ASEAN-7 plus China (called the Eastern) and eight European countries (called the Western). The study applied the Feasible Generalized Least Square model to confirm the robustness of the Panel Corrected Standard Errors model, and the results indicate that all countries have a positive association between tax revenue with the human capital and FDI variables. In addition, in the Eastern, forest area and broad money has a statistically significantly positive impact on tax revenue while gross savings has a negative one. Further, the Western witnessed the positive impact with gross savings while broad money variables lead to a decrease in tax revenue. The major results indicate that in the East, the Governments should focus on how to improve their taxation by promoting the broad money - M2 and expanding the forest area as well as support thei...

Measuring the Tax Buoyancy: Empirics from South Asian Association for Regional Cooperation (SAARC)

MPRA Paper, 2021

Taxes are the backbone of an economy, therefore, an effective tax system is very necessary for the survival of an economy. All the modern and developed economies have a higher rate of taxes as a percentage of GDP e.g. UK 33%, the USA 24.5%, Germany 38.8%, and France 45.4% (OECD, 2019). So, it is always important to measure the tax buoyancy among and within countries. This article has examined the buoyancy of taxes among the selected South Asian Association for Regional Cooperation (SAARC) countries from 1990 to 2019. Pooled regression has been applied for measuring the tax buoyancy coefficients for sales tax, income tax, customs duty, excise duty, and total tax revenue. The findings show that sales tax, income tax, and total tax revenue are significant with the buoyancy coefficient of 1.30, 1.12, and 1.01, respectively. Whereas the excise and customs, duties show a positive but insignificant buoyancy coefficient of 0.81 and 0.62, respectively. Among all revenue generation taxes, income tax and sales tax are leading; this indicates that South Asian countries prefer a

Effect of Tax Rates and Tax Reform OnTax Revenue in ASEAN Countries

International Journal of Business and Management Invention (IJBMI), 2021

ASEAN countries as regional organizations have an average member of developing countries with a per capita income of the majority of the community being lower-middle with a range of $4097 and categorized as an emerging economy by the World Bank. The majority of ASEAN countries rely on state revenues from tax sources allocated to develop the country. Inspired by his contribution, this paper tries to analyze more deeply related to the implementation of tax rates and tax reforms that have been carried out in ASEAN on tax revenues.This paper analyses how much influence the fiscal policies of ASEAN countries have in this case tax rates and tax reform with panel data regression techniques between 1999 and 2019 over 20 years. This paper finds that the tax rate has a negative and significant effect, meaning that it has made a small contribution to tax revenue. Furthermore, and tax reform has been effectively implemented and has a significant positive effect on tax revenue