IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-14-00048.html

Average effective tax rates on consumption for Turkey: New data and a comparative analysis

Author

Listed:
  • Murat Üngör

    (Central Bank of the Republic of Turkey)

Abstract

Consumption taxes are the most important source of revenues used to finance public spending in Turkey, where the share of taxes on consumption (general and specific) is more than 40%. This study computes the average effective tax rates on consumption for Turkish economy and provides a glimpse of how Turkey stands in comparison with other OECD countries. We provide new estimates, in a comparative perspective, using national income accounts and tax revenue statistics. Average effective tax rates on consumption increased from around 10.5% in 1998 to around 15.5-16.5% in 2012. Turkey has one of the lowest average effective tax rates on consumption in the OECD and the calculated tax rates are very similar to those for Greece in recent years. We present an exercise and show the importance of time-variant consumption taxes to understand the changes in aggregate labor supply in Turkey. We also note that the revision to the national accounts has effects on the calculated tax rates.

Suggested Citation

  • Murat Üngör, 2014. "Average effective tax rates on consumption for Turkey: New data and a comparative analysis," Economics Bulletin, AccessEcon, vol. 34(1), pages 567-580.
    • Handle: RePEc:ebl:ecbull:eb-14-00048
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I1-P54.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Mendoza, Enrique G. & Razin, Assaf & Tesar, Linda L., 1994. "Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption," Journal of Monetary Economics, Elsevier, vol. 34(3), pages 297-323, December.
    2. Lars Ljungqvist & Thomas J. Sargent, 2004. "Recursive Macroeconomic Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026212274x, December.
    3. Mathias Trabandt & Harald Uhlig, 2012. "How Do Laffer Curves Differ across Countries?," NBER Chapters, in: Fiscal Policy after the Financial Crisis, pages 211-249, National Bureau of Economic Research, Inc.
    4. Oya Pinar Ardic & Burcay Erus & Gurcan Soydan, 2010. "An evaluation of indirect taxes in Turkey," Economics Bulletin, AccessEcon, vol. 30(4), pages 2787-2801.
    5. Mendoza, Enrique G. & Milesi-Ferretti, Gian Maria & Asea, Patrick, 1997. "On the ineffectiveness of tax policy in altering long-run growth: Harberger's superneutrality conjecture," Journal of Public Economics, Elsevier, vol. 66(1), pages 99-126, October.
    6. Ohanian, Lee & Raffo, Andrea & Rogerson, Richard, 2008. "Long-term changes in labor supply and taxes: Evidence from OECD countries, 1956-2004," Journal of Monetary Economics, Elsevier, vol. 55(8), pages 1353-1362, November.
    7. Mathias Trabandt & Harald Uhlig, 2012. "How Do Laffer Curves Differ across Countries?," NBER Chapters, in: Fiscal Policy after the Financial Crisis, pages 211-249, National Bureau of Economic Research, Inc.
    8. Bjørn Volkerink & Jan-Egbert Sturm & Jakob de Haan, 2002. "Tax Ratios in Macroeconomics: Do Taxes Really Matter?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 29(3), pages 209-224, September.
    9. Kaiji Chen & Ayşe İmrohoroğlu, 2017. "Debt in the US economy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 64(4), pages 675-706, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Eren, Okan & Genç İleri, Şerife, 2022. "Life cycle analysis of savings accounts with matching contributions," Economic Modelling, Elsevier, vol. 116(C).
    2. Georges, Patrick & Seçkin, Aylin, 2016. "From pro-natalist rhetoric to population policies in Turkey? An OLG general equilibrium analysis," Economic Modelling, Elsevier, vol. 56(C), pages 79-93.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. D’Erasmo, P. & Mendoza, E.G. & Zhang, J., 2016. "What is a Sustainable Public Debt?," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 2493-2597, Elsevier.
    2. Jing Zhang, 2015. "Saving Europe?," 2015 Meeting Papers 599, Society for Economic Dynamics.
    3. Enrique G. Mendoza & Linda L. Tesar & Jing Zhang, 2014. "Saving Europe?: The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies," Working Paper Series WP-2014-13, Federal Reserve Bank of Chicago.
    4. Felipe Meza, 2008. "Financial Crisis, Fiscal Policy, and the 1995 GDP Contraction in Mexico," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(6), pages 1239-1261, September.
    5. Kostarakos, Ilias & Varthalitis, Petros, 2020. "Effective tax rates in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS110.
    6. Henning Bohn, 2013. "Low Altruism, Austerity, and Aversion to Default: Are Countries Converging to the Natural Debt Limit?," CESifo Working Paper Series 4270, CESifo.
    7. Ignacio Lozano-Espitia & Fernando Arias-Rodríguez & Jesus Bejarano & Andres Gonzalez & Clark Granger-Castaño & Franz Hamann & Yurany Hernández-Turca & Juan Manuel Julio-Román & Martha López & Juan C. , 2019. "La política fiscal y la estabilización macroeconómica en Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, issue 90, pages 1-60, April.
    8. Ferraro, Domenico & Peretto, Pietro F., 2020. "Innovation-led growth in a time of debt," European Economic Review, Elsevier, vol. 121(C).
    9. Dimitris Papageorgiou, 2009. "Macroeconomic Implications of Alternative Tax Regimes: The Case of Greece," Working Papers 97, Bank of Greece.
    10. Abad, Nicolas & Venditti, Alain, 2021. "A Note On Balanced-Budget Income Taxes And Aggregate (In)Stability In Multi-Sector Economies," Macroeconomic Dynamics, Cambridge University Press, vol. 25(3), pages 824-843, April.
    11. Röhrs, Sigrid & Winter, Christoph, 2017. "Reducing government debt in the presence of inequality," Journal of Economic Dynamics and Control, Elsevier, vol. 82(C), pages 1-20.
    12. repec:ecr:col037:5367 is not listed on IDEAS
    13. Peter Lindert, 2003. "Why The Welfare State Looks Like a Free Lunch," Working Papers 59, University of California, Davis, Department of Economics.
    14. Norman Gemmell & Richard Kneller & Ismael Sanz, 2014. "The growth effects of tax rates in the OECD," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1217-1255, November.
    15. Giovanni Facchini & Anna Maria Mayda, 2009. "Does the Welfare State Affect Individual Attitudes toward Immigrants? Evidence across Countries," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 295-314, May.
    16. Christian vom Lehn & Eric Fisher & Aspen Gorry, 2018. "Male Labor Supply and Generational Fiscal Policy," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 28, pages 121-149, April.
    17. Alonso-Ortiz, Jorge, 2014. "Social security and retirement across the OECD," Journal of Economic Dynamics and Control, Elsevier, vol. 47(C), pages 300-316.
    18. YAN Chengliang & GONG Liutang, 2009. "Government expenditure, taxation and long-run growth," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 4(4), pages 505-525, December.
    19. Nazila Alinaghi & W. Robert Reed, 2021. "Taxes and Economic Growth in OECD Countries: A Meta-analysis," Public Finance Review, , vol. 49(1), pages 3-40, January.
    20. Enrique G. Mendoza & Linda L. Tesar, 2003. "Winners and Losers of Tax Competition in the European Union," NBER Working Papers 10051, National Bureau of Economic Research, Inc.
    21. Eusepi, Stefano & Preston, Bruce, 2015. "Consumption heterogeneity, employment dynamics and macroeconomic co-movement," Journal of Monetary Economics, Elsevier, vol. 71(C), pages 13-32.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E0 - Macroeconomics and Monetary Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-14-00048. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.