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

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Listed author(s):
  • 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.

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File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I1-P54.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 34 (2014)
Issue (Month): 1 ()
Pages: 567-580

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Handle: RePEc:ebl:ecbull:eb-14-00048
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Keywords: Turkey; tax composition; tax rates estimates on consumption; labor supply.;

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Find related papers by JEL classification:
  • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
  • E0 - Macroeconomics and Monetary Economics - - General

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  1. 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.
  2. 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.
  3. Lars Ljungqvist & Thomas J. Sargent, 2004. "Recursive Macroeconomic Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026212274x, July.
  4. 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.
  5. 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.
  6. Oya Pinar Ardic & Burcay Erus & Gurcan Soydan, 2010. "An evaluation of indirect taxes in Turkey," Economics Bulletin, AccessEcon, vol. 30(4), pages 2787-2801.
  7. Ayse Imrohoroglu & Kaiji Chen, 2012. "Debt and the U.S. Economy," 2012 Meeting Papers 229, Society for Economic Dynamics.
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