Determining the Exogeneity of Tax Components with Respect to GDP
In this study we examine the relationship between tax revenues and GDP for Turkey for the period from 2004.Q1 to 2012.Q1. The effectiveness of tax components on GDP are investigated by using Johansen and Juselius (1990) cointegration and Granger Causality test. According to our findings, the main categories of taxes are cointegrated with GDP but the sub categories are not. This results means that more than optimal level of tax is collecting in some sub categories. When determined these sub categories, we have found as result that policy makers should increase Withholding Income Tax. When consider Special Consumption Tax, except Tobacco and Alcohol Products’ SCT, all categories of Special Consumption Tax should be increased.
Volume (Year): 3 (2013)
Issue (Month): 3 (July)
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References listed on IDEAS
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- Alain Hecq & Franz Palm & Jean-Pierre Urbain, 2002.
"Separation, Weak Exogeneity and P-T Decomposition in Cointegrated VAR Systems with Common Features,"
CESifo Working Paper Series
660, CESifo Group Munich.
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- Mehmet Serkan Tosun & Sohrab Abizadeh, 2005. "Economic growth and tax components: an analysis of tax changes in OECD," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2251-2263.
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