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Modelling Oil-Sector Dependency of Tax Revenues in a Resource Rich Country: Evidence from Azerbaijan

Author

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  • Akif Musayev

    (Institute of Economics, Azerbaijan National Academy of Sciences, Baku, Azerbaijan
    Near East University, Nicosia, TRNC
    Azerbaijan University, Baku, Azerbaijan
    Azerbaijan State Oil and Industrial University, Baku, Azerbaijan)

  • Khatai Aliyev

    (Department of World Economy, Baku Engineering University, Khirdalan, Azerbaijan
    Institute of Control Systems, Azerbaijan National Academy of Sciences, Baku, Azerbaijan)

Abstract

Forecasting tax revenues is an important issue in budget planning. As a resource rich country, Azerbaijan's budget revenues is severely depend on oil price and production levels. This study investigates oil sector dependency of state budget tax revenues in case of Azerbaijan by employing FMOLS, DOLS and CCR cointegration methods for the period of 2000Q1-2015Q2. Empirical results indicate statistically and economically significant positive long-run impact of both oil related factors on tax revenues. Considering current fiscal challenges in the country, research findings are very useful for policy purposes and fills the gap in the literature by drawing mechanism of the association and estimating the relationship empirically.

Suggested Citation

  • Akif Musayev & Khatai Aliyev, 2017. "Modelling Oil-Sector Dependency of Tax Revenues in a Resource Rich Country: Evidence from Azerbaijan," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 65(3), pages 1023-1029.
    • Handle: RePEc:mup:actaun:actaun_2017065031023
    DOI: 10.11118/actaun201765031023
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    1. Khatai Aliyev & Altay Ismayilov & Ilkin Gasimov, 2019. "Modelling Elasticity of Non-Oil Tax Revenues to Oil Price Changes: is There U-Shaped Association? Evidence from Azerbaijan," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(3), pages 799-810.
    2. Sugra Ingilab Humbatova & Natig Qadim-Oglu Hajiyev, 2019. "Oil Factor in Economic Development," Energies, MDPI, vol. 12(8), pages 1-40, April.
    3. Niftiyev, Ibrahim, 2022. "Textile and Chemical Subsectors in the Azerbaijani Economy: A Descriptive Glance at Possible De-Industrialization," EconStor Preprints 250900, ZBW - Leibniz Information Centre for Economics.

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