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Determinants of Low Tax Revenue: A panel Data Analysis

Author

Listed:
  • Wasi Ul Islam

    (School of Economics, Quaid-i-Azam University Islamabad, Pakistan)

  • Hafiz Muhammad Abubakar Siddique

    (Federal Urdu University of Arts, Science and Technology, Islamabad, Pakistan)

Abstract

This study is examined the determinants of tax to GDP ratio and to capture the reasons of consistently low tax to GDP ratio for 27 low and high income countries over 2000-2014. To investigate the relationship, we have employed random effect and Arellano bond model. The empirical results showed that tax to GDP ratio has strong link with trade, capital inflow, tax base, corruption and per capita income. The findings exposed that trade openness, capital inflow and per capita income have the positive and significant impact on tax to GDP ratio. The study also found that tax base is positively related to the tax to GDP ratio, as tax base widened, tax to GDP ratio increases.

Suggested Citation

  • Wasi Ul Islam & Hafiz Muhammad Abubakar Siddique, 2017. "Determinants of Low Tax Revenue: A panel Data Analysis," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 6(1), pages 28-34, March.
    • Handle: RePEc:rfh:bbejor:v:6:y:2017:i:1:p:28-34
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Tax to GDP Ratio; Trade Openness; Capital inflow; Arellano-Bond Model;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • B27 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - International Trade and Finance

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