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Trends in tax revenues of transition economies: an empirical approach

Author

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  • Ismoil Khujamkulov

    (Government of Canada)

  • Sohrab Abizadeh

    (University of Winnipeg)

Abstract

Economic theory postulates that taxes and alternative tax policies have different impacts on economic growth. Some scholars have argued that economic growth can result in an increase in total tax revenues and its ratio to GDP. Our study investigates the impact of economic growth on total tax revenues and different tax share ratios in transitional economies. We find strong support for the hypothesis that economic growth leads to an increase in total tax revenue-to-GDP ratio. We also find that economic growth has led to, and facilitated, changes in the relative shares of different tax sources in transition countries over time differently thus allowing these countries to streamline their taxes and properly plan for and alter their tax system accordingly.

Suggested Citation

  • Ismoil Khujamkulov & Sohrab Abizadeh, 2023. "Trends in tax revenues of transition economies: an empirical approach," Empirical Economics, Springer, vol. 64(2), pages 833-868, February.
    • Handle: RePEc:spr:empeco:v:64:y:2023:i:2:d:10.1007_s00181-022-02269-7
    DOI: 10.1007/s00181-022-02269-7
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    More about this item

    Keywords

    Transition economies; Economic growth; Tax ratio and tax shares;
    All these keywords.

    JEL classification:

    • P35 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

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