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Modelling And Predicting The Indirect Taxes In Romania

Author

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  • SIMIONESCU, Mihaela

    (Institute for Economic Forecasting, Romanian Academy)

Abstract

The main aim of this study is to model and predict the quarterly indirect taxes in Romania. This variable provides important information for the standard levelling in a country. for data covering the period from 2004:Q1 to 2014:Q2, some econometric models were proposed (multiple regression model, trend model and a vector-autoregression-VAR model. 45.52% of the variation in differentiated data series of logarithmic indirect taxes is explained by GDP and share of social assurance. According to Granger causality test for stationary data, at 5% level of significance the GDP index evolution is a cause for the indirect tax. In the first period almost 97.08% of the variation in indirect taxes is due to the changes in the values of this variable while only 2.923% of its variation is determined by the changes in GDP index. For the first 10 periods, the influence of GDP index does not exceed 3%. For the first quarter of 2014, the trend model provided the best prediction while for the second one the VAR process performed the best. For the next quarters of 2014 all the models predicted a decrease in indirect taxes in Romania.

Suggested Citation

  • SIMIONESCU, Mihaela, 2015. "Modelling And Predicting The Indirect Taxes In Romania," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 19(2), pages 67-77.
  • Handle: RePEc:vls:finstu:v:19:y:2015:i:2:p:67-77
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    References listed on IDEAS

    as
    1. André Decoster & Jason Loughrey & Cathal O'Donoghue & Dirk Verwerft, 2010. "How regressive are indirect taxes? A microsimulation analysis for five European countries," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 326-350.
    2. Peter B. Dixon & Maureen T. Rimmer, 1999. "Changes in Indirect Taxes in Australia: A Dynamic General Equilibrium Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(4), pages 327-348.
    3. John Creedy, 1999. "Modelling Indirect Taxes and Tax Reform," Books, Edward Elgar Publishing, number 1940, June.
    4. Ahmed, Vaqar & O' Donoghue, Cathal, 2007. "CGE-Microsimulation Modelling: A Survey," MPRA Paper 9307, University Library of Munich, Germany.
    5. Albu, Lucian Liviu, 2013. "Foreign Trade and FDI as Main Factors of Growth in the EU," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 7-17, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    indirect taxes; forecasts; trend; VAR model;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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