IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2303.09405.html
   My bibliography  Save this paper

Simplifying and Improving: Revisiting Bulgaria's Revenue Forecasting Models

Author

Listed:
  • Fabio Ashtar Telarico

Abstract

In the thirty years since the end of real socialism, Bulgaria's went from having a rather radically 'different' tax system to adopting flat-rate taxation with marginal tax rates that fell from figures as high as 40% to 10% for both the corporate-income tax and the personal-income tax. Crucially, the econometric forecasting models in use at the Bulgarian Ministry of Finance hinted at an increase in tax revenue compatible with the so-called 'Laffer curve'. Similarly, many economists held the view that revenues would have increased. However, reality fell short of those expectations based on forecasting models and rooted in mainstream economic theory. Thus, this paper asks whether there are betterperforming forecasting models for personal-and corporate-income tax-revenues in Bulgaria that are readily implementable and overperform the ones currently in use. After articulating a constructive critique of the current forecasting models, the paper offers readily implementable, transparent alternatives and proves their superiority.

Suggested Citation

  • Fabio Ashtar Telarico, 2023. "Simplifying and Improving: Revisiting Bulgaria's Revenue Forecasting Models," Papers 2303.09405, arXiv.org.
    • Handle: RePEc:arx:papers:2303.09405
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2303.09405
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rumen Gechev, 2010. "A Low Flat-Rate Tax is Inadequate in Conditions of Crisis," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 142-151, July.
    2. Glenn Jenkins & CHUN-YAN KUO & GANGADHAR SHUKLA, 2000. "Tax Analysis and Revenue Forecasting," Development Discussion Papers 2000-05, JDI Executive Programs.
    3. Frankel, Jeffrey, 2008. "Snake-Oil Tax Cuts," Working Paper Series rwp08-056, Harvard University, John F. Kennedy School of Government.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabio Ashtar Telarico, 2023. "Опростяване И Усъвършенстване [Simplifying and Improving]," Post-Print hal-03989969, HAL.
    2. Fabio Ashtar Telarico, 2022. "Simplify and Improve: Revisiting Bulgaria's Revenue Forecasting Models," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 633-654.
    3. Jeffrey Frankel, 2011. "A Lesson from the South for Fiscal Policy in the US and Other Advanced Countries," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 53(3), pages 407-430, September.
    4. Sean Dougherty & Pietrangelo Biase, 2021. "Who absorbs the shock? An analysis of the fiscal impact of the COVID-19 crisis on different levels of government," International Economics and Economic Policy, Springer, vol. 18(3), pages 517-540, July.
    5. Bernd Hayo & Sascha Mierzwa & Umut Unal, 2021. "Estimating Policy-Corrected Long-Term and Short-Term Tax Elasticities for the United States, Germany, and the United Kingdom," MAGKS Papers on Economics 202112, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Christos Papageorgiou & Panagiotis Farlekas & Zacharias Dermatis, 2021. "Assessing the impact of excise duties on a state’s revenues: the case of Greece," Public Sector Economics, Institute of Public Finance, vol. 45(3), pages 387-412.
    7. Sabaj, Ernil & Kahveci, Mustafa, 2018. "Forecasting tax revenues in an emerging economy: The case of Albania," MPRA Paper 84404, University Library of Munich, Germany.
    8. 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.
    9. Machado, Roberto & Zuloeta, José, 2012. "The Impact of the Business Cycle on Elasticities of Tax Revenue in Latin America," IDB Publications (Working Papers) 4064, Inter-American Development Bank.
    10. P. A. Nazarov & Kazakova, Maria, 2014. "Development of Prediction Model of Basic Budget Parameters in Russian Federation," Published Papers r90220, Russian Presidential Academy of National Economy and Public Administration.
    11. P. A. Nazarov & Kazakova, Maria, 2014. "Theoretical Basis of Prediction of Main Budget Parameters of Country," Published Papers r90221, Russian Presidential Academy of National Economy and Public Administration.
    12. Chimilila, Cyril, 2017. "Forecasting Tax Revenue and its Volatility in Tanzania," African Journal of Economic Review, African Journal of Economic Review, vol. 5(1), January.
    13. Manuel R. Agosin & Alberto Daniel Barreix & Roberto Machado & Juan C. Gómez Sabaini & Jorge Cornick & Carlos Acevedo & Mauricio González Orellana & Osvaldo H. Schenone & Carlos de la Torre, 2005. "Recaudar para crecer: Bases para la reforma tributaria en Centroamérica," IDB Publications (Books), Inter-American Development Bank, number 20678 edited by Manuel R. Agosin & Alberto Daniel Barreix & Roberto Machado, February.
    14. Jeffrey Frankel, 2011. "Over-optimism in forecasts by official budget agencies and its implications," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(4), pages 536-562.
    15. Gangadha Prasad Shukla & Duc Minh Pham & Michael Engelschalk & Tuan Minh Le, 2011. "Tax Reform in Vietnam," World Bank Publications - Reports 26851, The World Bank Group.
    16. P. A. Nazarov & Kazakova, Maria, 2014. "Methodological Principles of Prediction of Tax Revenues of Budgetary System," Published Papers r90219, Russian Presidential Academy of National Economy and Public Administration.
    17. Nepal Rastra Bank & Nepal Rastra Bank, 2018. "Macro Modeling Practices at Nepal Rastra Bank," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 30(1), pages 1-18, April.
    18. Hovick Shahnazarian & Martin Solberger & Erik Spånberg, 2017. "Forecasting and Analysing Corporate Tax Revenues in Sweden Using Bayesian VAR Models," Finnish Economic Papers, Finnish Economic Association, vol. 28(1), pages 50-74, Autumn.
    19. Agosin, Manuel R. & Barreix, Alberto Daniel & Machado, Roberto & Gómez Sabaini, Juan C. & Cornick, Jorge & Acevedo, Carlos & González Orellana, Mauricio & Schenone, Osvaldo H. & De la Torre, Carlos, 2005. "Recaudar para crecer: Bases para la reforma tributaria en Centroamérica," IDB Publications (Books), Inter-American Development Bank, number 276.
    20. Syeda Um Ul Baneen, 2023. "Federal Tax Revenue Forecasting of Pakistan: Alternative Approaches," PIDE-Working Papers 2023:12, Pakistan Institute of Development Economics.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2303.09405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.