FACTORS AFFECTING TAX STRUCTURE IN DEVELOPING COUNTRIES
Main Article Content
Abstract
Many developing countries in the world are still heavily dependent on foreign trade taxes, but trade liberalization can reduce this revenue. In empirical studies, this issue is of interest to researchers, so the aim of the study is to examine the factors affecting tax structure in 55 developing countries 2000 - 2019 in the context of trade liberalization, in which the author focuses on trade liberalization affecting tax structure using two-step Dif - GMM estimation methods for panel data. Empirical results show that the factors affect differently on each tax structure. When conducting trade liberalization, government spending and trade liberalization increase income tax and trade taxes. Economic growth increases income and consumption tax, while the share of the agricultural sector has a negative impact on the tax structure. In addition, the trade liberalization does not have a positive effect on consumption tax.
Article Details
Keywords
Tax structure, Developing countries
References
Aaron, H. (1976). Inflation and the income Tax. The American Economic Review, 66(2), 193-199.
Adam, C. S., Bevan, D. L., & Chambas, G. (2001). Exchange Rate Regimes and Revenue Performance in Sub-Saharan Africa. Journal of Development Economics, 64(1), 173-213.
Agbeyegbe, T. D., Stotsky, J., & WoldeMariam, A. (2006). Trade liberalization, exchange rate changes, and tax revenue in Sub-Saharan Africa. Journal of Asian Economics, 17(2), 261-284.
Ahmad, E., & Stern, N. (1991). The theory and practice of tax reform in developing countries. Cambridge University Press.
Anderson, W., Wallace, M. S., & Warner, J. T. (1986). Government Spending and Taxation: What Causes What?. Southern Economic Journal (1986-1998), 52(3), 630.
Baunsgaard, T., & Keen, M. (2005). Tax revenue and (or?) trade liberalization. IMF Working Papers, 5, 112.
Baunsgaard, T., & Keen, M. (2010). Tax revenue and (or?) trade liberalization. Journal of Public Economics, 94(9-10), 563-577.
Castles, F. G., & Dowrick, S. (1990). The impact of government spending levels on medium-term economic growth in the OECD, 1960-85. Journal of Theoretical Politics, 2(2), 173-204.
Chelliah, R. J. (1971). Trends in taxation in developing countries. Staff Papers, 18(2), 254-331.
Ebrill, L. P., Stotsky, J. G., & Gropp, R. (1999). Revenue implications of trade liberalization (No. 180). Washington DC: International monetary fund.
Gobachew, N. (2017). Determinants of Tax Revenue in Ethiopia (Doctoral dissertation).
Greenaway, D., Morgan, W., & Wright, P. (2002). Trade liberalisation and growth in developing countries. Journal of development economics, 67(1), 229-244.
Greytak, D., & McHugh, R. (1978). The Effects Of Federal Income Taxation And Inflation On Regional Income Inequalities. Journal of Regional Science, 18(1), 57-70.
Hatzipanayotou, P., Michael, M. S., & Miller, S. M. (1994). Win-win indirect tax reform: a modest proposal. Economics Letters, 44(1-2), 147-151.
Hettich, W. & Winer, S. (1984). A Positive Model of Tax Structure. Journal of Public Economics, 24(1), 67-87.
Hinrichs, H.H. (1966). A General Theory of Tax Structure Change During Economic Development. Cambridge, Mass.: Harvard University Press.
Hồ Thủy Tiên & Trần Xuân Hằng. (2021). Cấu trúc thuế và tự do hóa thương mại: Nghiên cứu thực nghiệm tại các nước ASEAN. Tạp Chí Nghiên cứu Tài chính - Marketing, (57). https://doi.org/10.52932/jfm.vi57.93
Karagöz, K. (2013). Determinants of tax revenue: does sectorial composition matter?. Journal of Finance, Accounting & Management, 4(2), 50-63.
Karimi, M., Kaliappan, S. R., Ismail, N. W., & Hamzah, H. Z. (2016). The impact of trade liberalization on tax structure in developing countries. Procedia Economics and Finance, 36, 274-282.
Keen, M. M., & Ligthart, M. J. E. (1999). Coordinating tariff reduction and domestic tax reform. International Monetary Fund.
Khattry, B., & Rao, J. M. (2002). Fiscal faux pas?: an analysis of the revenue implications of trade liberalization. World Development, 30(8), 1431-1444.
Leuthold, J. H. (1991). Tax shares in developing economies a panel study. Journal of development Economics, 35(1), 173-185.
Longoni, E. (2009). Trade Liberalization and Trade Tax Revenues in African Countries (No. 158). University of Milano-Bicocca, Department of Economics.
Lotz, J. R., & Morss, E. R. (1967). Measuring “tax effort” in developing countries. Staff Papers, 14(3), 478-499.
Lucotte, Y. (2010). The choice of adopting inflation targeting in emerging economies: Do domestic institutions matter? (No. 27118). University Library of Munich, Germany.
Mahdavi, S. (2008). The level and composition of tax revenue in developing countries: Evidence from unbalanced panel data. International Review of Economics & Finance, 17(4), 607-617.
Mahmood, H., & Chaudhary, A. R. (2013). Impact of FDI on tax revenue in Pakistan. Pakistan Journal of Commerce and Social Sciences (PJCSS), 7(1), 59-69.
Nguyễn Văn Thuận, Xuân Hằng Trần, Minh Hằng Nguyễn, Thị Kim Chi Nguyễn. (2020). Tác động của thuế đến tăng trưởng kinh tế tại các nước đang phát triển khu vực châu Á. Tạp Chí Nghiên cứu Tài chính - Marketing, (60). https://doi.org/10.52932/jfm.vi60.4
Omoruyi, S. E. (1983). Growth and Flexibility of Federal Government Tax Revenue: 1960 -1979. Economic and Financial Review, 21(1), 11 – 19
Peacock, A. T., & Wiseman, J. (1979). Approaches to the analysis of government expenditure growth. Public Finance Quarterly, 7(1), 3-23.
Peters, B. G. (2002). The Politics of bureaucracy. Routledge.
Pupongsak, S. (2010). The effect of trade liberalization on taxation and government revenue. Doctoral dissertation, University of Birmingham.
Ramsey, F. P. (1927). A Contribution to the Theory of Taxation. The economic journal, 37(145), 47-61.
Rao, M. G. (2000). Tax reform in India: achievements and challenges. Asia Pacific Development Journal, 7(2), 59-74.
Stotsky, J. G., & WoldeMariam, A. (1997). Tax effort in sub-Saharan Africa. IMF Working Paper
Tanzi, V. (1992). Structural factors and tax revenue in developing countries: A decade of evidence. In I. Goldin & L. A. Winters (Eds.), Open economies: Structural adjustment and agriculture (pp. 267–281). Cambridge: Cambridge University Press.
Velaj, E., & Prendi, L. (2014). Tax revenue-The determinant factors-The case of Albania. European Scientific Journal,1, 526-531.
Von Furstenberg, G., Green, R. J., & Jeong, J. H. (1986). Tax and Spend, or Spend and Tax?. The Review of Economics and Statistics, 68(2), 179-88.
Wanniski, J. (1978). Taxes, revenues, and the Laffer curve. The Public Interest, 50, 3.
Adam, C. S., Bevan, D. L., & Chambas, G. (2001). Exchange Rate Regimes and Revenue Performance in Sub-Saharan Africa. Journal of Development Economics, 64(1), 173-213.
Agbeyegbe, T. D., Stotsky, J., & WoldeMariam, A. (2006). Trade liberalization, exchange rate changes, and tax revenue in Sub-Saharan Africa. Journal of Asian Economics, 17(2), 261-284.
Ahmad, E., & Stern, N. (1991). The theory and practice of tax reform in developing countries. Cambridge University Press.
Anderson, W., Wallace, M. S., & Warner, J. T. (1986). Government Spending and Taxation: What Causes What?. Southern Economic Journal (1986-1998), 52(3), 630.
Baunsgaard, T., & Keen, M. (2005). Tax revenue and (or?) trade liberalization. IMF Working Papers, 5, 112.
Baunsgaard, T., & Keen, M. (2010). Tax revenue and (or?) trade liberalization. Journal of Public Economics, 94(9-10), 563-577.
Castles, F. G., & Dowrick, S. (1990). The impact of government spending levels on medium-term economic growth in the OECD, 1960-85. Journal of Theoretical Politics, 2(2), 173-204.
Chelliah, R. J. (1971). Trends in taxation in developing countries. Staff Papers, 18(2), 254-331.
Ebrill, L. P., Stotsky, J. G., & Gropp, R. (1999). Revenue implications of trade liberalization (No. 180). Washington DC: International monetary fund.
Gobachew, N. (2017). Determinants of Tax Revenue in Ethiopia (Doctoral dissertation).
Greenaway, D., Morgan, W., & Wright, P. (2002). Trade liberalisation and growth in developing countries. Journal of development economics, 67(1), 229-244.
Greytak, D., & McHugh, R. (1978). The Effects Of Federal Income Taxation And Inflation On Regional Income Inequalities. Journal of Regional Science, 18(1), 57-70.
Hatzipanayotou, P., Michael, M. S., & Miller, S. M. (1994). Win-win indirect tax reform: a modest proposal. Economics Letters, 44(1-2), 147-151.
Hettich, W. & Winer, S. (1984). A Positive Model of Tax Structure. Journal of Public Economics, 24(1), 67-87.
Hinrichs, H.H. (1966). A General Theory of Tax Structure Change During Economic Development. Cambridge, Mass.: Harvard University Press.
Hồ Thủy Tiên & Trần Xuân Hằng. (2021). Cấu trúc thuế và tự do hóa thương mại: Nghiên cứu thực nghiệm tại các nước ASEAN. Tạp Chí Nghiên cứu Tài chính - Marketing, (57). https://doi.org/10.52932/jfm.vi57.93
Karagöz, K. (2013). Determinants of tax revenue: does sectorial composition matter?. Journal of Finance, Accounting & Management, 4(2), 50-63.
Karimi, M., Kaliappan, S. R., Ismail, N. W., & Hamzah, H. Z. (2016). The impact of trade liberalization on tax structure in developing countries. Procedia Economics and Finance, 36, 274-282.
Keen, M. M., & Ligthart, M. J. E. (1999). Coordinating tariff reduction and domestic tax reform. International Monetary Fund.
Khattry, B., & Rao, J. M. (2002). Fiscal faux pas?: an analysis of the revenue implications of trade liberalization. World Development, 30(8), 1431-1444.
Leuthold, J. H. (1991). Tax shares in developing economies a panel study. Journal of development Economics, 35(1), 173-185.
Longoni, E. (2009). Trade Liberalization and Trade Tax Revenues in African Countries (No. 158). University of Milano-Bicocca, Department of Economics.
Lotz, J. R., & Morss, E. R. (1967). Measuring “tax effort” in developing countries. Staff Papers, 14(3), 478-499.
Lucotte, Y. (2010). The choice of adopting inflation targeting in emerging economies: Do domestic institutions matter? (No. 27118). University Library of Munich, Germany.
Mahdavi, S. (2008). The level and composition of tax revenue in developing countries: Evidence from unbalanced panel data. International Review of Economics & Finance, 17(4), 607-617.
Mahmood, H., & Chaudhary, A. R. (2013). Impact of FDI on tax revenue in Pakistan. Pakistan Journal of Commerce and Social Sciences (PJCSS), 7(1), 59-69.
Nguyễn Văn Thuận, Xuân Hằng Trần, Minh Hằng Nguyễn, Thị Kim Chi Nguyễn. (2020). Tác động của thuế đến tăng trưởng kinh tế tại các nước đang phát triển khu vực châu Á. Tạp Chí Nghiên cứu Tài chính - Marketing, (60). https://doi.org/10.52932/jfm.vi60.4
Omoruyi, S. E. (1983). Growth and Flexibility of Federal Government Tax Revenue: 1960 -1979. Economic and Financial Review, 21(1), 11 – 19
Peacock, A. T., & Wiseman, J. (1979). Approaches to the analysis of government expenditure growth. Public Finance Quarterly, 7(1), 3-23.
Peters, B. G. (2002). The Politics of bureaucracy. Routledge.
Pupongsak, S. (2010). The effect of trade liberalization on taxation and government revenue. Doctoral dissertation, University of Birmingham.
Ramsey, F. P. (1927). A Contribution to the Theory of Taxation. The economic journal, 37(145), 47-61.
Rao, M. G. (2000). Tax reform in India: achievements and challenges. Asia Pacific Development Journal, 7(2), 59-74.
Stotsky, J. G., & WoldeMariam, A. (1997). Tax effort in sub-Saharan Africa. IMF Working Paper
Tanzi, V. (1992). Structural factors and tax revenue in developing countries: A decade of evidence. In I. Goldin & L. A. Winters (Eds.), Open economies: Structural adjustment and agriculture (pp. 267–281). Cambridge: Cambridge University Press.
Velaj, E., & Prendi, L. (2014). Tax revenue-The determinant factors-The case of Albania. European Scientific Journal,1, 526-531.
Von Furstenberg, G., Green, R. J., & Jeong, J. H. (1986). Tax and Spend, or Spend and Tax?. The Review of Economics and Statistics, 68(2), 179-88.
Wanniski, J. (1978). Taxes, revenues, and the Laffer curve. The Public Interest, 50, 3.
Most read articles by the same author(s)
- Nguyen Van Thuan, Nguyen Thi Kim Chi, Tran Xuan Hang, Nguyen Minh Hang, The impact of tax competition on foreign direct investment in ASEAN countries , Journal of Finance and Marketing: No. 61 (2021)
- Ho Thuy Tien, Tran Xuan Hang, Trade liberalization and tax structure: New evidence from ASEAN countries , Journal of Finance and Marketing: No. 57 (2020)