Abstract
Tax Buoyancy which measures the effectiveness of tax system is the sum of the reactions in tax revenues (sum of the changes in tax revenues) to the changes in national income and the discretionary changes. In this study, the buoyancy of tax system in Turkey is analyzed with monthly data of centralized executive budget tax revenues and industrial production index (IPI) for the period of 2005 January to 2014 June by means of cointegration and error correction models. According to the results of the analysis, the tax system isn’t a good stabilizator in the short run, but the growth increment affects fiscal sustainability positively in the long run.
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