Gross Domestic Product Per Capita and Individual Income Tax Revenue: Empirical Evidence from Vietnam

Nguyen Huu Cung

doi:10.11648/j.ijber.20190806.16

Abstract

Taxes are the most important revenue source for the state budget. Income from individual income tax as a percentage of total tax revenue is increasing according to the development process of each country. The purpose of the article is to analyze the relationship between GDP per capita and individual income tax revenue in Vietnam. Empirical method is employed on secondary time series data set during the period 1999-2018. Econometric tools are employed to present and analyze the collected data from concerned bodies. The result shows that the GDP per capita has a positive effect on individual income tax revenue at 1% significant level. Moreover, the article also finds that tax revenues during the period of the individual income tax law are higher than the period of the income tax ordinance for high-income earners.

Highlights

The appearance of the state requires facilities to ensure the conditions for the state to exist and perform its functions
Tax is a compulsory contribution that is regulated by the state into law so that taxpayers can pay it into the state budget to spend public purposes
The tax system has a main function to raise enough tax revenue to finance essential expenditures on the goods and services provided by government [14]

Summary

Introduction

The appearance of the state requires facilities to ensure the conditions for the state to exist and perform its functions. The emergence of surplus products in the society is the main basis of generating tax revenue for the existence and development of the state. Tax is a compulsory contribution that is regulated by the state into law so that taxpayers can pay it into the state budget to spend public purposes. This contribution is in cash directly and cannot be paid in products or services. The tax system has a main function to raise enough tax revenue to finance essential expenditures on the goods and services provided by government [14].

Objectives

Results

Conclusion