Abstract
Taxation of economic activities is inevitable for formation and maintenance of national budgets. However, the level and payment structure of the taxes and reactions of taxpayers should be considered carefully in the scope of proper management of the taxation system. Agriculture, being the first taxed sector, provides limited insight for assessment of taxation systems. With the field survey conducted with 281 glass and plastic house producers from Antalya, Turkey, it was aimed to understand the impacts of taxes payed on the profitability of farm enterprises as well as main socio-demographic factors. It was found that the enterprises, 76% of which are taxed on real income, achieved to produce 7.190,73 TL (2.463,25 USD) profit per 1.000 m2. Following calculation of the profit level, it was intended to analyse the factors effecting profit inefficiencies of the farm enterprises.Accordingly, stochastic profit frontier was estimated with the data retrieved and it was concluded that both the direct income tax and indirect value-added tax could be used as policy tools to increase profitability and attain sustainability of greenhouse production sector, which is a dominant sector in the Mediterranean region of Turkey. That’s why both tax indicators seemed to be in negative relation with the profit level and there is a possibility to reduce the inefficiency specifically with a VAT revision for the inputs.
Highlights
Taxes which constitute one of the most important and sustainable income sources bear economic and social functions
The profit efficiency of randomly selected 281 greenhouse producers settled in Serik, Kumluca and central towns of Antalya, Turkey was investigated with utilisation of stochastic profit frontier in the scope of our study
The inefficiency scores retrieved from this analysis were used to measure the effects of direct and indirect taxes and relevant social and demographic factors on the profit inefficiency
Summary
Taxes which constitute one of the most important and sustainable income sources bear economic and social functions. Taxes affect production, consumption, savings, investment and employment and bear a regulatory role in development of national economy with its increasing load over the national budget. One of the most important characteristics of taxes is that they are directly transferred from nationals of a country to the national economy, without awaiting a direct return on it. The income level correcting effect of taxes maintains its importance within the society. Tools to assure exemptions and deductions on tax base are used to arrange level of taxes respecting the economic strength of the target audience (Tufan, 1988)
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