Abstract
A modern government collects required funds through different sources; mainly from revenue and debt. Among different sources, taxation is the most important sources of government revenue and Gross Domestic Product (GDP) of a nation. In this paper, an attempt has been made to examine the contribution of tax revenue to GDP and government revenue of Nepal. The main questions addressed for the study were to find the proportion of tax in government revenue collection and to know whether the resource gap of Nepal is in increasing or decreasing trend. This study is mainly based on secondary data collected from government sources. Nationwide data of both direct and indirect taxes, total government revenue and GDP for the period of last fifteen years from F/Y 2002/03 to F/Y 2016/17 have been taken for the study. In order to assess the contribution of tax revenue on government revenue and GDP, co-relation and multiple regression analysis have been done separately and the results have been verified by using test statistics (t-test and f-tests). Similarly, to observe the long-term growth of tax revenue, time series analysis has been done by using straight line trend method. The study has concluded that GDP and government revenue have been strongly related with direct and indirect tax revenues of Nepal.
Highlights
A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer whether an individual or other legal entity by a governmental organization in order to fund various public expenditures
This study looks at the composition and trends of tax revenues in the UK and provides a brief overview of somehow complicated system of three main taxes: personal income tax, national insurance contributions (NICs) and value added tax (VAT) in the UK
It has a distinct contribution to Gross Domestic Product (GDP), government revenue
Summary
A tax is a mandatory financial charge or some other type of levy imposed upon a taxpayer whether an individual or other legal entity by a governmental organization in order to fund various public expenditures. The government requires a huge amount of resources for carrying out various development and welfare activities in the country which it collects by imposing taxes. Tax collected by the government is spent for infrastructural development and public welfare In this way, the wealth of the high earners is redistributed to the whole community. The government provides tax exemptions or concessions for industries established or activities carried out International Journal of Business and Economics Research 2019; 8(3): 85-96 in backward areas This will help increase economic activities in those areas and regional disparity reduces to minimum. Examples include VAT, excise duty, import & export duty It is more convenient as the taxpayer does not have to pay a lump sum amount for tax. The main questions addressed for the study are to find the proportion of tax in government revenue collection and to know whether the resource gap of Nepal is in increasing or decreasing trend
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