Abstract
This paper examines the relationships between taxation mix and economic growth in the Turkish economy. Tax burden, gross fixed capital formation/GDP and gross domestic savings/GDP ratio were also taken into account in the study. Causality analysis and impulse-response functions were used in the analysis. According to results obtained through causality analysis, there is one-way casual relationship between economic growth and taxation mix which flows from economic growth to taxation mix. One-way casual relationship was found between direct tax revenues/GDP ratio (tax burden) to economic growth. Economic growth is Granger cause of both gross fixed capital formation/GDP and gross domestic savings/GDP ratio. Impulse-response functions indicate that economic growth responds to indirect tax revenues with positive direction whereas economic growth responds to direct tax revenues with negative direction in the first stage and then they move together after 3-4 periods on the average. Economic growth responds to tax burden with positive direction and they move together after 3-4 periods.
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