Cointegration analysis of indirect taxes and economic growth in the Republic of Serbia
Keywords:
value added tax, excises, economic growth, cointegration, Republic of the Serbia
Abstract
This research examines the relationship between indirect taxes and gross domestic product per capita in the Republic of Serbia from 2005 to 2019. The aim of this paper is to evaluate the long-run relationship between value added tax, excises and gross domestic product per capita based on Johansen cointegration test. The empirical analysis includes descriptive statistics, unit root test, cointegration test and FMOLS model. The results reveal a long-run relationship between indirect taxes such as value added tax and excises and the gross domestic product per capita in the Republic of Serbia for the observed period. Empirical findings confirm that revenues of value added tax and excises have positive and significant effect on the gross domestic product per capita in the long-run.
References
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Streimikiene, D., Raheem Ahmed, R., Vveinhardt, J., Ghauri, S. P., & Zahid, S. (2018). Forecasting tax revenues using time series techniques – a case of Pakistan. Economic Research-Ekonomska Istraživanja, 31(1), 722–754. doi:10.1080/1331677x.2018.1442236.
Urban, I. Čok, M., & Verbič, M. (2019). The burden of labour taxation in Croatia, Slovenia and Slovakia in the period 2011-2017. Economic Research-Ekonomska istraživanja, 32(1), 1430-1456. doi: 10.1080/1331677X.2019.1638291.
Xing, J. (2011). Tax structure and growth: How robust is the empirical evidence? Economic Letters, 117(1), 379-382. doi: 10.1016/j.econlet.2012.05.054.
Andrašič, J., Kalaš, B., Mirović, V., Milenković, N., & Pjanić, M. (2018). Econometric modelling of tax impact on economic growth: Panel evidence from OECD countries. Economic Computation and Economic Cybernetics Studies and Research, 52(4), 211-226, doi: 10.24818/18423264/52.4.18.14.
Benkovskis, K., & Fadejeva, L. (2014). The effect of VAT rate on inflation in Latvia: evidence from CPI microdata. Applied Economics, 46(21), 2520–2533. doi:10.1080/00036846.2014.904492.
Castañeda Rodríguez, V. M. (2018). Tax determinants revisited. An unbalanced data panel analysis. Journal of Applied Economics, 21(1), 1–24. doi:10.1080/15140326.2018.1526867.
Dobranschi, M., & Nerudová, D. (2018). Tax Collision: The Effect of VAT and Excise Duties on the Retail Price of Unleaded Gasoline. Ekonomický časopis, 66(7), 643-664.
Durusu-Ciftci, D., Gokmenoglu, K. K., & Yetkiner, H. (2018). The heterogeneous impact of taxation on economic development: New insights from a panel cointegration approach. Economic Systems, 42(3), 503–513. doi:10.1016/j.ecosys.2018.01.001.
Feher, A., Condea, B.V. & Harangus, D. (2019). Impact of harmonization on the implicit tax rate of consumption. Prague Economic Papers, 28(4), 449-464. doi: 10.18267/j.pep.705
Grdinić, M., Drezgić, S., & Blažić, H. (2017). An Empirical Analysis of the Relationship between Tax Structures and Economic Growth in CEE Countries. Ekonomický časopis, 65(5), 426-447.
Hodžić, S., Keček, D., & Mikulić, D. (2018). Sectoral Linkages of Taxes: An Input-Output Analysis of the Croatian Economy. Ekonomický časopis, 66(6), 598-620.
Iyidoǧan, P., Balikcioǧlu, E., & Yilmaz, H. (2017). The Tax Effects of Health Expenditures on Aging Economies: Empirical Evidence on Selected OECD Countries. Romanian Journal of Economic Forecasting, 20(1), 116-127.
Kalaš, B., & Milenković, N. (2017). The role of value added tax in the economy of Serbia. Ekonomika, 63(2), 69-78.
Kalaš, B., Mirović, V., & Andrašić, J. (2018). Empirical analysis of value added tax and inflation rate: Tuckey’s HSD test in selected Western Balkan countries. Ekonomika, 64(2), 99-109.
Laković, T., Mugoša, A., Čizmović, M., & Radojević, G. (2019). Impact of Taxation Policy on Household Spirit Consumption and Public-Finance Sustainability. Sustainability, 11(20), 1-15. doi: 10.3390/su11205858.
Li, J.F., & Lin, Z.X. (2015). The impact of sales tax on economic growth in the United States: an ARDL bound testing approach. Applied Economic Letters, 22(15), 1262-1266. doi: 10.1080/13504851.2015.1023933.
Loganathan, N., Taha, R., Ahmad, N., & Subramaniam, T. (2017). Taxation, growth and the stock traded nexus in emerging Asian countries: heterogeneous and semi-parametric panel estimates. Economic Research-Ekonomska istraživanja, 30(1), 566-580. doi: 10.1080/1331677x.2017.1305789.
Luong, L. & Vu, L.H. (2020). Impacts of Excise Taxation on Non-Alcoholic Beverage Consumption in Vietnam. Sustainability, 12(3), 1-13. doi: 10.3390/su12031092.
McNabb, K. (2018). Tax Structure and Economic Growth: New Evidence from the Government Revenue Dataset. Journal of International Development, 30(2), 173-205. doi: 10.1002/jid.3345.
Milasi, S. & Waldmann, R.J. (2017). Top marginal taxation and economic growth. Applied Economics, 50(19), 2156-2170. doi: 10.1080/00036846.2017.1392001.
Phillips, P. C. B., & Hansen, B. E. (1990). Statistical inference in instrumental variables regression with I(1) processes. Review of Economics Studies, 57(1), 99–125. doi: 10.2307/2297545.
Prichard W, Goodall A, & Cobham A. (2014). The ICTD Government Revenue Dataset. In ICTD Working Paper 19. International Centre for Tax and Development: Brighton.
Sanz-Sanz, J. F., Castañer-Carrasco, J. M., & Romero-Jordán, D. (2016). Consumption tax revenue and personal income tax: analytical elasticities under non-standard tax structures. Applied Economics, 48(42), 4042–4050. doi:10.1080/00036846.2016.1150951.
Simionescu, M., & Albu, L.L. (2016). The impact of standard value added tax on economic growth in CEE-5 countries: econometric analysis and simulations. Technological and Economic Development of Economy, 22(6), 850–866. doi:10.3846/20294913.2016.1244710.
Streimikiene, D., Raheem Ahmed, R., Vveinhardt, J., Ghauri, S. P., & Zahid, S. (2018). Forecasting tax revenues using time series techniques – a case of Pakistan. Economic Research-Ekonomska Istraživanja, 31(1), 722–754. doi:10.1080/1331677x.2018.1442236.
Urban, I. Čok, M., & Verbič, M. (2019). The burden of labour taxation in Croatia, Slovenia and Slovakia in the period 2011-2017. Economic Research-Ekonomska istraživanja, 32(1), 1430-1456. doi: 10.1080/1331677X.2019.1638291.
Xing, J. (2011). Tax structure and growth: How robust is the empirical evidence? Economic Letters, 117(1), 379-382. doi: 10.1016/j.econlet.2012.05.054.
Published
2020-12-17
How to Cite
Kalaš, B., Mirović, V., & Andrašić, J. (2020). Cointegration analysis of indirect taxes and economic growth in the Republic of Serbia. Anali Ekonomskog Fakulteta U Subotici, 56(44), 3-10. https://doi.org/10.5937/AnEkSub2044003K
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