Determination of Factors Affecting Tax Revenues

Abstract

Countries act in line with the effort to obtain optimum tax revenue in financing basic expenditures without resorting to public sector borrowing. Many countries aimed to implement efficient tax policies to increase their tax revenues with the desire to reach the highest level in economic growth and development by using their limited resources effectively. In this context, it is important to examine which factors will affect tax revenues under which constraints for both developed and developing countries. This study aims to determine the factors affecting tax revenues from 2007 to 2019 based on selected countries among the important countries in tax revenues in general. While the dependent variable used in this study is tax revenues, the independent variables are gross domestic product (GDP), human capital index and political stability index. The econometric method used in the study is the panel data analysis method, in which fixed effects, random effects, generalized method of moments (GMM) and system GMM models were applied. In the study, it was found that gross domestic production, human capital index and political stability index had a statistically significant and positive effect on tax revenues.