An empirical study on the relationship of the tax revenues with the changes of economic activity volume in Turkey

In this study on the relationship between tax revenues and changes in the economic activity volume, the effets of changes in the Real Gross Domestic Product of Turkey between the period of 2006-2015 on the Personel Income Tax, Corporate Tax, Value Added Tax Inward, Value Added Tax on Imports, Excise Duty and the Total Tax Revenues examined by Nonlinear Autoregressive Distributed Lag (NARDL) method. The effects of increases and decreases in Real Gross Domestic Product on tax revenue items and total tax revenues were researched in this context. The concepts of tax elasticity and tax buoyancy in fiscal theory were used in interpretation of the findings of this study. In conclusion, the existence of long-term asymmetrical relationships between the said tax revenue items, total tax revenues and the Real Gross Domestic Product in Turkey during the period of 2006-2015 has been identified. It has been observed that the increases and decreases in Real Gross Domestic Product have different effects on each tax revenue items. Thus, it is concluded that the tax revenues are sensitive to the increases in the volume of economic activity and the tax system is elastic and buoyant in Turkey during the period of 2006-2015.