The relationship between tax revenues and economic growth: An analysis on developing countries

Taxes, which have a history as old as human history, have been constantly discussed. Discussions are centered between suspension and interpretation arrangements. Taxes, which are among the fiscal policy instruments, are tried to be run economically. In this context, the guarantee of growth is accepted among economic employment. Taxes play an important role in ensuring growth. In addition to the employees that taxes are important for growth, there is also an operation that advocates the opposite opinion. It is also possible to come across to reveal that there is no relationship between the two. The relationship between taxes and growth, which is affected by this situation, has been revealed by econometric guidance. With this study, it is aimed to provide guiding suggestions to these aimless policy advocates, since taxes will arise in realizing the economic functions of the system. The effect of total taxes, direct taxes and consumer taxes on economic growth of 20 selected OECD countries for the period 1980-2020 results in a panel data analysis. The amounts brought by the two models are consistent with the Westerlund (2007) cointegration analysis, primarily the effect of total taxes on economic growth, and in the second model, the effect of direct and restrictive taxes on economic growth. In both models, a cointegration relationship was found between the variables. Finally, the cointegration coefficients with both the panel and its units were estimated with the CCE (Common Corulated Effects Mean Group estimator) model. It has been determined that the total tax for both the panel and all parts has a positive and statistically consequential effect on economic growth. It has been determined throughout the panel that direct and collected taxes are also positive and statistically correct on economic growth. However, the lower tax office business has a relatively higher unit on economic growth of the taxes carried by larger transports than the direct tax businesses. Sevens in which the literature contribution will be presented with the study.