The analysis of the relationship between expenditure taxes and inflation in terms of vat: The case of Turkey

Along with inflation has different definitions in the economics literature, it is generally expressed as a continuous increase in the general level of prices.Inflation; It negatively affects many macroeconomic issues such as growth, economic stability, balance of payments and employment.Tax is the forced price that the state receives from the public and constitute a large part of the national income. Fiscal policy is one of the important policy tools in the fight against inflation. The most important and primary tool of fiscal policy is tax policies. Looking at the relationship between inflation and indirect (expenditure) taxes, it is seen that indirect taxes affect inflation and inflation affects indirect taxes. In this context, the aim of the study is to examine the relationship between taxes and inflation and to analyze it in terms of Value Added Tax. In the study, inflation and indirect tax data between 1994-2022 were examined and analyzed using Tamo Yamamoto Causality, Cusum Graph and ARDL test. As a result of the tests, a relationship was found between Value Added Tax, Producer Price Index and Consumer Price Index.