Relationship between tax revenue and economic growth in Turkey: Cointegration analysis

Taxes are the most important sources of revenue that the government apply in order to fulfill public services and to intervene in economic and social life. If countries can use tax-financed public expenditures for community development, they can have positive outcomes on growth. However, besides the positive effects of taxes on the economy their negative effects can also be seen. It is suggested that the effects of different tax types on growth are also different. The increase in the capacity of goods and services produced is called economic growth. The economic growth of a country means that GDP per capita in the country is constantly increasing. At the same time, the economic growth has been regarded as one of the most important indicators of the increase in the level of economic and social welfare of countries. In this study, the taxes in Turkey (taxes from income, taxes from wealth, taxes on goods and services, taxes on foreign trade) are discussed in relation to economic growth. The relationship between tax revenues and economic growth has been evaluated in terms of tax types. In the last part of the study, the economic research was carried out using time series analysis. The stability of the variables was examined by unit root tests and the long term relationship between variables Coıntegration Analysis was investigated and the short-term relationship was investigated by Error Correction Model. As a result of analysis, long term and short term correlations were obtained between variables. Key words: Tax, Economic Growth, Coıntegration