Tax burden, inflation and economic growth: 1990-2022 Türkiye experience

The term tax burden has various meanings in the literature. In the study conducted, the term tax burden refers to the total tax burden. When calculating the tax burden, the revenues obtained by the public are proportional to the gross domestic product. It is possible to calculate the tax burden with two different methods. In the first of the calculation methods, only tax revenues are used in the calculation, while in the second of the calculation methods, in addition to tax revenues, tax-like revenues are also used in the calculation. The effect of the tax burden on economic growth rates also has a large share in the steps to be taken by decision-making bodies in the economy. Countries mostly try to direct capital investments in the global economic system to themselves with the policies related to tax incentives they implement. For this reason, other countries also make decisions in this direction. Continuous increases in the general level of prices and therefore the depreciation of the domestic currency are called inflation. The macroeconomic variable of inflation is one of the basic elements that determine the economic stability and sustainable development processes of countries. How inflation shapes economic growth is of great importance in terms of price stability and the investment environment. In this study, VAR (Vector Autoregression) model was used to investigate the relationship between tax burden and inflation and economic growth. While creating the model, ADF (Augmented Dickey-Fuller) and PP (Phillips-Perron) unit root tests were used to measure the stationarity levels of the variables. After testing whether there was a unit root as a result of the tests, Granger causality analysis was applied to determine the causality between the variables and impulse-response analysis was applied to examine the effects. The results showed that tax policies interact with inflation rates and have positive effects on economic growth rates. In addition, in order to achieve sustainable growth rates in the economic system, tax burden rates and data showing price stability must have a balanced distribution.