Economics

Is taxation a curse or a blessing? The case of Turkiye

H. Kazak, T. E. Çiftçi, et al.

This intriguing study by Hasan Kazak, Taha Emre Çiftçi, Ahmet Tayfur Akcan, and Ebru Özer Topaloğlu explores how direct and indirect taxes affect economic growth in Turkiye. The research, using advanced statistical methods, reveals a surprising negative impact of direct taxes on growth, highlighting implications for developing countries' fiscal policies.

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Playback language: English

Index

Abstract

This study investigates the impact of direct and indirect taxes on economic growth in Turkiye using quarterly data from 1998/Q1 to 2023/Q2. Employing Prais-Winsten and Cumulative Fourier-frequency Toda & Yamamoto Test methods, along with Wavelet Transform Coherence (WTC) analysis, the findings reveal a negative impact of direct taxes on economic growth, supporting the "tax curse" hypothesis for this tax type. Conversely, indirect taxes show no such negative effect. The study highlights the detrimental, albeit temporary, impact of direct taxes on economies experiencing rapid growth, offering crucial insights for developing countries' fiscal policy formulation.

Publisher

Humanities & Social Sciences Communications

Published On

Oct 27, 2024

Authors

Hasan Kazak, Taha Emre Çiftçi, Ahmet Tayfur Akcan, Ebru Özer Topaloğlu

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