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Growth Maximizing Tax Rate for Uzbekistan

Author

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  • Bekzod ABDULLAEV
  • Laszlo KONYA

Abstract

Over the past two decades of transition from centrally planned economy to market economy Uzbekistan has experienced major structural changes. During this period the objectives of the tax policy were directed towards modernizing the tax system, increasing efficiency and reducing the tax burden on the economy. As a result, the tax revenue-to-GDP ratio decreased from 32.3 percent in 1992 to 22 percent in 2011. While in the early years of independence economic growth was negative, considerable economic expansion has been observed since 2000. In this paper, we investigate the relationship of economic growth and tax revenues in Uzbekistan using quarterly data from 1996 to 2011. The results suggest that the Uzbek government has reached growth maximizing tax rate by reducing tax burden on the economy and further tax cuts will be counterproductive. Moreover, tax policy reform should be directed to address intrinsic issues of the tax system as well as raising direct taxes and lowering indirect taxes.

Suggested Citation

  • Bekzod ABDULLAEV & Laszlo KONYA, 2014. "Growth Maximizing Tax Rate for Uzbekistan," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 59-72.
    • Handle: RePEc:eaa:aeinde:v:14:y:2014:i:1_5
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    References listed on IDEAS

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    Cited by:

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    2. Jeeban Amgain, 2017. "Estimating Optimal Level of Taxation for Growth Maximization in Asia," Applied Economics and Finance, Redfame publishing, vol. 4(3), pages 47-55, May.
    3. AMEDANOU, Yawovi M. Isaac, 2018. "Examen de l'optimalité de la performance fiscale dans les pays en développement : le cas de l’UEMOA [Review of the optimality of tax performance in developing countries: evidence from WAEMU]," MPRA Paper 89513, University Library of Munich, Germany.
    4. Huseynov, Nijat, 2017. "The Classification of Public Expenditure in Post-Soviet Union States and OECD Member Countries," Public Finance Quarterly, Corvinus University of Budapest, vol. 62(3), pages 380-400.
    5. AMEDANOU, Yawovi M. Isaac, 2019. "Taxation Optimale et Croissance Economique au Togo : une Evidence Empirique en Séries Temporelles [Optimal Taxation and Economic Growth in Togo: Empirical Investigation in Time Series]," MPRA Paper 92003, University Library of Munich, Germany.

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    More about this item

    Keywords

    tax burden; economic growth; optimal tax; Uzbekista.;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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