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Tax structure and economic growth: empirical evidence from Bulgaria

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  • Stoyan Tanchev

Abstract

The study analyses the tax structure of Bulgaria and its relation to economic growth for the period 2003 – 2015. The results reveal that Bulgarian budget revenue mainly depends on the taxes charged on consumption. It was found that in times of economic growth tax and non-tax revenues form the necessary fiscal resources in the budget while during a crisis the revenues are insufficient, which in turn leads to the formation of a budget deficit and a subsequent increase in government debt. There are statistical arguments in support of the notion that budget revenues are inversely related to economic growth and create conditions for its reduction. Government spending has a direct proportional relation to growth and results in its increase. The econometric estimates and the interpretation of the results are calculated with the use of a multiple linear regression with an included dummy variable (OLS with a dummy variable), the Two-Stage Least Squares method (TSLS) and the Vector Autoregressive model (VAR models).

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  • Stoyan Tanchev, 2019. "Tax structure and economic growth: empirical evidence from Bulgaria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 24-41,42-58.
    • Handle: RePEc:bas:econth:y:2019:i:5:p:24-41,42-58
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    References listed on IDEAS

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    2. Audi, Marc & Ali, Amjad & Roussel, Yannick, 2021. "Measuring the Tax Buoyancy: Empirics from South Asian Association for Regional Cooperation (SAARC)," MPRA Paper 109567, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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