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Impact of Taxation on Price Formation in Agricultural Markets: Example from Antalya Greenhouse Production

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  • C. Sayin
  • Rahmiye Ceylan
  • Makbul Yelboga
  • Meral Ozalp
  • Eda Ilbasmis
  • Oya Sav

Abstract

Taxation of economic activities is inevitable for formation and maintenance of national budgets. However, the level and payment structure of the taxes and reactions of taxpayers should be considered carefully in the scope of proper management of the taxation system. Agriculture, being the first taxed sector, provides limited insight for assessment of taxation systems. With the field survey conducted with 281 glass and plastic house producers from Antalya, Turkey, it was aimed to understand the impacts of taxes payed on the profitability of farm enterprises as well as main socio-demographic factors. It was found that the enterprises, 76% of which are taxed on real income, achieved to produce 7.190,73 TL (2.463,25 USD) profit per 1.000 m2. Following calculation of the profit level, it was intended to analyse the factors effecting profit inefficiencies of the farm enterprises.Accordingly, stochastic profit frontier was estimated with the data retrieved and it was concluded that both the direct income tax and indirect value-added tax could be used as policy tools to increase profitability and attain sustainability of greenhouse production sector, which is a dominant sector in the Mediterranean region of Turkey. That’s why both tax indicators seemed to be in negative relation with the profit level and there is a possibility to reduce the inefficiency specifically with a VAT revision for the inputs.

Suggested Citation

  • C. Sayin & Rahmiye Ceylan & Makbul Yelboga & Meral Ozalp & Eda Ilbasmis & Oya Sav, 2017. "Impact of Taxation on Price Formation in Agricultural Markets: Example from Antalya Greenhouse Production," Journal of Agricultural Science, Canadian Center of Science and Education, vol. 9(6), pages 120-120, May.
    • Handle: RePEc:ibn:jasjnl:v:9:y:2017:i:6:p:120
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    References listed on IDEAS

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    1. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521265638, September.
    2. Casamatta, Georges & Rausser, Gordon & Simon, Leo, 2011. "Optimal taxation with joint production of agriculture and rural amenities," Resource and Energy Economics, Elsevier, vol. 33(3), pages 544-553, September.
    3. Chunping Zhong & Calum Turvey & Juan Zhang & Changsheng Xu, 2011. "Does taxation have real effects on agricultural output? Theory and empirical evidence from China," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 14(3), pages 227-242.
    4. Chunping Zhong & Calum Turvey & Juan Zhang & Changsheng Xu, 2011. "Does taxation have real effects on agricultural output? Theory and empirical evidence from China," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 14(3), pages 227-242, September.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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