IDEAS home Printed from https://ideas.repec.org/p/euf/dispap/044.html
   My bibliography  Save this paper

Non-Tax Revenue in the European Union: A Source of Fiscal Risk?

Author

Listed:
  • Gilles Mourre
  • Adriana Reut

Abstract

This paper examines the characteristics of government non-tax revenue in the European Union. Nontax revenue includes a large number of diverse income sources, such as fees charged for the provision of public services, income from financial assets and government property, and EU funds. Receipts from sources other than taxes account for slightly more than one-tenth of total revenue, but the fiscal risk stemming from the volatility of non-tax revenue is three times higher than that from the volatility of tax revenue. We present measurements of volatility in non-tax receipts in the Member States that can help identify the uncertainty around annual projections of revenue. Panel data analysis is used to examine whether macroeconomic and fiscal variables can explain the differences in non-tax revenue among Members States. Government spending, tax receipts and the size of financial assets held by government are found to explain close to a third of the cross-sectional variation in non-tax revenue. Granger causality tests are used to examine the direction of causality across Member States between non-tax revenue, tax receipts, and government spending.

Suggested Citation

  • Gilles Mourre & Adriana Reut, 2017. "Non-Tax Revenue in the European Union: A Source of Fiscal Risk?," European Economy - Discussion Papers 044, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:dispap:044
    as

    Download full text from publisher

    File URL: https://economy-finance.ec.europa.eu/publications/non-tax-revenue-european-union-source-fiscal-risk_en
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hickey, Rónán & Smyth, Diarmaid, 2015. "The Financial Crisis in Ireland and Government Revenues," Quarterly Bulletin Articles, Central Bank of Ireland, pages 60-71, October.
    2. Gilles Mourre & Caterina Astarita & Anamaria Maftei, 2016. "Measuring the Uncertainty in Predicting Public Revenue," European Economy - Discussion Papers 039, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Hickey, Rónán & Smyth, Diarmaid, 2015. "Government revenues in Ireland since the financial crisis," Economic Letters 07/EL/15, Central Bank of Ireland.
    4. Morrison, Kevin M., 2009. "Oil, Nontax Revenue, and the Redistributional Foundations of Regime Stability," International Organization, Cambridge University Press, vol. 63(1), pages 107-138, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Valentin Marian ANTOHI & Monica Laura ZLATI, 2017. "The Impact of the Application of the Fiscal Risk Assessment Procedure in Romania," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 3, pages 78-86.
    2. Lu Wang & Pavel Rousek & Simona Hašková, 2021. "Laffer curve - a comparative study across the V4 (Visegrad) countries," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 9(2), pages 433-445, December.
    3. Kateryna Anufriieva & Svitlana Brus & Yevhen Bublyk & Yuliia Shapoval, 2021. "Ukrainian Financial System Development: The Path to EU," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 39-55.
    4. Volkan Yurdadog & Neslihan Coskun Karadag & Murat Albayrak & Oguzhan Bozatli, 2022. "Analysis of Non-tax Revenue: Evidence from the European Union," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(60), pages 485-485, April.
    5. Zhao, Renjie & Zhang, Jiakai, 2022. "Rent-tax substitution and its impact on firms: Evidence from housing purchase limits policy in China," Regional Science and Urban Economics, Elsevier, vol. 96(C).
    6. Neha Rajput & G. S. Bhalla, 2024. "Testing the Relationship Between Income and Expenditure of a Statutory Organization: Cointegration and Causality Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4338-4355, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Austin L. Wright, 2016. "Economic Shocks and Rebel," HiCN Working Papers 232, Households in Conflict Network.
    2. Joseph Wright, 2009. "How Foreign Aid Can Foster Democratization in Authoritarian Regimes," American Journal of Political Science, John Wiley & Sons, vol. 53(3), pages 552-571, July.
    3. van der Kamp, Denise & Lorentzen, Peter & Mattingly, Daniel, 2017. "Racing to the Bottom or to the Top? Decentralization, Revenue Pressures, and Governance Reform in China," World Development, Elsevier, vol. 95(C), pages 164-176.
    4. Haass, Felix & Ottmann, Martin, 2017. "Profits from Peace: The Political Economy of Power-Sharing and Corruption," World Development, Elsevier, vol. 99(C), pages 60-74.
    5. Martin Gassebner & Michael J. Lamla & James Raymond Vreeland, 2013. "Extreme Bounds of Democracy," Journal of Conflict Resolution, Peace Science Society (International), vol. 57(2), pages 171-197, April.
    6. Jacqueline H.R. DeMeritt & Joseph K Young, 2013. "A political economy of human rights: Oil, natural gas, and state incentives to repress1," Conflict Management and Peace Science, Peace Science Society (International), vol. 30(2), pages 99-120, April.
    7. Parviz Dabir-Alai & Abbas Valadkhani, 2016. "Foreign aid, economic outcomes, and happiness," International Journal of Happiness and Development, Inderscience Enterprises Ltd, vol. 3(2), pages 97-107.
    8. Maldonado, Stanislao, 2014. "The Non-Monotonic Political Effects of Resource Booms," MPRA Paper 85649, University Library of Munich, Germany, revised 18 Dec 2017.
    9. Christian von Haldenwang & Maksym Ivanyna, 2017. "Does the political resource curse affect public finance?: The vulnerability of tax revenue in resource-rich countries," WIDER Working Paper Series wp-2017-7, World Institute for Development Economic Research (UNU-WIDER).
    10. Prichard, Wilson & Salardi, Paola & Segal, Paul, 2018. "Taxation, non-tax revenue and democracy: New evidence using new cross-country data," World Development, Elsevier, vol. 109(C), pages 295-312.
    11. Tripp, Aili Mari, 2012. "Donor Assistance and Political Reform in Tanzania," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    12. Altincekic, Ceren & Bearce, David H., 2014. "Why there Should be No Political Foreign Aid Curse," World Development, Elsevier, vol. 64(C), pages 18-32.
    13. Fenja Søndergaard Møller, 2019. "Blue blood or true blood: Why are levels of intrastate armed conflict so low in Middle Eastern monarchies?," Conflict Management and Peace Science, Peace Science Society (International), vol. 36(5), pages 517-544, September.
    14. Muhanji, Stella & Ojah, Kalu & Soumaré, Issouf, 2019. "How do natural resource endowment and institutional quality influence the nexus between external indebtedness and welfare in Africa?," Economic Systems, Elsevier, vol. 43(1), pages 77-98.
    15. Benjamin Smith, 2017. "Resource wealth as rent leverage: Rethinking the oil–stability nexus," Conflict Management and Peace Science, Peace Science Society (International), vol. 34(6), pages 597-617, November.
    16. Carreri, Maria, 2016. "Do Natural Resources Influence Who Comes to Power, and How?," CEPR Discussion Papers 11136, C.E.P.R. Discussion Papers.
    17. Ishak Phoebe W., 2019. "Autocratic Survival Strategies: Does Oil Make a Difference?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 25(2), pages 1-22, May.
    18. Maekawa, Wakako, 2024. "United Nations peacekeeping operations and multilateral foreign aid: Credibility of good governance," World Development, Elsevier, vol. 176(C).
    19. Kim, Dong-Hyeon & Wu, Yi-Chen & Lin, Shu-Chin, 2018. "Heterogeneity in the effects of government size and governance on economic growth," Economic Modelling, Elsevier, vol. 68(C), pages 205-216.
    20. Volkan Yurdadog & Neslihan Coskun Karadag & Murat Albayrak & Oguzhan Bozatli, 2022. "Analysis of Non-tax Revenue: Evidence from the European Union," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 24(60), pages 485-485, April.

    More about this item

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:euf:dispap:044. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ECFIN INFO (email available below). General contact details of provider: https://edirc.repec.org/data/dg2ecbe.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.