Page 48 - Azerbaijan State University of Economics
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THE                      JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 2, 2023, pp. 47-59

                     TAX REVENUE AND ECONOMIC GROWTH IN RESOURCE-
                            RICH COUNTRY: EMPIRICAL EVIDENCE FROM
                                                   AZERBAIJAN

                                                     Javid Seyfullali

                    International Magistrate and Doctorate Centre, Economy and Technological Sciences
                    Department, UNEC. Baku, Azerbaijan
                    E-mail: cavid_seyfullali@unec.edu.az

                      Received: October 10; accepted December 20, 2023; published online December 25, 2023

                    ABSTRACT
                    The purpose of the article is to examine the relationship between taxes and economic
                    growth in Azerbaijan, which is rich in oil and gas reserves. The study covers the years
                    2005-2023.  The  growth  of  total  and  non-oil  GDP  is  included  in  the  model  as  a
                    dependent variable, and the volume of capital, tax revenues to the budget, changes in
                    oil  prices,  and  total  foreign  trade  are  included  as  independent  variable.  When
                    calculating quarterly indicators, inflation was taken into account and processed using
                    the ARDLBT model. It has become known that tax revenues in Azerbaijan have a
                    negative impact on the growth of both total and non-oil GDP in the long term. The
                    effects of other independent variables were statistically significant and positive. In the
                    short term, the impact of taxes on overall GDP has not been identified, but a negative
                    impact on the growth of non-oil GDP has been found. Among other indicators, only
                    changes in oil prices have a positive impact on overall GDP in the short term. These
                    results are consistent with modern theories. Limited data on revenues by tax type made
                    it impossible to assess the impact of various tax types on economic growth. The results
                    support the idea of pursuing a policy that reduces the tax burden of this sector in order
                    to increase non-oil GDP. A study of the impact of tax revenues on non-oil GDP growth
                    can provide substantiated arguments for making decisions on the distribution of the
                    tax burden to increase the weights of tax types that do not have a negative impact on
                    economic growth.

                    Keywords: Tax revenue, tax types, economic growth, non-oil GDP, oil and gas reserves.

                    JEL kod: E62, H21, O47








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