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American visitors to Scandinavian countries are often puzzled by what they observe: despite large income redistribution through distortionary taxes and transfers, these are very high-income countries. They rank among the highest in the world in terms of income per capita, as well as most other economic and social outcomes. The economic and social success of Scandinavia poses important questions for economics and for those arguing against large redistribution based on its supposedly detrimental effect on economic growth and welfare. How can Scandinavian countries raise large amounts of tax revenue for redistribution and social insurance while maintaining some of the strongest economic outcomes in the world? Combining micro and macro evidence, this paper identifies three policies that can help explain this apparent anomaly: the coverage of third-party information reporting (ensuring a low level of tax evasion), the broadness of tax bases (ensuring a low level of tax avoidance), and the strong subsidization of goods that are complementary to working (ensuring a high level of labor force participation). The paper also presents descriptive evidence on a variety of social and cultural indicators that may help in explaining the economic and social success of Scandinavia.

The main objective of this study was to examine the asymmetric effect of resource tax revenues on non-resource ones in oil-rich countries, as most previous research on the subject has assumed a symmetric resource-non-resource tax revenue nexus. We employed linear ARDL model to analyze the short- and long-term effects and found a negative relationship between resource and non-resource tax revenues. Based on nonlinear ARDL model estimates, empirical results provide strong evidence for the asymmetric effect of resource tax revenues. In the long-run, positive shocks have negative impacts on non-resource tax revenues. Conversely, negative shocks were found to not lead to increased non-resource tax revenues. In addition, findings show that the short-term effects are stronger when resource tax revenues increase.

Cigarette prices in Japan are lower than those in most other high-income countries. A more striking fact is that cigarette tax revenues have been kept almost flat at just over two trillion JPY (Japanese yen; 18.2 billion US dollars) over more than three decades, despite steadily declining cigarette sales and seemingly weakening pressure from stakeholders with a vested interest in the tobacco industry. We attempted to examine trends and determinants of cigarette tax increases in Japan. In particular, we hypothesized that the Japanese finance ministry adjusts cigarette taxes to meet a revenue target. Under this hypothesis, we searched for the most plausible amount of the minimum target of tax revenue that corresponds to cigarette tax increases over the past 37 years (1985–2021) using public data on cigarette sales and taxes. The results revealed that two trillion JPY was the minimal revenue target that could plausibly explain the increase in cigarette tax. In addition, the timing and magnitude of cigarette tax increases have been successfully set to maintain stable tax revenues. A key determinant of cigarette tax increases in Japan has been hard revenue targets, rather than public health concerns.

This study investigates the impact of tax revenue on economic growth in the context of increasing trade openness in developing countries by using the data of 29 developing countries with accelerating economic growth during the period 2000-2020. This study further applies the Fixed Effect Model (FEM) and the Generalized Least Squares (GLS) estimation methods for panel data to test the proposed hypotheses. The research results show that tax revenue positively affects economic growth in general. Furthermore, we find that trade openness increases the positive relationship between tax revenue and economic growth but excessive trade openness reduces such a relationship. Our findings provide important implications for developing countries in the context of increasing tax revenue and trade openness.

This paper examines the revenue implications of trade deregulation in a panel of Pacific Island countries from 2010 to 2021. First, we undertake a cross-country analysis of tax revenue, trade, and tax structure. Secondly, we empirically analyze the effect of trade deregulation on trade tax and overall government tax revenue. We find that as the countries have become more deregulated over the decade, the trade tax revenues and direct income tax revenues have declined whereas domestic indirect tax revenues have increased. The empirical estimation reveals the potential Laffer effect for trade tax revenues with respect to trade openness. The effect of regional trade agreements also shows some support for trade tax revenues. Further, the external public debt has a significant positive effect on aggregate tax revenues, while foreign aid has been significant in explaining the decline in both aggregate tax revenues as well as trade tax revenues in the selected Pacific Island countries.

A key obstacle to fundamental tariff reform in many developing countries is the revenue loss that it ultimately implies. This paper establishes a simple and practicable strategy for realizing the efficiency gains from tariff reform without reducing public revenues, showing that for a small open economy, a cut in tariffs combined with a point-for-point increase in domestic consumption taxes increases both welfare and public revenues. Increasingly stringent conditions are required, however, to ensure unambiguously beneficial outcomes from this reform strategy when allowance is made for such important features as nontradeable goods, intermediate inputs, and imperfect competition.

We assess the COVID-19 pandemic’s implications for state government sales and income tax revenues. We estimate that the economic declines implied by recent forecasts from the Congressional Budget Office will lead to a shortfall of roughly $106 billion in states’ sales and income tax revenues for the third quarter of 2020 through the second quarter of 2021 (the 2021 fiscal year for most states). This is equivalent to 0.5 percent of gross domestic product and 11.5 percent of our pre-COVID sales and income tax projection. Additional tax shortfalls from the second quarter of 2020 (the final quarter of most states’ 2020 fiscal years) may amount to roughly $42 billion. We discuss how these revenue declines fit into several pieces of the broader economic context. These include other revenues (e.g., university tuition and fees) that are also at risk, as well as spending needs necessitated by the public health crisis itself. Further dimensions of context involve fiscal support enacted through several pieces of federal legislation.

This paper estimates the effect of profit shifting on corporate tax base erosion for the United States, using Bureau of Economic Analysis survey data on U.S. multinational corporations during 1983 to 2012. I find that profit shifting is likely costing the U.S. government between $77 billion and $111 billion in corporate tax revenue by 2012, and these revenue losses have increased substantially in recent years. The paper also extends this analysis to other countries, finding that corporate tax base erosion is likely a large problem in countries without low tax rates. The paper discusses suggested reforms.

The study examined the impact of Sustainable Tax Revenue and Expenditure on the achievement of Sustainable Development Goals in African countries using secondary data. The dataset was extracted from the World Development Indicators database. The large gap between developed and developing countries when comparing the probability of them achieving the SDGs was the main motivation behind this study. Data retrieved from 45 countries comprised of both African and developed countries for the period 2010–2020 was analyzed using the Generalized Method of Moments technique. The results revealed that the coefficients of grants received, various forms of taxes, and other revenue have a positive effect on economic growth but a negative effect on poverty and unemployment for African and developed countries. This finding suggests that improvements in tax revenue generation, grants and other revenue accumulation across different sources boost economic performance and the welfare of individuals in the analyzed countries. The outcome is an indication that accumulating more grants from different sources will help to achieve sustainable development, improve financial stability, contributes to the economic growth and development in these countries. This study can guide policymakers, governments, international institutions, revenue bodies such as SARS and other stakeholders in their various planning and other decision-making endeavors. Governments and other policymakers must ensure the efficient generation and sustainable utilization of revenue generated from taxes and other revenues to spur the growth and development of their countries. They should have Growth-Sustainability-Oriented Fiscal Adjustment Programs and Sustainable Government Expenditure that can help push and redirect governments to achieve the SDGs in Africa.

The study investigates the determinants of tax revenue in Zimbabwe using the ARDL approach for the period 1980 to 2022. This study aims to offer a thorough summary of the different factors that influence tax revenue within the framework of economic and social factors. The variables included in the analysis are GDP growth, the share of agriculture in GDP, private consumption expenditure, inflation, foreign direct investment, real interest rates, trade openness, shadow economy and population growth. The results indicate that private consumption expenditure and share of agriculture in GDP negatively and significantly impact tax revenue in the long run. GDP growth, inflation, foreign direct investment and real interest rates exhibit a positive but insignificant impact on tax revenue. Trade openness, shadow economy and population growth are negatively and insignificantly related to tax revenue. The short-run analysis indicates that lagged tax revenue, GDP growth, private consumption expenditure, inflation, and trade openness significantly impact tax revenue, while the share of agriculture in GDP and the shadow economy significantly hinder tax revenue. Real interest rates and population growth have positive but insignificant impacts on tax revenue. The study's findings provide valuable guidance to policymakers in formulating policies and strategies that enhance tax revenue collection and support the government's domestic resources mobilisation agenda by uncovering the relationships between tax revenue and its determinants. This research paper provides an in-depth analysis of the determinants of tax revenue in Zimbabwe from 1980 to 2022 using the Autoregressive Distributed Lag (ARDL) approach. By examining various economic and social factors, such as GDP growth, private consumption expenditure, the share of agriculture in GDP, inflation, foreign direct investment, and the shadow economy, the study uncovers both short-term and long-term relationships between these variables and tax revenue. The findings have significant implications for policymakers, offering valuable guidance on enhancing tax revenue collection and supporting Zimbabwe's domestic resource mobilisation agenda. The research offers crucial insights into the factors influencing Zimbabwe's tax revenue performance, which is vital for economic stability and government prosperity. By identifying both the positive and negative impacts of various economic and social factors on tax revenue, the study provides policymakers with a robust foundation for designing effective fiscal policies. The findings emphasise the need for targeted strategies to enhance tax compliance, broaden the tax base, and address challenges the shadow economy poses. Additionally, the research contributes to the broader understanding of tax revenue dynamics in developing countries, making it a valuable resource for economists, analysts, and policymakers working in similar contexts.