IMF Working Papers

How Buoyant is the Tax System? New Evidence from a Large Heterogeneous Panel

By Paolo Dudine, João Tovar Jalles

January 19, 2017

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Paolo Dudine, and João Tovar Jalles. How Buoyant is the Tax System? New Evidence from a Large Heterogeneous Panel, (USA: International Monetary Fund, 2017) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

In this paper we provide short- and long-run tax buoyancy estimates for 107 countries (distributed between advanced, emerging and low-income) for the period 1980–2014. By means of Fully-Modified OLS and (Pooled) Mean Group estimators, we find that: i) for advanced economies both long-run and short-run buoyancies are not different from one; ii) long run tax buoyancy exceeds one in the case of CIT for advanced economies, PIT and SSC in emerging markets, and TGS for low income countries, iii) in advanced countries (emerging market economies) CIT (CIT and TGS) buoyancy is larger during contractions than during times of economic expansions; iv) both trade openness and human capital increase buoyancy while inflation and output volatility decrease it.

Subject: Corporate income tax, Emerging and frontier financial markets, Financial markets, Inflation, Personal income tax, Prices, Revenue administration, Taxes

Keywords: Buoyancies help, Buoyancy coefficient, Buoyancy estimate, Corporate income tax, Emerging and frontier financial markets, Error correction model, Fiscal sustainability, Global, Inflation, Personal income tax, Pooled mean group, Recession, Short vs long run, Tax buoyancy, Tax category, Tax elasticity, Tax revenue, WP

Publication Details

  • Pages:

    33

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/004

  • Stock No:

    WPIEA2017004

  • ISBN:

    9781475569797

  • ISSN:

    1018-5941

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