Tax Buoyancy in the Caribbean: Evidence from Heterogenous Panel Cointegration Models

Abstract

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The impact of tropical storms on tax revenue

“…The findings of our study arguably also suggest several policy implications for the Eastern Caribbean in the face of a damaging hurricane. Importantly, the region currently is faced with high public indebtedness and weak growth, a deterioration of the fiscal deficit (Khadan, 2019; Schipke et al, 2013; Schlotterbeck, 2017), and a tax system that accounts for more than four‐fifths of the total revenue (Schipke et al, 2013). Fiscal adjustment, in particular revenue mobilisation is therefore a main force shaping policies in these countries and is imperative for debt reduction.…”

“…In fact, the region is identified as the most disaster‐prone region in the world on account of the frequent number of hurricane strikes, where the damage is equivalent to more than 2% of the affected country's gross domestic product (GDP) and can be expected every two and a half years (Rasmussen, 2004). Secondly, there is limited fiscal capacity in these islands as tax revenue accounts for only about 20% of GDP, with a relatively small nontax revenue of about 1% to 2% of GDP (Khadan, 2019Schipke et al, 2013). The countries' high degree of openness also makes customs taxes an attractive but falling source of revenue.…”

Measuring and estimating tax elasticity in the Republic of Serbia

“…There are many studies that have examined tax elasticity in the world (Choudry 1979;Bruce et al 2004;Girouard and Andre, 2005;Cotton, 2012, Bunescu andComaniciu, 2013;Belinga et al 2014;Deli et al 2018;Khadan 2019). Bruce et al (2004) have investigated tax elasticity from 1967 to 2000 in the United States and results show that the elasticity for income taxes in the long-run is more than double that for sales taxes.…”

“…Tagkalakis (2015) estimated the elasticity of corporate income tax revenue to output gap in Greece from 1993 to 2013, where results have shown that elasticity is about 1.40 to 1.55. have revealed that personal income tax and corporate income tax are not significant for economic growth in Serbia, but value added tax has significant effect to to GDP from 2006 to 2015. Khadan (2019) has examined tax buoyancy for a twelve Caribbean countries over the period 1991-2017. Findings of this research implie ЕКОНОМИКА ©Друштво економиста "Економика" Ниш http://www.ekonomika.org.rs that direct taxes have higher coefficients of elasticity compared to indirect taxes.…”