The pace of fiscal consolidations, fiscal sustainability, and welfare: An overlapping generations approach

Maebayashi, Noritaka

doi:10.1016/j.jmacro.2022.103485

Cited by 3 publications

(1 citation statement)

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“…Some of these studies contend that tax policies significantly and favourably affect the pace of output growth, whilst others have found an adverse relationship between the two variables. Using an overlapping generation's model with exogenous growth settings, [23] examined expenditure-and tax-based consolidations under the rule of reductions in debt-to-GDP ratios to the target level and the consequences of these consolidations on fiscal sustainability and welfare. According to the study, tax-based consolidation must proceed more quickly than expenditure-based consolidation in order to guarantee budgetary sustainability.…”

Section: Review Of the Literaturementioning

confidence: 99%

Taxation and the Challenge of Fiscal Sustainability in a Resource-Rich Developing Country: A Re-evaluation of the Nigerian Perspective

Olushola,

Lamin Beyai,

Anagbado

2023

Business, Management and Economics

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Taxation plays a pivotal role in the fiscal management and financing of the public sector by the government. This study is dedicated to a comprehensive exploration of taxation and its implications for fiscal sustainability, particularly in the context of a resource-rich developing nation, with a specific focus on Nigeria. In our investigation, we harnessed the power of the Autoregressive Distributed Lag (ARDL) model alongside other robust econometric tools such as the Augmented Dickey-Fuller unit root test and the ARDL bounds test of cointegration. The empirical findings of this study underscore the substantial influence of taxation on Nigeria’s economic growth over the entire period under consideration. While petroleum profit tax exhibited a dampening effect on economic growth, companies’ income tax and value-added tax contributed positively. Significantly, the impact of value-added tax on overall productivity eclipsed that of companies’ income tax. The recommendations emphasize strengthening tax collection institutions for better compliance. The government should also focus on establishing an efficient tax system that widens the tax base, which can be achieved by formalizing informal businesses. This approach is crucial for increasing tax revenues, enhancing fiscal sustainability, and restructuring Nigeria’s economy.

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Section: Review Of the Literaturementioning

confidence: 99%