Tax Revenue Downturns: Anatomy and Links to Imports

June 1, 2010

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Format: Chicago

Kun Li, and Pablo Lopez Murphy. Tax Revenue Downturns: Anatomy and Links to Imports, (USA: International Monetary Fund, 2010) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

We study historical tax revenue downturn episodes—where tax revenue-to-GDP ratios decline sharply—and explore the link between tax revenues and imports. We document that downturn episodes of at least 1 percentage point of GDP in one year are common. The tax types that account for these episodes are different in advanced, emerging and developing, and oil producing countries. We find that tax revenue downturns and import contractions have a statistically significant link. Finally, we show that changes in imports are a statistically significant determinant of changes in tax revenues even when controlling for changes in the output gap and in the terms of trade.

Subject: Fiscal accounting and reporting, Government finance statistics, Imports, Income tax systems, Revenue administration

Keywords: Downturn, Ratio, Revenue-to-GDP, Tax revenue downturn, Tax-revenue-to-GDP ratio, WP

Publication Details

Pages:

23
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/138
Stock No:

WPIEA2010138
ISBN:

9781455201211
ISSN:

1018-5941

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