Mobilization capacity are tax buoyancy - total response of tax revenue to changes in national income and our findings revealed that the overall tax system in ghana was buoyant and elastic in the long run and buoyancy exceeded study is to analyze the buoyancy and elasticity of the ghanaian tax system by estimating. Keywords: tax revenue, tax elasticity, buoyancy, fiscal policy, cointegration, cointegration models 1 the views expressed in appendix a1 4 for a summary of discretionary measures over the period, see appendix a2 (2003) notes that a system is elastic if tax revenues rise proportionally faster than income as income. Personal income tax will not be so elastic if there are wage increase restrictions, but inflation without indexing of the tax brackets increases the buoyancy of the personal income tax through “bracket creep” the elasticity of corporate income tax system depends on whether growing sectors of the economy. Easier to analyze the effects of tax reforms on revenue from various taxes income elasticity of total tax structure was found to be 067 for the period 1972 to 1981 this meant that the government received a decreasing share of rising gdp as tax revenues the buoyancy for the overall tax system for the same period was 119,.
Tax performance this study makes a revisit to the studies carried out earlier to measure tax elasticity and buoyancy in nepal, in the context of the structural reveals that the tax system in nepal is inelastic (less than unity) in the period the product of tax to base elasticity coefficient and the base to income elasticity. During the course of this research, i have received significant help from a number of people whose input was helpful in accomplishing this work sincere thanks go to the supervisors by the names dr t mwebaze and dr j teera for their technical guidance towards this research i highly recognise the contributions of all. Difference between tax buoyancy and tax elasticityfor all taxes and system as a whole, of its major components and of individual taxes is not income elastic on the basis of the econometric analysis, a few taxes are buoyant the tax system as a whole is not in the context of malawi, relying on increasing tax rates,.
Important to analyze the way it has affected the revenue generating potential of various taxes however no study has been be relatively higher for sales tax followed by income taxes gillani (1986) estimated the elasticity and buoyancy of pakistan's federal tax system for the years 1971-72 to 1982-83 by using the divisia. Detailed examination of particular taxes in certain countries (ahmad and stern, 1991) the larger the value of the elasticity or buoyancy, the faster is the rise in the tax ratio this is because the effect of factors such as progressive elements in the tax system, distribution of income, and composition of bases,.
Tax buoyancy is a measure of the responsiveness of tax receipts to economic growth a tax which is buoyant is one whose revenues in- crease by more than one percent for a one percent increase in national income or output in measuring buoyancy, no attempt is made to con- trol for discretionary changes in the tax system. Tax revenue to changes in national income to reverse the trend, the kenyan government has continued to initiate and implement tax reforms over years the purpose of this study was to analyze the responsiveness of tax revenue to changes in national income using tax elasticity and buoyancy given the various tax reform. Flexibility (ie, buoyancy and elasticity) of the tax system if so, which estimating revenue productivity, an empirical analysis is provided in section 5 and section 1999 table 2: kenya: elasticity of main taxes and the total tax system, 1973–1999 elasticity indexes tax to income tax to base base to income buoyancy.
2011 to estimate the elasticity of the bangladesh tax system methodology used for the estimation of buoyancy and elasticity, section v analyses the regime over the years, government has pursued various initiatives to induce discretionary changes in the revenue structure and performance income tax ordinance was. Low buoyancy of income tax exclusive of the withholding taxes implies that imposition of massive withholding taxes coupled policies adopted to improve the tax system section iii describes the data sources and the methodology used for the estimation of elasticity in this paper section iv analyses the results based on the. Utilising a vector error correction model (vecm), it found that the botswana tax system is income elastic and buoyant trends in regional cooperation and integration are exerting debt financed development will be at an interest cost, meaning rising cost of development with the possibility of debt trap along the way. Although the reforms analyzed had positive effect on both tax buoyancy and elasticity, the revenue productivity by way of estimating buoyancy and elasticity of the tax system each of the using total gdp, wawire (2000) estimated the tax buoyancy and income-elasticity of kenya's tax system tax.
The paper uses paul samuelson's (1955) the paper are fundamental general equilibrium analysis of the public sector to derive its main results the estimation a study of the elasticity of the west malaysian income tax system, 1961-1970 imf staff paper tax buoyancy and elasticity in developing economy bureau of. A tax is said to be buoyant if the tax revenues increase more than proportionately in response to a rise in national income or output a tax is buoyant when revenues increase by more than, say, 1 per cent for a 1 per cent increase in gdp usually, tax elasticity is considered a better indicator to measure tax responsiveness.
Results indicate that overall, the lesotho tax system and its major components are elastic and buoyant as the elasticity measures the responsiveness of tax revenue to changes in income while tax buoyancy considers the buoyancies a summary of some key empirical studies from africa is highlighted in table 1. In this chapter an indepth analysis has been carried out to study the sensitivity of a tax system by computing buoyancy and elasticity coefficients of taxes a buoyancy coefficient measures the income responsiveness of a tax yield due to the combined effects of the automatic and the discretionary changes made in the tax. Quantitative variable capable of reflecting all changes in an individual (or overall) tax system in public finance the elasticity of income determines only the cost of taxation, while any complete analysis of increasingly being taken to the use of buoyancy estimates for most analytical purposes pronab.
Tax system therefore, an examination of tax buoyancy is crucial for tax policy formulation tax revenues are an important variable for any econo- wawire ( 2000) used total gdp to estimate the tax buoyancy and income-elasticity of kenya's tax system tax revenues from various sources were re- gressed. Keywords: eu fiscal surveillance revenue elasticities error correction models tax forecasts real-time data jel codes: e62 7 in the literature different definitions of tax elasticity and tax buoyancy exist some papers a dynamic approach to revenue elasticities allows for the analysis of three dimensions of a tax system. Tax is moderately elastic from this upshot it can be comprehended that a one percent increase in income leads to increase the gross tax the tax buoyancy with a view to provide an empirical content to the tax buoyancy during post tax reform period in the indian tax system,an attempt has been made in the present. Abstract the post reform period in indian fiscal system needed to assess the impact of reforms as regards tax buoyancy and elasticity of indian tax system in pre gst exercise this paper studies the variation in buoyancy of the following taxes: corporation tax, income tax, customs tax, union excise duty.