Does the Tax Structure Play a Role in Economic Growth? Empirical Evidence from Indonesia

Nadila Natasya, Muhammad Nasir

Abstract


Abstract. Economic growth is important indicator of economic development. One of incentives to increase economic growth comes from taxes. Taxes are the easiest thing to get and do by the government. This paper aims to examine how tax structure affects Indonesian economic growth. Tax structure variables are income tax, goods and services taxes, and customs tax. This study uses a multiple linier regression based on data from period of 1994 to 2018. The results of study shows that income tax and customs tax had significant negative effect on Indonesian economic growth. Meanwhile, the goods and services tax have a significant positive effect on Indonesian economic growth. Referring to these results, it is recommended that the Indonesian government should consider not to increase income tax and customs tax because they have the impact on public consumption and cost of domestic production.

Keywords


Tax Structure, Income Tax, Goods and Services Tax, Customs Tax, Economic Growth.

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References


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DOI: https://doi.org/10.29313/mimbar.v0i0.9090

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