Investigating the Effect of Effectiveness of Markets on Tax Revenue of Government: A case study of selected developing countries

Abstract

Tax is the most stable source of financing for the government and also one of the tools at the disposal of the government to achieve the three goals of distribution, allocation and stabilization. In this regard, with the aim of identifying factors affecting tax revenue, the present research has examined the effect of the efficiency of goods, labor and financial markets on the tax revenue of 28 selected efficiency-oriented countries, Including Iran, during the period 2010-2018. The results of the estimation of the research model with the panel data approach and the generalized dynamic moments (GMM) method, show that improving the efficiency of the mentioned three markets has a positive and significant effect on the tax revenue, in the selected countries. Of course, the estimated efficiency coefficient of the financial market is larger than the coefficients of the other two markets. Also, the influence of corruption control variables and information and communication technology on tax revenue is positive and significant. also, the inflation rate on tax revenue is negative and significant.

Keywords: Tax Revenues, Good Markets Efficiency, Labor Markets Efficiency, Financial Markets Efficiency.