Dynamic modeling the impact of tax reforms on tax revenue: Evidence from Azerbaijan
Vol. 18, No 1, 2025
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Mirvari Gazanfarli
Department of Business Management, UNEC Business School, Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan gazanfarli.mirvari@unec.edu.az ORCID 0000-0002-4020-7466 |
Dynamic modeling the impact of tax reforms on tax revenue: Evidence from Azerbaijan |
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Zhelyo Zhelev
Department of Control and Analysis of Economic Activities, D.A. Tsenov Academy of Economics, Svishtov, Bulgaria zh.zhelev@uni-svishtov.bg ORCID 0000-0003-2715-8230
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Abstract. The objective of this study was to ascertain the impact that the implementation of tax reforms has had on tax revenue in Azerbaijan from 2000 to 2022. An Autoregressive Distributed Lag (ARDL) dynamic model was developed to investigate the linkages between tax revenue and tax reforms. Within the framework of developing a new assessment approach, main features of tax reforms were defined and their significance was determined. The analysis incorporated both quantitative and qualitative variables, in particular the influences of technological development and the application of automated systems. The research results demonstrate that the implementation of tax reforms had both short-run and long-run effects on tax revenue in Azerbaijan. Indeed, both qualitative and quantitative variables have been shown to play a crucial role in increasing tax revenues. The findings indicate that tax revenue was positively influenced by the increases in the tax burden rate, the total number of concessions and exemptions, and the application of an automatic tax information system and message service. Conversely, the growing number of tax legislative changes has had an adverse effect. These findings will be of use to the decision-makers responsible for the adoption of national legislation and the drafting of strategy documents. |
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Received: May, 2024 1st Revision: January, 2025 Accepted: March, 2025 |
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DOI: 10.14254/2071-8330.2025/18-1/6
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JEL Classification: C5, C54, C87, H2, P11 |
Keywords: tax policy, tax reforms, econometric modeling, ARDL model, diagnostic analysis |
