Empowering Equity: The Impact of Tax Policies on Inclusive Growth in Turkey

Yıl 2025, , 55 - 72, 04.02.2025

Sevda Akar

https://doi.org/10.21121/eab.20250104

Öz

This study uses the ARDL model to analyze whether the general tax structure affects inclusive growth in Turkey by investigating the 2006:1–2021:4 periods offering growth-friendly and inclusive tax policy reform proposals for Turkey. The Turkish economy is a notably fragile economy that is significantly affected by global shocks. Especially in recent years, the Turkish Lira has experienced a period of stable depreciation against other currencies, adversely affecting macroeconomic indicators such as inflation and economic confidence. Tax revenues are a basic building block in financing public expenditures. Turkey receives significantly lower tax revenues than most OECD countries; its tax structure is mainly based on consumption taxes and personal income tax and corporate tax are largely inadequate. Although this situation increases Turkey’s economic growth, it also greatly deteriorates inequality in income distribution. The results of this study suggest that, in Turkey, property tax is more effective in promoting inclusive growth. However, Turkey’s tax system is insufficient in terms of access to opportunities to allow Turkish society to benefit from economic growth. To foster inclusive growth in Turkey, it is strongly recommended that a thorough redesign of the tax structure be undertaken, aimed at ensuring equitable opportunities for the entire society.

Anahtar Kelimeler

Tax Policy, Taxation, Progressivity, Inclusive Growth, Turkey

Etik Beyan

The paper raises no ethical issues.

Destekleyen Kurum

No funds, grants, or other support was received.

Kaynakça

• Abdel-Kader, K., Mooij, R. (2020). Tax Policy and Inclusive Growth. IMF Working Papers, WP/20/271: 1-38. https:// www.imf.org/en/Publications/WP/Issues/2020/12/04/ Tax-Policy-and-Inclusive-Growth-49902.
• Abdon, A., Estrada G., Lee, M., Park, D. (2014). Fiscal Policy and Growth in Developing Asia. ADB Economics Working Paper Series. No. 412. Manila: Asian Development Bank. https://www.adb.org/sites/ default/files/publication/110986/ewp-412.pdf.
• Acosta-Ormaechea, S., Morozumi, A. (2021). The Value Added Tax and Growth: Design Matters. International Tax and Public Finance. https://doi.org/10.1007/ s10797-021-09681-2.
• Acosta-Ormaechea, S., Pienknagura, S., Pizzinelli, C. (2022). Tax Policy for Inclusive Growth in Latin America and the Caribbean. IMF Working Paper, WP/22/8: 1-40. https://www.imf.org/en/Publications/WP/ Issues/2022/01/21/Tax-Policy-for-Inclusive-Growth-in-Latin-America-and-the-Caribbean-511829.
• Ali, I., Zhuang, J. (2007). Inclusive Growth toward a Prosperous Asia: Policy Implications, ERD Working Paper Series, No. 97, Asian Development Bank (ADB). https://hdl.handle.net/11540/1858
• Arnold, J.M., Brys, B., Heady, C., Johansson, A., Schwellnus, C., Vartia, L. (2011). Tax Policy for Economic Recovery and Growth. Economic Journal, 121(550): 59-80. https://doi.org/10.1111/j.1468-0297.2010.02415.x
• Bastagli, F., Coady, D., Gupta, S. (2012). Income Inequality and Fiscal Policy. IMF Staff Discussion Note. No. SDN/12/08. Washington, DC: International Monetary Fund. https://www.imf.org/external/pubs/ft/ sdn/2012/sdn1208.pdf
• Besley, T., Persson, T. (2014). Why Do Developing Countries Tax So Little?. Journal of Economic Perspectives, 28(4) : 99-120. http://dx.doi.org/10.1257/jep.28.4.99
• Bloch, D., Fournier, JM., Gonçalves, D., Pina, A. (2016). Trends in Public Finance: Insights from A New Detailed Dataset. Economics Department Working Papers, No. 1345: 1-53. https://www.oecd-ilibrary.org/economics/ trends-in-public-finance_4d3d8b25-en
• Brys, B., Perret, S., Thomas, A., O’Reilly, P. (2016). Tax Design for Inclusive Economic Growth. OECD Taxation Working Papers, No. 26: 1-67. https://dx.doi. org/10.1787/5jlv74ggk0g7-en
• Cerra, V., (2022). An Inclusive Growth Framework. In How to Achieve Inclusive Growth, Valerie Cerra, Barry Eichengreen, Asmaa El-Ganainy, Martin Schindler (Ed.), Oxford University Press, 1-31.
• Chenery, H. B. (1960). Pattern of Industrial Growth. American Economic Review, 50 (4): 624-654. https:// www.jstor.org/stable/1812463
• Claus, I., Martinez-Vasquez, J., Vulovic, V. (2014). Government Fiscal Policies and Redistribution in Asian Countries. In R. Kanbur, C. Rhee, and J. Zhuang, eds. Inequality in Asia and the Pacific: Trends, Drivers, and Policy Implications. London and New York: Routledge and Manila: Asian Development Bank.
• Commission on Growth and Development (2008). The Growth Report Strategies for Sustained Growth and Inclusive Development. The International Bank for Reconstruction and Development / The World Bank, No: 44986: 1-198.
• Engle, R. F., Granger, C. W. J. (1987). Cointegration and error correction: representation, estimation and testing. Econometrica, 55: 251–276. https://doi. org/10.2307/1913236
• Estrada, G. Lee, S., Park, D. (2014). Fiscal Policy For Inclusive Growth: An Overview. ADB Economics Working Paper Series. No.423: 1-31. https://www.adb.org/sites/ default/files/publication/150415/ewp-423.pdf
• Gemmell, N., Kneller, R., Sanz, I. (2011). The Timing and Persistence of Fiscal Policy Impacts on Growth: Evidence from OECD Countries. Economic Journal, 121(550): 33-58. https://doi.org/10.1111/j.1468- 0297.2010.02414.x
• Hagemann, R. (2018). Tax Policies for Inclusive Growth: Prescription versus Practice. OECD Economic Policy Paper, No. 24: 1-47. https://doi.org/10.1787/2226583X
• Heshmati, A., Kim, J., Wood, J. (2019). A Survey of Inclusive Growth Policy. Economies 7(65): 1-18. http://dx.doi. org/10.3390/economies7030065
• Ianchovichina, E., Gable, L.S. (2012). What Is Inclusive Growth. In Commodity Price Volatility and Inclusive Growth in Low-Income Countries. Rabah Arezki; Catherine A Pattillo; Marc G Quintyn; Min Zhu (Ed.). Imf Publications. https://www.imf.org/en/Publications/Books/ Issues/2016/12/31/Commodity-Price-Volatility-and- Inclusive-Growth-in-Low-Income-Countries-2571870.
• Ianchovichina, E., Lundstrom, S., (2009). Inclusive Growth Analytics: Framework and Application. IMF Policy Research Working Paper, No: 4851: 1-42. https://doi. org/10.1596/1813-9450-4851
• IMF (2015). Fiscal Policy And Long-Term Growth. IMF Policy Paper, 1-256. https://www.imf.org/external/ np/pp/eng/2015/042015.pdf
• Kongsamut, P., Rebelo, S., Xie, D. (2001). Beyond Balanced Growth. The Review of Economic Studies, 68(4): 869- 882. https://www.jstor.org/stable/2695912
• Kuznets, S. (1957). Quantitative Aspect of the Economic Growth of Nations; II. Economic Development and Cultural Change, 5 (4): 3-111. http://www.jstor.org/stable/1152605
• Mah, J. S. (2000). An empirical examination of the disaggregated ımport demand of Korea - The case of information technology products. Journal of Asian Economics, 11: 237-244. https://doi.org/10.1016/ S1049-0078(00)00053-1
• Mankiw, G. N. (2007). Macroeconomics. Worth Publishers, Newy York. Çeviri: Ömer Faruk Çolak (Ed.). (2010) Makroekonomi, Efil Yayınevi, Ankara.
• McKinley, T., (2010). Inclusive Growth Criteria and Indicators: An Inclusive Growth Index for Diagnosis of Country Progress. ADB Sustainable Development Working Paper Series. No. 14: 1-44. https://www. adb.org/sites/default/files/publication/28493/adb-wp14-inclusive-growth-criteria.pdf
• Mendoza, E., Milesi-Ferretti, G.-M., Asea, P. (1997). On the Ineffectiveness of Tax Policy in Altering Long-Run Growth: Harberger’s Superneutrality Conjecture. Journal of Public Economics, 66(1): 99-126. https://doi. org/10.1016/S0047-2727(97)00011-X
• Mobolaji, H., Ehigiamusoe, U.K., Lean, H.H. (2015). Role of Fiscal Policy in Inclusive Growth in Nigeria. Nigerian Journal of Economic and Social Studies. 57(2): 253-275.
• Mooij, R., Fenochietto, R., Hebous, S., Leduc, S., Osorio- Buitron, C. (2020). Tax Policy for Inclusive Growth after the Pandemic. IMF Fiscal Affairs: Special Series on Covid-19, 1-14. https://www.imf.org
• Munir, F., Ullah, S. (2018). Inclusive Growth in Pakistan: Measurement and Determinants. The Pakistan Journal of Social Issues, Special Issue (June 2018): 150-162. https://uog.edu.pk/downloads/journal/14_ Inclusive_Growth_in_Pakistan_Measurement_and_ Determinants_150-162.pdf
• Musgrave, R.A. (1959). The Theory of Public Finance: A Study in Public Economy. McGraw-Hill, New York.
• Narayan, P. K., Smyth, R. (2006). What Determines Migration Flows From Low-Income To High-Income Countries? An Empirical Investigation Of Fiji-US Migration 1972-2001. Contemporary Economic Policy, 24(2): 332-342. https://doi.org/10.1093/cep/ byj019.
• O’Reilly, P. (2018). Tax policies for inclusive growth in a changing world. OECD Taxation Working Papers No. 40, https://dx.doi.org/10.1787/1fdafe21-en.
• OECD (2014). Report On The OECD Framework For: Inclusive Growth. Meeting Of the OECD Council at Ministerial Level, Paris 6-7 May 2014. www.oecd.org/ publishing/corrigenda.
• OECD (2022).Taxation. https://stats.oecd.org/
• OECD/KIPF (2014). The Distributional Effects of Consumption Taxes in OECD Countries. OECD Publishing, Paris. http://dx.doi. org/10.1787/9789264224520-en.
• Oyinlola, A. M., Adedeji, A. A., Bolarinwa, O. M., Olabisi, N., (2020). Governance, domestic resource mobilization, and inclusive growth in sub-Saharan Africa. Economic Analysis and Policy 65: 68–88. https://doi.org/10.1016/j.eap.2019.11.006.
• Pasha, A. H. (2014). Progressive Fiscal Policy for Inclusive Growth. Friedrich Ebert Stiftung, Economy of Tomorrow. 1-114. https://library.fes.de/pdf-files/ bueros/pakistan/11045.pdf. Pesaran, M.S., Shin, Y., Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Econometrics, 16(3): 289-326. https://doi.org/10.1002/jae.616.
• Sajid, S., Ali, A. (2018). Inclusive Growth and Macroeconomic Situat ions in South Asia: An Empirical Analysis. Bulletin of Business and Economics, 7(3): 97-109. https://mpra.ub.uni-muenchen.de/90661/.
• SBB, (2022b). 2022 2nd Quarter Growth Data Announced. https://www.sbb.gov.tr/2022-yili-2- ceyrek-buyume-verileri/#prettyPhoto (23.12.2022).
• SBB, (2022). The Medium-Term Programmes. https:// www.sbb.gov. t r / o r t a -va d e l i - p rogramlar/ (23.12.2022)71 . Solow, R. (1956). A Contribution to the Theory of Economic Growth. Quarterly Journal Economics, 70(1): 65-94. https://doi.org/10.2307/1884513.
• Stiglitz, J. E. (2016). An agenda for sustainable and inclusive growth foremerging markets. Journal of Policy Modeling 38: 693–710. http://dx.doi. org/10.1016/j.jpolmod.2016.05.012.
• Swan, T.W. (1956). Economic Growth And Capital Accumulation. Economic Record, 32(2): 334-361. https://doi.org/10.1111/j.1475-4932.1956.tb00434.x
• Tanzi, V., Zee, H. (1997). Fiscal Policy and Long-Run Growth. IMF Staff Papers 44: 179–209, Washington, DC. https://doi.org/10.2307/3867542. TCMB, (2022). Electronic Data Delivery System, https:// evds2.tcmb.gov.tr/.
• TUIK, (2022), Income, Living, Consumption and Poverty and National Account, https://www.tuik.gov.tr/ (23.12.2022).
• Ünsal, E. M. (2007). Makro İktisat. İmaj Yayınevi, Ankara.
• Zouhar, Y., Jellema, J., Lustig, N., Trabelsi, M. (2021). Public Expenditure and Inclusive Growth - A Survey. IMF Working Papers 2021/083, International Monetary Fund. http://repec.tulane.edu/RePEc/ceq/ceq109. Pdf.