EFFECTS OF TAX CHANGE REGIME ON THE ECONOMIC GROWTH OF THE REPUBLIC OF NORTH MACEDONIA
Research Article
EFFECTS OF TAX CHANGE REGIME ON THE ECONOMIC GROWTH OF THE REPUBLIC OF NORTH MACEDONIA
ABSTRACT
This paper tries to determine the impact of the change of tax regime in Republic of Macedonia, where from being a progressive tax rate until 2006 it became flat tax for the time period 2007 - 2017. In order to analyze such effects on economic growth of the Republic of North Macedonia for the time period 2000 – 2017, quarterly time series of real GDP growth rate, Direct tax divided into Personal Income Tax and Corporate Income Tax and a dummy variable regarding the time period of the change has been employed. One of the main justifications for changing the tax regime from progressive to flat, was that this change will reflect in the improvement of the employment, thus will reduce the unemployment rate. Moreover, the main objective is to investigate how the tax regime change has affected the economic growth in Republic of Macedonia, analyzing the two different time periods, first when was applicable progressive tax rate from 2000 – 2006, and then the second time period 2007-2017, when was applicable flat tax rate, by applying the VAR model and by creating a dummy variable indicating the period t > 2007q1. The results imply that the effect of the change of the tax regime is insignificant and inefficient for the case of the Republic of North Macedonia.
ALILI, A.,
&
ALILI SULEJMANI 1, L.,
&
LOKCE, A.,
(2020). EFFECTS OF TAX CHANGE REGIME ON THE ECONOMIC GROWTH OF THE REPUBLIC OF NORTH MACEDONIA. Trends in Economics, Finance, and Management Journal, 2(2), 11-16. Arrival Date Posted By:https://tefmj.ibupress.com/articles/effects-of-tax-change-regime-on-the-economic-growth-of-the-republic-of-north-macedonia
