The Impact of Indirect Taxes on Economic Growth

Keywords: VAT , excise , economic growth , var , Granger causality


  • Ana-Maria Uritescu, PhD student, Affiliation: Bucharest University of Economic Studies, Bucharest, Romania.
Pages:  27 : 35

This study analyzes the impact of indirect taxes on economic growth in Romania. Indirect taxes are represented by VAT and excise taxes. Annual data from 1993-1996 were used for the study. The data series consists of the weights of VAT in the GDP, the weights of excise duties in the GDP and the economic growth rate. The link between the three data series is tested by the autoregressive vector technique and the Granger-causality. The results of the model indicate that there is a long-term relationship between VAT, excise duty, and economic growth. The Granger test results show that the data series represented by the weight of VAT in GDP and the data series represented by the weight of excise duties in GDP cause Granger growth rate.

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