The Effect of Confidence in the Economy on Tax Revenues in Türkiye

Authors : Ayşegül Han

Pages : 40-50

View : 72 | Download : 49

Publication Date : 2025-08-31

Article Type : Research Paper

Abstract :Economic confidence, reflecting individuals\\\' and firms\\\' economic expectations and perceptions of market conditions, plays a crucial role in economic activity by influencing decisions to consume, invest and save. The expansion or contraction of these activities indirectly affects the level of tax revenues. Objectives of the research to analyze the effect of economic confidence in terms of tax revenue in Türkiye during the period 2007:Q1-2024:Q1. The results of the Johansen cointegration analysis show that there is a long-run relationship between the economic confidence index, GDP, and tax revenues and that there are at least two cointegration vectors. The VECM estimates, changes in GDP smooth the error terms and stabilize the dynamics of the model, while changes in the business confidence index effectively explain the imbalances in the model. In particular, the negative coefficient on the error terms for the previous period (-0.757) indicates a substantial effect on the correction of past errors in the current period. Furthermore, the results of the Granger causality analysis show that changes in the economic confidence index have a unidirectional causal effect on the short-term tax revenue.
Keywords : Uzun Dönemli İlişki, Hata Düzeltme Modeli, Nedensellik İlişkisi, Ekonomik Güven, Vergi Gelirleri

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