What impacts the value of revenues from taxation of income of corporations? Evidence from European Union Member States
| May 02, 2023
About this article
Published Online: May 02, 2023
Page range: 30 - 53
DOI: https://doi.org/10.2478/wrlae-2022-0003
Keywords
© 2022 Andrzej Karpowicz, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.
Figure 1:
Dependent variables used in the model
| Diagnostic variables | Description |
|---|---|
| Taxation of income (TAX) | |
| Statutory top personal income tax rates (PIT) | Top statutory personal income tax rates (including surcharges) |
| Statutory top corporate income tax rates (CIT) | Top statutory tax rate on corporate income |
| General economy (ECON) | |
| Harmonised Index of Consumer Prices (HICP) | It measures the change over time in the prices of consumer goods and services acquired, used or paid for by EU households |
| GDP growth (GDP) | Annual growth of GDP |
| Estimated share of shadow economy to total GDP (SoS) | Market-based production of goods and services, whether legal or illegal, that escapes detection in the official estimates of GDP |
| Internationalisation (INTER) | |
| KOF Globalisation Index by ETH Zurich (KOF) | The KOF Globalisation Index measures the economic, social, and political dimensions of globalisation |
| Business (BA) | |
| Financial activities (FA) | Value of financial and insurance activities |
| R&D expenditures (R&D) | R&D expenditures in business sector |
| Population (POP) | |
| Employment (EMPL) | Total employment according to national concept |
| Total population (TPOP) | Total population in the analysed countries |
| Age dependency (ADEP) | Age dependency ratio, (population 0 to 19 years and 65 years or over to population 20 to 64 years) |
| Unemployment rate (UNEM) | The share of unemployed persons in the economically active population |
| Tertiary education (TER) | The educational level following the completion of secondary education |
| Active population (APOP) | Active population of 15 years and over |
| Gini coefficient (GINI) | A measure of statistical dispersion intended to represent the income inequality or wealth inequality within a nation or any other group of people |
| Government finance (GOV) | |
| Government debt (DEBT) | General government debt |
Estimations’ results - Model I Model 1: Fixed-effects, using 702 observations Included 27 cross-sectional units Time-series length = 26 Dependent variable: CITrevenues
| const | −9446.37 | 7256.80 | −1.302 | 0.1935 | |
| CIT | 195.077 | 30.6151 | 6.372 | <0.0001 | *** |
| PIT | −4.23076 | 23.6528 | −0.1789 | 0.8581 | |
| HICP | −12.7697 | 19.9956 | −0.6386 | 0.5233 | |
| GDP | 0.0272787 | 0.00367193 | 7.429 | <0.0001 | *** |
| SoS | 40.6442 | 64.4585 | 0.6305 | 0.5286 | |
| KOF | 121.718 | 42.3527 | 2.874 | 0.0042 | *** |
| FA | −0.0768516 | 0.0375220 | −2.048 | 0.0409 | ** |
| R&D | 0.206338 | 0.104559 | 1.973 | 0.0489 | ** |
| EMPL | 1.65395 | 0.435037 | 3.802 | 0.0002 | *** |
| TPOP | −0.237152 | 0.327177 | −0.7248 | 0.4688 | |
| ADEP | −58.5603 | 39.6073 | −1.479 | 0.1397 | |
| TER | 49.1665 | 26.5882 | 1.849 | 0.0649 | * |
| APOP | −1.10486 | 0.470759 | −2.347 | 0.0192 | ** |
| UNEM | 54.6615 | 55.1328 | 0.9915 | 0.3218 | |
| GINI | −59.0205 | 64.0688 | −0.9212 | 0.3573 | |
| DEBT | −38.3517 | 10.0779 | −3.806 | 0.0002 | *** |
Estimations’ results - Model II Model 2: Fixed-effects, using 702 observations Included 27 cross-sectional units Time-series length = 26 Dependent variable: CITrevenues
| const | −13518.2 | 4468.53 | −3.025 | 0.0026 | *** |
| CIT | 179.205 | 28.0727 | 6.384 | <0.0001 | *** |
| GDP | 0.0234881 | 0.00299545 | 7.841 | <0.0001 | *** |
| KOF | 136.631 | 31.5888 | 4.325 | <0.0001 | *** |
| FA | −0.0836872 | 0.0366288 | −2.285 | 0.0226 | ** |
| R&D | 0.320993 | 0.0859122 | 3.736 | 0.0002 | *** |
| EMPL | 0.774642 | 0.287798 | 2.692 | 0.0073 | *** |
| ADEP | −76.3951 | 35.7955 | −2.134 | 0.0332 | ** |
| DEBT | −34.6779 | 6.95062 | −4.989 | <0.0001 | *** |