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      • Taxation and economic development : an empirical analysis of Cambodia

        Huo, Chhay Graduate School of International Studies, Korea Un 2019 국내석사

        RANK : 231999

        This study aims to examine short-run and long-run relationship between tax revenue and economic development in Cambodia by using data from 1993 to 2017 for empirical analysis. Total tax revenue and indirect taxes are the two main explanatory variables while real GDP per capita substituted for economic development is considered as the main dependent variable. Auto Regressive Distributed Lag (ARDL) bound testing approach to co-integration was utilized to figure out the existence of long-run association; subsequently, Error Correction Model (ECM) was employed to obtain short-run dynamic coefficient. Total tax revenue has positive significant association with economic development for both short-run and long-run, whereas indirect taxes possess negative significant association with economic development for both short-run and long-run. For simplification, total tax revenue collected by government really contributed to real GDP per capita or living standard of individual through revenue redistribution; however, indirect taxes which are also part of tax revenue collected negatively affect real GDP per capita or people’s lives due to the regressive tax system. As recommendations, the government firstly should consider the implementation of personal income tax (PIT) with the progressive tax rates since Cambodia has not had concrete personal income tax yet. Secondly, the government should increase social spending and improve social welfare programs to enhance and upgrade the equity in society. Lastly, the government should continue her tax administration reforms in order to strengthen institution, tax registration system, accountability; and to eliminate tax evasion and corruption. We strongly believe that equitable tax system and cost reduction of tax collection will exist if the recommendations are implemented.

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