Article Sidebar
Download
Statistic
Read Counter : 300
Download : 254
Main Article Content
Abstract
Tax revenue is one of the backbones of economy in almost every country in the world. There are several determinants that influence the amount of tax revenue in one country, one of which is international transaction activities. Such activities can partly be presented by three variables; Foreign Direct Investment (FDI), Trade Openness (TO), and External Debt. This study aims to acknowledge the effects of international transaction experienced by a country regarding its tax revenue. External Debt is used as a moderating variable to the effects of FDI and TO on tax revenue. The data source was taken from the World Bank within the period of 2002-2019 in 19 countries around LAC regions. The study implements an associative quantitative method with PCSE regression. The result showed that FDI affects tax revenue negatively, whereas trade openness and external debt affect tax revenue positively. External debt as a moderating variable strengthens the effect of FDI and weakens the effects of trade openness to tax revenue. Further research is expected to include all the LAC countries, add more variables relevant to the international transactions, and renew the research period.
Keywords
External Debt
Foreign Direct Investment
Latin America and Caribbean
Tax Revenue
Trade Openness
Article Details
This work is licensed under a Creative Commons Attribution 4.0 International License.
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
Nugraha, H. T., & Wijaya, S. (2023). The Determinants of Tax Revenue in the Context of International Transactions in the Latin America and Caribbean (LAC) Regions 2002-2019. Ilomata International Journal of Tax and Accounting, 4(3), 613-627. https://doi.org/10.52728/ijtc.v4i3.843
References
- Abdenur, A. E. (2017). Skirting or Courting Controversy? Chinese FDI in Latin American Extractive Industries. Revue Internationale de Politique de Développement, 9, 174–198. https://doi.org/10.4000/poldev.2365
- Alberto, M.-O., & Forero, C. G. (2010). Goodness-of-Fit Testing. International Encyclopedia of Education, 7, 190–196.
- Bellak, C., & Leibrecht, M. (2005). Do Low Corporate Income Tax Rates Attract FDI? Evidence from Eight Central and East European Countries. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.869374
- Biz Latin Hub. (2023, May 10). Why Declare Your Taxes in Paraguay. Https://Www.Bizlatinhub.Com/Why-Declare-Taxes-Paraguay/.
- Casares, E. R. (2015). A relationship between external public debt and economic growth. Estudios Economicos, 30(2), 219–243.
- Chien, F., Chau, K. Y., Aldeehani, T. M., Huy, P. Q., Tan, L. P., & Mohsin, M. (2022). Does external debt as a new determinants of fiscal policy influence sustainable economic growth: implications after COVID-19. Economic Change and Restructuring, 55(3), 1717–1737. https://doi.org/10.1007/s10644-021-09365-1
- Chin, W., & Marcoulides, G. (1998). The Partial Least Squares Approach to Structural Equation Modeling. Modern Methods for Business Research, 8.
- Devlin, R., & French-Davis, R. (1995). The Great Latin America Debt Crisis: A Decade of Asymmetric Adjustment. Revista de Economia Politica, 3, 117–142.
- Eddine Salhi, S., & El Aboudi, S. (2021). Inflation, External Debt, and Fiscal Mobilization in Morocco: The Transmission Channels of Devaluation and the Inflationary Past. Asian Economic and Financial Review, 11(7), 545–562. https://doi.org/10.18488/journal.aefr.2021.117.545.562
- Fiallos, J. (2022). Coffee Annual : Honduras.
- Fleischhaker, C., Schellekens, P., & Canuto Otaviano. (2015, January 11). The Curious Case of Brazil’s Closedness to Trade. Https://Cepr.Org/Voxeu/Columns/Curious-Case-Brazils-Closedness-Trade.
- Gaspareniene, L., Kliestik, T., Sivickiene, R., Remeikiene, R., & Endrijaitis, M. (2022). Impact of Foreign Direct Investment on Tax Revenue: The Case of the European Union. Journal of Competitiveness, 14(1), 43–60. https://doi.org/10.7441/joc.2022.01.03
- Ghozali, I. (2016). Aplikasi Analisis Multivariate dengan Program IBM SPSS 23 (Edisi 8). Badan Penerbit Universitas Diponegoro.
- Gnangnon, S. K., & Brun, J. (2019). Trade openness, Tax Reform and Tax Revenue in Developing Countries. The World Economy, 42(12), 3515–3536. https://doi.org/10.1111/twec.12858
- Gropp, R., & Kostial, K. (2001, June). Finance & Development, June 2001 - FDI and Corporate Tax Revenue: Tax Harmonization or Competition? Imf.Org. https://www.imf.org/external/pubs/ft/fandd/2001/06/gropp.htm
- Gujarati, D. N. (2004). Basic Econometrics (4th Edition). The McGraw-Hill Companies.
- Hays, W. L. (1994). Statistics (5th Edition). Harcourt Brace College Publishers.
- InvestDominica. (2023, May 10). Dominica Offers High Value Investment Opportunities for Dynamic Investors. Https://Www.Investdominica.Com/Invest-Here.
- Jenkins, G., Kuo, C.-Y., & Harberger, A. C. (2011). Cost-Benefit Analysis for Investment Decisions: Chapter 11 (Economic Prices for Non-Tradable Goods and Services). Development Discussion Papers.
- Khalid, M. A. (2016). The Impact of Trade Openness on Economic Growth in the Case of Turkey. Research Journal of Finance and Accounting, 7(10), 51–61.
- Kwaku, A., Economics, M., Eric, A., & Agyei Kwaku, N. (2018). Trade Tax Revenue and Trade Openness in Ghana. Vlume 9.
- Mugasha, A. (2007). Solutions for Developing-Country External Debt: Insolvency or Forgiveness. Law and Business Review of the Americas, 13(4).
- Obsfield, K. (1991). Ekonomi Internasional: Teori dan Kebijaksanaan (Terjemahan). Rajawali Press.
- OEC. (2023, May 20). Coffee in Honduras. Https://Oec.World/En/Profile/Bilateral-Product/Coffee/Reporter/Hnd.
- O’neil, S. K. (2022, July 26). Why Latin America Lost at Globalization—and How It Can Win Now. Americas Qurterly. https://www.americasquarterly.org/article/why-latin-america-lost-at-globalization-and-how-it-can-win-now/
- Paraguay Solutions. (2023, May 10). Taxation. Https://Paraguaysolutions.Com/En/Taxation/.
- Pratomo, A. W. (2020). THE EFFECT OF FOREIGN DIRECT INVESTMENT ON TAX REVENUE IN DEVELOPING COUNTRIES. Jurnal BPPK : Badan Pendidikan Dan Pelatihan Keuangan, 13(1), 83–95. https://doi.org/10.48108/jurnalbppk.v13i1.484
- Purba, D., Tarigan, W., Sinaga, M., & Tarigan, V. (2021). Pelatihan Penggunaan Software SPSS Dalam Pengolahan Regressi Linear Berganda untuk Mahasiswa Fakultas Ekonomi Universitas Simalungun di Masa Pandemi Covid 19. Jurnal Karya Abadi, 5(5).
- Pyeman, J., Noor, N. H. H. M., Mohamad, W. M. F. W., & Yahya, A. A. (2016). Factors Affecting External Debt in Malaysia: An Empirical Investigation. In Proceedings of the 1st AAGBS International Conference on Business Management 2014 (AiCoBM 2014) (pp. 449–455). Springer Singapore. https://doi.org/10.1007/978-981-287-426-9_39
- Raza, W., & GROHS, H. (2022). Trade aspects of China’s presence in Latin America and the Caribbean.
- Saibum M.O., & Olatunbosun, O. S. (2013). Macroeconomic Determinants of Tax Revenue in Nigeria (1970-2011). World Applied Sciences Journal, 28(1), 27–35.
- Shubita, R. F., & Warrad, T. A. (2018). The Effects of International Trade Openness on Government Revenue: Empirical Evidence from Middle East and North African Region Countries. International Journal of Ecconomics and Financial Issues, 8(1), 153–160.
- Soomro, D. (2022, July 14). How to Become a 0% Paraguay Tax Resident without living there. Https://Visadb.Io/Blog/How-to-Become-a-0--Paraguay-Tax-Resident-without-Living-There-62cf1662a7fcdcd95e3300b2.
- Sunlife. (2023, May 10). Is Dominican Republic a Tax Haven? Https://Sunlife.Realestate/Blog/Is-Dominican-Republic-a-Tax-Haven/#:~:Text=Although%20the%20Dominican%20Republic%20is,This%20also%20applies%20to%20businesses.
- Takayama, H. (2023). Greenfield or Brownfield? FDI Entry Mode and Intangible Capital.
- Tanna, S., Li, C., & De Vita, G. (2018). The role of external debt in the foreign direct investment-growth relationship. International Journal of Finance & Economics, 23(4), 393–412. https://doi.org/10.1002/ijfe.1628
- Tanzi, V., & Zee, H. (2001). Tax Policy for Developing Countries. IMF Economic Issues, 27.
- trade.gov. (2022, September 23). Mexico - Trade Agreements. International Trade Administration. https://www.trade.gov/country-commercial-guides/mexico-trade-agreements
- Wijaya, S., & Dewi, A. K. (2022). Determinants of foreign direct investment and its implications on tax revenue in Indonesia. JPPI (Jurnal Penelitian Pendidikan Indonesia), 8(3), 719. https://doi.org/10.29210/020221523
- Zakaria, M. (2012). Interlinkages Between Openness and Foreign Debt in Pakistan. Dogus Universitesi Dergisi, 13(1), 161–170.