The impact of taxes on economic growth in Vietnam

Abstract

The study examines the impact of tax revenues on economic growth in Vietnam, approaching the Autoregressive Distributed Lag (ARDL) model. The authors have taken steps to check the stationarity and lag of the variables in the model and tested the bound test to determine cointegration between variables before the desired regression estimate. The test results document that there is a long-term relationship between the variables in the model. After estimating the short-term and long-term models, the study also performs diagnostic tests to ensure reliable research results. Finally, the study indicates that value-added tax positively impacts economic growth in both the short and long term. In the short term, corporate income tax has a positive impact, but in the long term, it is the opposite. Meanwhile, tax collection in import border gates has no evidence for consideration. Based on the research results, the article outlines some tax policy implications in the upcoming period when Vietnam participates in the Base erosion and profit shifting - BEPS on global minimum tax rates.