The Effect of Revenue from Taxation on the Economic Growth of Bangladesh: Evidence from Time Series Data

Naznin Akhter Nipa (), Yan Liu (), Sazal Ahmed () and Sissoko Bourema ()
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Naznin Akhter Nipa: Southwest Forestry University, School of Economics and Management
Yan Liu: Southwest Forestry University, School of Economics and Management
Sazal Ahmed: Southwest Forestry University, College of Big Data and Intelligence Engineering
Sissoko Bourema: Southwest Forestry University, College of Foreign Language

A chapter in Proceedings of the 2025 3rd International Conference on Digital Economy and Management Science (CDEMS 2025), 2025, pp 444-467 from Springer

Abstract: Abstract Taxes play a pivotal role in influencing a nation's economic progress by generating revenue for essential public goods and services. Nonetheless, an excess of taxation can impede economic growth by deterring investment and consumption. Therefore, this study examines the relationship between taxation and economic growth in Bangladesh through the application of econometric analysis. A time series data collected from the period of 1987–2022 was applied to conduct the econometric analysis. This investigation employs diverse econometric techniques and models to explore the impact of taxation on economic growth in Bangladesh. The results revealed the GDP growth by indicating 1% increase of tax revenue, GDP will be increased by 0.00068%. The econometric study yields a substantial coefficient of R2 = 0.971, indicating a high level of determination with a forecasting accuracy of 97.1%. Furthermore, it is evident that not all taxes exert an identical influence on bolstering the economy. These findings offer valuable insights for policymakers in formulating effective tax policies that promote sustainable economic growth.

Keywords: Taxation; Economic growth; Impact; Bangladesh; Tax policy (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-770-0_51

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