Proportion of Agriculture, Industry and Services Sector to Value Added Tax Revenue in Low Income and Lower-Middle Income Countries: Rule of Law as a Moderating Variable
DOI:
https://doi.org/10.31092/jpkn.v5i1.2314Keywords:
Agriculture, Industry, Rule of law, Services, Value added taxAbstract
This study aims to determine how much the agricultural, industrial and service sectors affect Value Added Tax revenues in low and lower middle income countries with rule of law as moderating variable. The independent variables used in this study are the proportion of the agricultural sector to GDP, the proportion of the industrial sector to GDP, the proportion of the service sector to GDP, the dependent variable used is VAT revenue while the moderating variable is the rule of law. This study uses secondary data with a population of 27 countries with low and lower middle income in a span of seven years, from 2009 to 2015. The statistical method used in this study is quantitative method with multiple linear regression using panel-corrected standard error regression model. The results showed that before being moderated by the rule of law, the agricultural, industrial and service sectors had no effect on VAT revenues. But after being moderated by the rule of law, the agricultural, industrial and service sectors have a positive influence on VAT revenues. Thus, the government is expected to focus attention on the rule of law. Good rule of law will increase investor confidence in the existence of applicable laws and also related to property rights, law enforcement officers, courts and also low levels of crime and violence which ultimately increase tax revenues reflected in increased VAT revenues.
References
Addison, T., & Levin, J. (2012). The determinants of tax revenue in sub-Saharan Africa.
Apriani, N., & Said, R. W. (2022). Upaya Perlindungan Hukum Terhadap Industri Usaha Mikro Kecil dan Menengah (UMKM) di Indonesia. Jurnal Al Azhar Indonesia Seri Ilmu Sosial, 3(1), 443234.
Ayu, I. K., & Heriawanto, B. K. (2018). Perlindungan Hukum Terhadap Lahan Pertanian Akibat Terjadinya Alih Fungsi Lahan di Indonesia. JU (Jurnal Ketahanan Pangan), 2(2), 122-130.
Chaudhry, I. S., & Munir, F. (2010). Determinants of low tax revenue in Pakistan. Pakistan Journal of Social Sciences, 30(2), 439-452.
Godin, M., & Hindriks, J. (2015). A Review of critical issues on tax design and tax administration in a global economy and developing countries. CRED-UNamur, Working Paper, 7.
James, S., & Alley, C. (2008). Successful tax reform: the experience of value added tax in the United Kingdom and goods and services tax in New Zealand.
Kanbur, R. (2009). Conceptualising informality: regulation and enforcement.
Keen, M., & Lockwood, B. (2010). The value added tax: Its causes and consequences. Journal of Development Economics, 92(2), 138-151.
Keen, M. M. (2012). Taxation and development: Again. International Monetary Fund.
Mudhoffir, A. M. (2014). Teori kekuasaan Michel Foucault: Tantangan bagi sosiologi politik. MASYARAKAT: Jurnal Sosiologi, 75-100.
Murunga, J. (2016). Tax effort and determinants of tax ratios in Kenya. European Journal of Economics, Law and Politics, 3(2), 24-36.
Permadi, D. G., & Wijaya, S. (2022). Analysis of determinants of value added tax revenue in Asia. Jurnal Penelitian Pendidik Indonesia, 8(3), 622-631.
Piancastelli, M. (2001). Measuring the tax effort of developed and developing countries: Cross country panel data analysis-1985/95.
Safitri, R., Priyagus, P., & Ulfah, Y. (2021). Pengaruh beberapa sektor ekonomi terhadap pajak, retribusi dan pendapatan asli daerah. Kinerja, 18(4), 657-671.
Sari, A. A. (2018). Peran Otoritas Jasa Keuangan Dalam Mengawasi Jasa Keuangan Di Indonesia. Supremasi: Jurnal Hukum, 1(1), 23-33.
Sarmento, J. (2016). The determinants of value added tax revenues in the European Union. The European Journal of Management Studies, 21(2), 79-99.
Sihombing, Pardomuan. (2021). Corat Coret Catatan Statistisi Pemula. Bengkulu: Yayasan Sahabat Alam Rafflesia
World Bank. (2023, Agustus 3). World Development Indicators. Diakses dari https://databank.worldbank.org/source/world-development-indicators#
World Bank. (2023, Agustus 3). World Bank Country and Lending Groups. Diakses dari https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
World Population Review. (2023, Agustus 3). World Bank Country Lending Group guidelines. Diakses dari https://worldpopulationreview.com/country-rankings/middle-income-countries.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Avior Ocean Louis Ishaac Noya, Suparna Wijaya, Dian Thasya F Hutagaol
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.
