The Impact of Taxes on Country Performance within the Framework of Macroeconomic Indicators: DEA Application over the OECD Countries

Abstract

Purpose -This study aims to measure the tax-based performance of 20 selected OECD countries. In line with Design/Methodology/Approach- this purpose, 6 inputs and 4 outputs determined as a result of the results of previous scientific studies and the relevant literature review were analysed. The data set was obtained by weighting the data of the selected countries between 2000 and 2020, and the results were interpreted by performing Data Envelopment Analysis (DEA) and Malmquist total factor productivity (TFP) analysis on these data. When TFP is analysed considering the periods covered by the research, the highest advance was in the 2016-2017 period with a rate of 8.5%. The main reason for the advancement in this period was the 9.3% increase in technological progress. Findings - When the results of the analyses for Turkey are evaluated, it is concluded that Turkey is efficient according to the BCC model in all years examined. This shows that Turkey manages its tax revenues effectively within the national framework. In addition, according to the Malmquist Total Factor Productivity Analysis, where all years are evaluated in total, Turkey has been one of the 10 countries that increased its efficiency by 2.5 per cent in this process. Discussion- As a result of the analysis, for OECD countries and Turkey, in addition to the tax revenues collected, the management and auditing of taxes have come to the forefront. It is important for countries to act on an appropriate scale with their managerial skills. The tax revenues collected and the tax policies implemented, as well as the developments in technology and the fact that countries follow these developments, take action towards technological developments, and establish appropriate software programs and infrastructure systems, will have more positive reflections on macroeconomic indicators. When the performance or efficiency of countries are compared with DEA and long-run TFP on a yearly basis, it is determined that inefficient countries are due to their inability to follow technological innovations. It can be said that digital transformation should gain momentum in order to be more efficient.