Main Article Content
Abstract
Purpose: This study examines the impact of various tax policies on economic growth through a comparative analysis of different taxation models, including progressive, regressive, and corporate tax structures. It aims to identify best practices in tax policy design that balance revenue generation, investment stimulation, and economic equity while addressing emerging challenges such as digital taxation and environmental tax policies.
Research Design and Methodology: The study employs a systematic literature review (SLR) methodology, synthesizing existing empirical and theoretical research from peer-reviewed journals, policy reports, and economic analyses. The review focuses on comparative assessments of taxation policies across developed and developing economies, evaluating their role in fostering fiscal stability and economic expansion.
Findings and Discussion: The findings indicate that progressive tax structures contribute to income redistribution but may discourage investment if tax rates are excessively high. In contrast, regressive tax policies ensure stable revenue flows but disproportionately impact low-income groups. Corporate taxation influences foreign direct investment (FDI) and business competitiveness, requiring a balanced approach between fostering economic activity and ensuring adequate government revenue. The study also highlights gaps in digital taxation and environmental tax implementation, emphasizing the need for global cooperation and regulatory alignment to enhance tax efficiency.
Implications: The study provides strategic recommendations for policymakers to develop adaptive, data-driven tax policies that promote sustainable economic growth. It underscores the importance of fiscal transparency, digital tax administration, and well-structured tax incentives to enhance compliance and prevent tax evasion. Future research should focus on empirical analyses of taxation's long-term effects on economic development and the role of digital transformation in tax governance.
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Article Details

This work is licensed under a Creative Commons Attribution 4.0 International License.
References
- Acemoglu, D. (2008). Introduction to modern economic growth. Princeton university press.
- Adams, C. (1992). For good and evil: The impact of taxes on the course of civilization. Madison Books.
- Adanma, U. M., & Ogunbiyi, E. O. (2024). A comparative review of global environmental policies for promoting sustainable development and economic growth. International Journal of Applied Research in Social Sciences, 6(5), 954–977. https://doi.org/10.51594/ijarss.v6i5.1147
- Ajmera, T., & Nemane, V. (2023). Carbon Tax: Moving Towards a Net-Zero Emissions Future. https://doi.org/10.18601/01236458.n57.07
- Akcigit, U., Hanley, D., & Stantcheva, S. (2022). Optimal taxation and R&D policies. Econometrica, 90(2), 645–684. https://doi.org/10.3982/ECTA15445
- Akepe, L. E. (2023). Improving Tax Collection Efficiency Through the Use of Technology: A Case Study of African Governments. https://doi.org/10.2139/ssrn.4458198
- Akinsulire, A. A., Idemudia, C., Okwandu, A. C., & Iwuanyanwu, O. (2024). Economic and social impact of affordable housing policies: A comparative review. International Journal of Applied Research in Social Sciences, 6(7), 1433–1448. https://doi.org/10.51594/ijarss.v6i7.1333
- Akpan, N. I. (2019). The impact of external shocks on Nigeria’s GDP performance within the context of the global financial crisis. University of Bradford. http://hdl.handle.net/10454/17454
- Arestis, P. (2022). Macro-Economic and Financial Policies for Sustainability and Resilience BT - Economic Policies for Sustainability and Resilience (P. Arestis & M. Sawyer (eds.); pp. 1–44). Springer International Publishing. https://doi.org/10.1007/978-3-030-84288-8_1
- Asawasakulkrai, A. (2022). Tax Revenue and its Redistributive Effects on Inequality and Human Develepment. Asian Administration & Management Review, 5(2). https://doi.org/10.2139/ssrn.4543401
- Asimakopoulos, S., Lorusso, M., & Pieroni, L. (2021). Can public spending boost private consumption? Canadian Journal of Economics/Revue Canadienne d’économique, 54(3), 1275–1313. https://doi.org/10.1111/caje.12527
- Beer, S., De Mooij, R., & Liu, L. (2020). International corporate tax avoidance: A review of the channels, magnitudes, and blind spots. Journal of Economic Surveys, 34(3), 660–688. https://doi.org/10.1111/joes.12305
- Belahouaoui, R., & Attak, E. H. (2023). The importance of perceived fairness regarding tax burden in compliance behavior: a qualitative study using the Delphi method in Morocco. Journal of Financial Reporting and Accounting, ahead-of-p(ahead-of-print). https://doi.org/10.1108/JFRA-04-2023-0213
- Brys, B., Perret, S., Thomas, A., & O’Reilly, P. (2016). Tax Design for Inclusive Economic Growth. OECD Taxation Working Papers, 26, 0_1. https://doi.org/10.1787/22235558
- Colon, D. W., & Swagerman, D. M. (2015). Enhanced relationship preparedness in a Dutch multinational context: A tax control framework. Journal of Accounting and Taxation, 7(1), 13–18. https://doi.org/10.5897/JAT2014.0129
- Congleton, R. D. (2024). Optimal taxation for democracies with less than perfect voters: A public choice perspective. Kyklos, 77(1), 3–21. https://doi.org/10.1111/kykl.12356
- Coscieme, L., Mortensen, L. F., Anderson, S., Ward, J., Donohue, I., & Sutton, P. C. (2020). Going beyond Gross Domestic Product as an indicator to bring coherence to the Sustainable Development Goals. Journal of Cleaner Production, 248, 119232. https://doi.org/https://doi.org/10.1016/j.jclepro.2019.119232
- Ding, S., Jiang, W., Li, S., & Wei, S.-J. (2024). Fiscal policy volatility and capital misallocation: Evidence from China. European Economic Review, 167, 104797. https://doi.org/https://doi.org/10.1016/j.euroecorev.2024.104797
- Dorcas, Z. (2023). The Impact of Tax Incentives on Foreign Direct Investment in the Oil and Gas Sector Of Uganda. Institute of Petroleum Studies-Kampala.
- Fuest, C., & Neumeier, F. (2023). Corporate taxation. Annual Review of Economics, 15(1), 425–450. https://doi.org/10.1016/b0-08-043076-7/04261-3
- Gangl, K. (2020). How to Achieve Tax Compliance by the Wealthy.
- Hanna, N. K. (2009). Enabling enterprise transformation: Business and grassroots innovation for the knowledge economy. Springer Science & Business Media.
- Hebous, S., & Ruf, M. (2017). Evaluating the effects of ACE systems on multinational debt financing and investment. Journal of Public Economics, 156, 131–149. https://doi.org/https://doi.org/10.1016/j.jpubeco.2017.02.011
- Kallianiotis, I. (2022). Tax Reform Imperative: Alleviating Financial Burden and Fostering Middle-Class Prosperity in the U.S. Economy. Journal of Business and Economic Options, 5(1 SE-Articles), 48–57. http://resdojournals.com/index.php/jbeo/article/view/208
- Lannai, D., Syahban, F. A., Nurfadila, N., Haeruddin, S. H., & Subhan, S. (2023). How Tax Policies and Business Strategies Affect MSME Actors During the Covid-19 Pandemic. Advances in Taxation Research, 1(1 SE-Articles), 13–24. https://doi.org/10.60079/atr.v1i1.5
- Lipsey, R. G., Carlaw, K. I., & Bekar, C. T. (2005). Economic transformations: general purpose technologies and long-term economic growth. Oup Oxford.
- Mamasoliev, S. (2024). The Role of International Trade In Us Economic Growth. Innovative Developments and Research in Education, 3(32), 139–147.
- Mankiw, N. G. (2021). Principles of economics. Cengage Learning.
- Maulid, L. C., Bawono, I. R., & Sudibyo, Y. A. (2022). Analysis of Causality among Tax Revenue, State Expenditure, Inflation, and Economic Growth in Indonesia between 1973 and 2019. Public Policy and Administration, 21(1). https://doi.org/10.5755/j01.ppaa.21.1.29950
- Mirrlees, J. A. (1976). Optimal tax theory: A synthesis. Journal of Public Economics, 6(4), 327–358. https://doi.org/https://doi.org/10.1016/0047-2727(76)90047-5
- Nembe, J. K., & Idemudia, C. (2024). Designing effective policies to address the challenges of global digital tax reforms. World Journal of Advanced Research and Reviews, 22(3), 1171–1183. https://doi.org/10.30574/wjarr.2024.22.3.1837
- Peng, Q., Ismail, Z., & Ahamad Rapani, N. H. (2024). The Effect of Tax Incentives on Innovation and Enterprise Performance: A Literature Review. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(3), 183–195. https://doi.org/10.6007/ijarafms/v14-i3/22146
- Shettigar, J., Misra, P., Sanyal, P. K., & Kawinga, A. (2024). The impact of tax reforms on human development index: Literature review approach. International Journal of Social Welfare, 33(3), 757–776. https://doi.org/10.1111/ijsw.12629
- Stiglitz, J. E. B. T.-H. of P. E. (1987). Chapter 15 Pareto efficient and optimal taxation and the new new welfare economics. In Handbook of Public Economics (Vol. 2, pp. 991–1042). Elsevier. https://doi.org/https://doi.org/10.1016/S1573-4420(87)80010-1
- Su, S., Qamruzzaman, M., & Karim, S. (2023). Charting a sustainable future: the impact of economic policy, environmental taxation, innovation, and natural resources on clean energy consumption. Sustainability, 15(18), 13585. https://doi.org/10.3390/su151813585
- Sukirno, S. (2006). Ekonomi pembangunan: proses, masalah dan dasar kebijakan.
- Syukur, A. T. (2024). Strategies and Public Policies for Economic Recovery Post-Pandemic: The Role of Taxation According to Qualitative Studies. Atestasi: Jurnal Ilmiah Akuntansi, 7(1), 496–509. https://doi.org/10.57178/atestasi.v7i1.809
- Tanzi, V., Şen, H., & Kaya, A. (2023). Taxation and economic growth: A historical and agnostic review. Acta Oeconomica, 73(1), 19–34. https://doi.org/10.1556/032.2023.00003
- Tjan, J. S. (2024). The Role of Tax Systems in Reducing Income Inequality: A Literature Review. Advances in Taxation Research, 2(1 SE-Articles), 50–64. https://doi.org/10.60079/atr.v2i1.290
- Venâncio, A., Barros, V., & Raposo, C. (2022). Corporate taxes and high-quality entrepreneurship. Small Business Economics, 58(1), 353–382. https://doi.org/10.1007/s11187-020-00413-0
- Wenjuan, S., & Zhao, K. (2023). Balancing fiscal expenditure competition and long-term innovation investment: Exploring trade-offs and policy implications for local governments. Plos One, 18(11), e0293158. https://doi.org/10.1371/journal.pone.0293158
- Xu, B., Sendra-García, J., Gao, Y., & Chen, X. (2020). Driving total factor productivity: Capital and labor with tax allocation. Technological Forecasting and Social Change, 150, 119782. https://doi.org/https://doi.org/10.1016/j.techfore.2019.119782
- Yan, H., Qamruzzaman, M., & Kor, S. (2023). Nexus between green investment, fiscal policy, environmental tax, energy price, natural resources, and clean energy—a step towards sustainable development by fostering clean energy inclusion. Sustainability, 15(18), 13591. https://doi.org/10.3390/su151813591
- Zhang, M., & Guo, M. (2024). Attracting Private Investment to Renewable Energy Projects in India. Utilities Policy, 90, 101816. https://doi.org/https://doi.org/10.1016/j.jup.2024.101816
- Zwick, E., & Mahon, J. (2017). Tax Policy and Heterogeneous Investment Behavior. American Economic Review, 107(1), 217–248. https://doi.org/10.1257/aer.20140855
References
Acemoglu, D. (2008). Introduction to modern economic growth. Princeton university press.
Adams, C. (1992). For good and evil: The impact of taxes on the course of civilization. Madison Books.
Adanma, U. M., & Ogunbiyi, E. O. (2024). A comparative review of global environmental policies for promoting sustainable development and economic growth. International Journal of Applied Research in Social Sciences, 6(5), 954–977. https://doi.org/10.51594/ijarss.v6i5.1147
Ajmera, T., & Nemane, V. (2023). Carbon Tax: Moving Towards a Net-Zero Emissions Future. https://doi.org/10.18601/01236458.n57.07
Akcigit, U., Hanley, D., & Stantcheva, S. (2022). Optimal taxation and R&D policies. Econometrica, 90(2), 645–684. https://doi.org/10.3982/ECTA15445
Akepe, L. E. (2023). Improving Tax Collection Efficiency Through the Use of Technology: A Case Study of African Governments. https://doi.org/10.2139/ssrn.4458198
Akinsulire, A. A., Idemudia, C., Okwandu, A. C., & Iwuanyanwu, O. (2024). Economic and social impact of affordable housing policies: A comparative review. International Journal of Applied Research in Social Sciences, 6(7), 1433–1448. https://doi.org/10.51594/ijarss.v6i7.1333
Akpan, N. I. (2019). The impact of external shocks on Nigeria’s GDP performance within the context of the global financial crisis. University of Bradford. http://hdl.handle.net/10454/17454
Arestis, P. (2022). Macro-Economic and Financial Policies for Sustainability and Resilience BT - Economic Policies for Sustainability and Resilience (P. Arestis & M. Sawyer (eds.); pp. 1–44). Springer International Publishing. https://doi.org/10.1007/978-3-030-84288-8_1
Asawasakulkrai, A. (2022). Tax Revenue and its Redistributive Effects on Inequality and Human Develepment. Asian Administration & Management Review, 5(2). https://doi.org/10.2139/ssrn.4543401
Asimakopoulos, S., Lorusso, M., & Pieroni, L. (2021). Can public spending boost private consumption? Canadian Journal of Economics/Revue Canadienne d’économique, 54(3), 1275–1313. https://doi.org/10.1111/caje.12527
Beer, S., De Mooij, R., & Liu, L. (2020). International corporate tax avoidance: A review of the channels, magnitudes, and blind spots. Journal of Economic Surveys, 34(3), 660–688. https://doi.org/10.1111/joes.12305
Belahouaoui, R., & Attak, E. H. (2023). The importance of perceived fairness regarding tax burden in compliance behavior: a qualitative study using the Delphi method in Morocco. Journal of Financial Reporting and Accounting, ahead-of-p(ahead-of-print). https://doi.org/10.1108/JFRA-04-2023-0213
Brys, B., Perret, S., Thomas, A., & O’Reilly, P. (2016). Tax Design for Inclusive Economic Growth. OECD Taxation Working Papers, 26, 0_1. https://doi.org/10.1787/22235558
Colon, D. W., & Swagerman, D. M. (2015). Enhanced relationship preparedness in a Dutch multinational context: A tax control framework. Journal of Accounting and Taxation, 7(1), 13–18. https://doi.org/10.5897/JAT2014.0129
Congleton, R. D. (2024). Optimal taxation for democracies with less than perfect voters: A public choice perspective. Kyklos, 77(1), 3–21. https://doi.org/10.1111/kykl.12356
Coscieme, L., Mortensen, L. F., Anderson, S., Ward, J., Donohue, I., & Sutton, P. C. (2020). Going beyond Gross Domestic Product as an indicator to bring coherence to the Sustainable Development Goals. Journal of Cleaner Production, 248, 119232. https://doi.org/https://doi.org/10.1016/j.jclepro.2019.119232
Ding, S., Jiang, W., Li, S., & Wei, S.-J. (2024). Fiscal policy volatility and capital misallocation: Evidence from China. European Economic Review, 167, 104797. https://doi.org/https://doi.org/10.1016/j.euroecorev.2024.104797
Dorcas, Z. (2023). The Impact of Tax Incentives on Foreign Direct Investment in the Oil and Gas Sector Of Uganda. Institute of Petroleum Studies-Kampala.
Fuest, C., & Neumeier, F. (2023). Corporate taxation. Annual Review of Economics, 15(1), 425–450. https://doi.org/10.1016/b0-08-043076-7/04261-3
Gangl, K. (2020). How to Achieve Tax Compliance by the Wealthy.
Hanna, N. K. (2009). Enabling enterprise transformation: Business and grassroots innovation for the knowledge economy. Springer Science & Business Media.
Hebous, S., & Ruf, M. (2017). Evaluating the effects of ACE systems on multinational debt financing and investment. Journal of Public Economics, 156, 131–149. https://doi.org/https://doi.org/10.1016/j.jpubeco.2017.02.011
Kallianiotis, I. (2022). Tax Reform Imperative: Alleviating Financial Burden and Fostering Middle-Class Prosperity in the U.S. Economy. Journal of Business and Economic Options, 5(1 SE-Articles), 48–57. http://resdojournals.com/index.php/jbeo/article/view/208
Lannai, D., Syahban, F. A., Nurfadila, N., Haeruddin, S. H., & Subhan, S. (2023). How Tax Policies and Business Strategies Affect MSME Actors During the Covid-19 Pandemic. Advances in Taxation Research, 1(1 SE-Articles), 13–24. https://doi.org/10.60079/atr.v1i1.5
Lipsey, R. G., Carlaw, K. I., & Bekar, C. T. (2005). Economic transformations: general purpose technologies and long-term economic growth. Oup Oxford.
Mamasoliev, S. (2024). The Role of International Trade In Us Economic Growth. Innovative Developments and Research in Education, 3(32), 139–147.
Mankiw, N. G. (2021). Principles of economics. Cengage Learning.
Maulid, L. C., Bawono, I. R., & Sudibyo, Y. A. (2022). Analysis of Causality among Tax Revenue, State Expenditure, Inflation, and Economic Growth in Indonesia between 1973 and 2019. Public Policy and Administration, 21(1). https://doi.org/10.5755/j01.ppaa.21.1.29950
Mirrlees, J. A. (1976). Optimal tax theory: A synthesis. Journal of Public Economics, 6(4), 327–358. https://doi.org/https://doi.org/10.1016/0047-2727(76)90047-5
Nembe, J. K., & Idemudia, C. (2024). Designing effective policies to address the challenges of global digital tax reforms. World Journal of Advanced Research and Reviews, 22(3), 1171–1183. https://doi.org/10.30574/wjarr.2024.22.3.1837
Peng, Q., Ismail, Z., & Ahamad Rapani, N. H. (2024). The Effect of Tax Incentives on Innovation and Enterprise Performance: A Literature Review. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(3), 183–195. https://doi.org/10.6007/ijarafms/v14-i3/22146
Shettigar, J., Misra, P., Sanyal, P. K., & Kawinga, A. (2024). The impact of tax reforms on human development index: Literature review approach. International Journal of Social Welfare, 33(3), 757–776. https://doi.org/10.1111/ijsw.12629
Stiglitz, J. E. B. T.-H. of P. E. (1987). Chapter 15 Pareto efficient and optimal taxation and the new new welfare economics. In Handbook of Public Economics (Vol. 2, pp. 991–1042). Elsevier. https://doi.org/https://doi.org/10.1016/S1573-4420(87)80010-1
Su, S., Qamruzzaman, M., & Karim, S. (2023). Charting a sustainable future: the impact of economic policy, environmental taxation, innovation, and natural resources on clean energy consumption. Sustainability, 15(18), 13585. https://doi.org/10.3390/su151813585
Sukirno, S. (2006). Ekonomi pembangunan: proses, masalah dan dasar kebijakan.
Syukur, A. T. (2024). Strategies and Public Policies for Economic Recovery Post-Pandemic: The Role of Taxation According to Qualitative Studies. Atestasi: Jurnal Ilmiah Akuntansi, 7(1), 496–509. https://doi.org/10.57178/atestasi.v7i1.809
Tanzi, V., Şen, H., & Kaya, A. (2023). Taxation and economic growth: A historical and agnostic review. Acta Oeconomica, 73(1), 19–34. https://doi.org/10.1556/032.2023.00003
Tjan, J. S. (2024). The Role of Tax Systems in Reducing Income Inequality: A Literature Review. Advances in Taxation Research, 2(1 SE-Articles), 50–64. https://doi.org/10.60079/atr.v2i1.290
Venâncio, A., Barros, V., & Raposo, C. (2022). Corporate taxes and high-quality entrepreneurship. Small Business Economics, 58(1), 353–382. https://doi.org/10.1007/s11187-020-00413-0
Wenjuan, S., & Zhao, K. (2023). Balancing fiscal expenditure competition and long-term innovation investment: Exploring trade-offs and policy implications for local governments. Plos One, 18(11), e0293158. https://doi.org/10.1371/journal.pone.0293158
Xu, B., Sendra-García, J., Gao, Y., & Chen, X. (2020). Driving total factor productivity: Capital and labor with tax allocation. Technological Forecasting and Social Change, 150, 119782. https://doi.org/https://doi.org/10.1016/j.techfore.2019.119782
Yan, H., Qamruzzaman, M., & Kor, S. (2023). Nexus between green investment, fiscal policy, environmental tax, energy price, natural resources, and clean energy—a step towards sustainable development by fostering clean energy inclusion. Sustainability, 15(18), 13591. https://doi.org/10.3390/su151813591
Zhang, M., & Guo, M. (2024). Attracting Private Investment to Renewable Energy Projects in India. Utilities Policy, 90, 101816. https://doi.org/https://doi.org/10.1016/j.jup.2024.101816
Zwick, E., & Mahon, J. (2017). Tax Policy and Heterogeneous Investment Behavior. American Economic Review, 107(1), 217–248. https://doi.org/10.1257/aer.20140855