Impact of taxes on the export-import tendencies in the countries of the EU in unstable present-day

Abstract

The problem of rationales for taxes and transfers is given a lot of attention by both researchers and politicians. Taxes are one of the main sources of government revenue and are considered a strong resource for welfare state. Taxes have an impact on the development of international trade and business, as the latter chooses a more attractive location with less tax burden and costs. Nevertheless, the country’s status, competitiveness of industries, development of the infrastructure, safety and transparency are also important factors for the domestic and foreign business and investors. That is why it is necessary to study the impact of taxes on the export and import policy. In this article we study the development of export-import tendencies in the EU countries over the period from 2002 to 2018. Statistical calculations are done for EU-28 countries. The results show that values of tax revenues as percentage of GDP change slowly and diverge little from set levels. A corresponding pattern is evident in the main tax categories, however the fiscal lag for direct taxes, indirect taxes and social contributions differs. Research indicates that different export-import strategies prevail across the EU countries, as do systems of taxation. A system of two equations is basis for the model, which uses the econometric approach to assess the impact of taxes on the development of export-import tendencies in the EU. The analysis proves that if tax rates on exports are reduced in the short term, there is a positive effect on the intensity of export activities, but this may increase the dependence of the national economy on foreign markets both in the short and in the long term. Thus, reductions in import tax rates, on the one hand, help to strengthen the competitiveness of domestic producers in foreign markets, and on the other, intensify competition in the domestic market.