Does The Tax Structure Play A Role In Economic Growth? Emperical Evidenve from Indonesia

Abstract

Economic growth is an important indicator of development. One of the incentives to increase economic growth comes from taxes. Taxes are the easiest thing to get and do by the government. This study aims to examine the effect of the tax structure on economic growth in Indonesia. The tax structure variables are income tax, goods and services tax, and customs tax. This study uses a multiple linear regression from 1994 to 2018. The results of the study found that income tax and customs tax had a significant negative effect on economic growth. Meanwhile, the goods and services tax has a significant positive effect on economic growth. The suggestion of this research is that the government should consider not increasing income taxes and customs taxes because they have an impact on public consumption and cost domestic production.