Acta Univ. Agric. Silvic. Mendelianae Brun. 2017, 65(3), 1023-1029 | DOI: 10.11118/actaun201765031023

Modelling Oil-Sector Dependency of Tax Revenues in a Resource Rich Country: Evidence from Azerbaijan

Akif Musayev1,2,3,4, Khatai Aliyev5,6
1 Institute of Economics, Azerbaijan National Academy of Sciences, Baku, Azerbaijan
2 Near East University, Nicosia, TRNC
3 Azerbaijan University, Baku, Azerbaijan
4 Azerbaijan State Oil and Industrial University, Baku, Azerbaijan
5 Department of World Economy, Baku Engineering University, Khirdalan, Azerbaijan
6 Institute of Control Systems, Azerbaijan National Academy of Sciences, Baku, Azerbaijan

Forecasting tax revenues is an important issue in budget planning. As a resource rich country, Azerbaijan's budget revenues is severely depend on oil price and production levels. This study investigates oil sector dependency of state budget tax revenues in case of Azerbaijan by employing FMOLS, DOLS and CCR cointegration methods for the period of 2000Q1-2015Q2. Empirical results indicate statistically and economically significant positive long-run impact of both oil related factors on tax revenues. Considering current fiscal challenges in the country, research findings are very useful for policy purposes and fills the gap in the literature by drawing mechanism of the association and estimating the relationship empirically.

Keywords: tax revenues, oil price, oil production, oil dependency, Azerbaijan

Prepublished online: July 3, 2017; Published: May 1, 2017  Show citation

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Musayev, A., & Aliyev, K. (2017). Modelling Oil-Sector Dependency of Tax Revenues in a Resource Rich Country: Evidence from Azerbaijan. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(3), 1023-1029. doi: 10.11118/actaun201765031023
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