The Effect of Economic Growth on the Tax Revenue: Case of Egypt

Taxing is one of the sources of state revenue, and on the other hand, economic growth can influence taxing, as economic activities done during the process of Growth will increase or decrease the tax revenue. The effect relies on the time period as well volume of economic activities. The objective of this paper is to measure the effect of economic growth on tax revenue in the Egyptian economy in the period from 1975 to 2022 to this end, in an Autoregressive Distributed Lag (ARDL) approach has been employed, using six variables: Tax revenue (% of GDP), GDP (current LCU), GDP per capita (current LCU), Inflation, consumer prices (annual %), Gross capital formation (current LCU), and Unemployment, total (% of total labor force) (national estimate). The Importance of this paper exists because our point of departure from the current studies lies in the fact that we measure the effect of economic growth on tax revenue in Egypt not the opposite as other literature did. The results showed unemployment and gross capital formation to be insignificant. GDP currency and GDP per capita were significant in the short run and inflation of consumer prices was significant in the long run.