Tax Policy for Economic Recovery and Sustainable Development After COVID-19

The optimal taxation level and tax structure depend on numerous factors and enormously differ from country to country. However, the two mentioned tax policy instruments could ensure economic recovery and sustainable economic growth. This article aims to examine the effects of tax policy on economic development and evaluate the role of appropriate tax instruments in speeding up recovery. The results showed that tax level harms the GDP per capita growth rate in Central Europe and Baltic states over the 2000-2021 period. Another vital finding is the increase in both overall employment and investment to GDP ratio positively affected the real GDP per capita growth rates. In order to foster economic growth government might use tax cuts and other stimuli both for distor-tionary and non-distortionary taxes. The tax policy's institutional potential should be improved to neutralize the adverse effects of COVID-19 impact and enhance macroeconomic sustainability.

Keywords: taxes, fiscal stimulus, COVID-19, employment, economic development

JEL Classification: H20, H21, O23

Suggested Citation: Suggested Citation

Kaneva, Tetiana and Chugunov, Igor and Pasichnyi, Mykola and Andriy, Nikitishin and Husarevych, Nataliia, Tax Policy for Economic Recovery and Sustainable Development After COVID-19 (June 30, 2022). Pasichnyi et al./Problemy Ekorozwoju/Problems of Sustainable Development 2/2022, 102-109, Available at SSRN: https://ssrn.com/abstract=4220926 or http://dx.doi.org/10.2139/ssrn.4220926