Journal of Applied Finance & Banking

Stock Markets and Tax Revenue

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• Abstract

  Many developing countries struggle to raise taxes. The present work considers the financial sector – specifically the stock market sector – as a boon for tax revenue. Historically I find that higher stock market total value traded sectors are associated with more tax revenue. Using a panel data set of 96 countries over the period 1990-2008 I find that stock markets positively influence government’s ability to raise tax revenue.