THE IMPACT OF INDIRECT TAXES ON ECONOMIC GROWTH

The main goal of this article is to analyze the impact of indirect taxes on economic growth in a long term on a sample of chosen OECD countries. The panel regression analysis method was used to explore the relationship between observed variables. The model is based on neoclassical growth model extended by human capital, consumption of households and government expenditure. Model is verified using data on chosen OECD members from period 1970 - 2012. The results of empirical analysis revealed the negative relationship between indirect taxes and economic growth. The most negative impact on economic growth was proven for taxes on consumption. It was observed that the impact of value added tax on economic growth is weaker in comparison with taxes on consumption. Statistically significant impact of tax on property on economic growth wasn't proven.