Government expense, tax revenue and total tax rate effects on GDP/ Shelly Shariza Hamzah

This study provides evidence on the role of government expense, tax revenue and total tax rate for economic growth in selected Asian countries. Some researcher found positive relationship between government expense and growth, while others indicated that growth caused government spending to expand (Jiranyakul, 2007). Twenty-two states still collect less tax revenue than at their recession-era peaks, after adjusting for inflation, and most have a thinner financial cushion than they did before the last downturn (States' Fiscal Health, 2018). Issue that arise on total tax rate are the effects of an ageing population and the willingness of society to pay taxes especially to those who have gained from economic growth to support the less well-off is quite critical (Bosquet, 2000). However, the studies were mostly done pre and post crisis but only a few were done looking to be specific in the view of selected Asian countries which are Malaysia, China and Thailand. Thus, in this paper the researcher wants to study the relationship between government expense, tax revenue and total tax rate towards GDP as a proxy of economic growth. me results of the study are government expense, tax revenue and total tax rate have positive relationship towards Gross Domestic Product (GDP).