The Impact of Performance Improvement of the Tax System on the Economic Growth of Developing Countries Based on the Experience of the European Union

Abstract

This study examines the ways to improve and increase the level of efficiency of the tax system based on the analysis of the impact on the performance indicators of socio-economic development of Kazakhstan. The sample for the study is presented according to the financial and statistical data of the Ministry of Finance of the Republic of Kazakhstan. Moreover, secondary data from International Monetary Fund(IMF) reports were used to analyze international trends on the research topic. The additive model is used to analyze the collected data. According to this model, socio-economic development is represented by indicators of the growth rate of real GDP, inflation, unemployment, and the official exchange rate. The study reveals that the absence of the link between the growth of real gross domestic product and fiscal instruments indicates low degree of efficiency of the tax system of the analyzed country. At the same time, the increase in the level of tax audits creates a burden on business development in the form of extra-transactional production costs. In addition, with the active measures of the state to optimize and simplify tax processes, improve the quality of tax administration, the issues of assessing the economic effect of the implementation of the existing tax policy and its role in sustainable socio-economic development remain relevant.