VISION: Journal of Indian Taxation
Year : 2014, Volume : 1, Issue : 2
First page : ( 85) Last page : ( 94)
Print ISSN : 2347-4475. Online ISSN : 2395-2571.

Buoyancy and Elasticity of Tax Revenue: Measurement Techniques

Akhtar S. M. Jawed

Associate Professor, Department of Economics, Aligarh Muslim University

Online published on 6 February, 2018.

Abstract

High degree of responsiveness of tax yield to changes in national income is a desirable characteristic of any tax system. If a government depends on tax revenue to finance a large part of its expenditure then it is necessary to ensure that an increasing proportion of national income flows into the public treasury as taxes. In other words, the requirement is to increase the incremental tax ratio. Computation of tax buoyancy and elasticity becomes relevant in this context. This paper explains the concepts of buoyancy and elasticity of tax revenue and describes the various methods to compute them.

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Keywords

Buoyancy, Elasticity, Tax yield.

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