1. Introduction The history of human development has shown that taxes are essential, as they are related to the

2.2. Objectives of taxation
The primary goal of taxation is to generate income to cover government expenditures as well as to
redistribute wealth and control economic activities (Jhingan, 2004). According to Anyanwu (1993),
taxes have three primary goals: raising money for the government, regulating the economy and
economic activity, and controlling income and employment. According to Nzotta (2007), taxes play
a role in allocation, distribution, and stabilization. The allocation function of taxes consists of determining the pattern of production, the items that should be produced, who produces them, the
connection between the private and public sectors, and the social balance between the two sectors
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(Ojong et al., 2016). The distribution function of taxes refers to how the effective demand for economic
products is distributed across people in society. The stabilization function of taxes tries to achieve
a high level of employment, a tolerable degree of price stability, and an adequate pace of economic
growth, while accounting for trade and balance-of-payments consequences (Ojong et al., 2016).
According to Nwezeaku (2005), the extent of these tasks is determined by the people’s political and
economic orientation, their wants and ambitions, and their willingness to pay taxes. Therefore, the
amount to which a government can carry out its responsibilities is mainly determined by its capacity to
establish and administer a tax system, as well as the desire and patriotism of the governed.
2.3. Overview of previous empirical studies
In most countries, especially middle-income countries, taxes account for a high proportion of
a government’s budgetary revenue. Considerations of the impact of tax revenue is a topic that
interests many scholars. Researchers have conducted studies on different countries or regions
using various methods.
In a study of tax collection trends in 30 developing countries from 1953–1955 to 1966–1968,
Chelliah (1971) analyzed statistics for tax system in more than 30 countries in the 1966–1968 periods. The results show that (1) the proportion of mining in gdp and the proportion of exports
without mining had a positive impact on tax revenue; (2) the proportion of agriculture had
a negative impact; (3) higher per capita income resulted in a higher level of development and
a higher ability to pay taxes. However, this study does not find a statistically significant effect of
per capita income on tax revenue.
In a study of tax indexes and tax development efforts in 47 developing countries in 1969–1971,
Chelliah et al. (1975) used regression analysis to quantify the impact of various factors on tax
revenue. The results indicate that (1) the proportion of mining in GDP had a positive impact on tax
revenue; (2) the proportion of agriculture had a negative impact; (3) the share of trade, per capita
income (without exports), and exports (without mining) do not affect tax revenue.
Baunsgaard and Keen (2010) studied the impact of globalization on tax revenue. Employing
panel data for 117 countries over a period of 32 years, the results show that trade has a positive
impact on tax revenue because of taxes on imports. Moreover, as trade expands, the credibility
and competitiveness of the economy increases, which makes tax collection easier.
Profeta and Scabrosetti (2010) analyzed the determinants of tax revenue in the period 1990–2004
in 39 countries: 11 Asian countries, 19 Latin American countries, and 9 members of the European
Union. Their research shows that GDP per capita and the debt-to-GDP ratio were not significant in
determining tax revenues in Asian economies but had a positive impact in Latin American countries.
The share of agriculture in GDP negatively affected tax revenue in Latin America but was not
significant in Asia; the openness of the economy had a positive impact on tax revenue in Asia and
Europe but a negative impact in Latin America. The higher the indexes of democratic rights, civil
liberties, and political rights were, the greater the increase in efficiency in the tax system. The
education level in Latin American countries, the proportion of the over-65 population, the percentage
of female labor, and the size of the underground economy had a positive and significant impact on
tax revenue whereas population density did not have any impact. In Asia, the variables for the high
school graduation rate and the proportion of the urban population had no impact, but the proportion
of the over-65 population had a significantly negative impact on tax revenue.
Dioda (2012) used a panel data regression method to determine the determinants of tax
revenue in 32 countries in Latin America and the Caribbean in the period 1990–2009. The research
results indicate that civil liberties, the number of female workers, political stability, the education
Minh Ha et al., Cogent Economics & Finance (2022), 10: 2026660