Measuring the optimal size of indirect taxes as a percentage of total revenues from the perspective of the Laffer curve and stimulating GDP in the Iraqi economy.

Abstract

The research aims "to measure the optimum Size of indirect taxes as a proportion of total revenues with the Laffer curve perspective stimulating GDP in the Iraqi economy" The main purpose of this study is to test whether there is an inverted U-shaped relationship between indirect taxes as a proportion of total revenues or not. and the optimization of indirect taxes, theoretically The basic logic behind the Laffer curve is that the relationship between taxes and GDP is positive up to the point where the optimum Size of indirect taxes reaches its maximum. And then the relationship becomes negative, according to laffer, the optimal level of taxes as a proportion of total revenues in the Iraqi economy was 11.4. The empirical results show that the current share of total revenues is less than the optimal size of taxes in Iraq and for all Research years. (Tax/Total Revenue, tax/total Revenue2) and the dependent variable (GDP) This relationship is governed by two directions: first, there is a positive relationship between them at the beginning and after reaching the optimal threshold of the size of Indirect taxes, which is maximized by the GDP rates due to tax increases, and then another stage in which the relationship is negative, influenced by the quadratic form of taxes as a proportion of total and subordinate income, after the threshold of the optimal Size of indirect taxes and lower GDP rates. The research recommended that fiscal policymakers rationalize taxes to no greater than the optimal size of 11.4%.