The Relationship between Tax Structure and Economic Growth in Turkey Abstract

It is theoretically possible to talk about the mutual relationship between taxation as a means of fiscal policyand economic growth.While economic growth can affect tax revenue by expanding the tax base; the change in taxes can also affect economic growth through national income dynamics. However, this theoretical acceptance must be tested empirically. For this reason, our study has tested the relationship between the tax types that compose the tax structure and economic growth for Turkey’s 1980-2015 period, using the Granger, Toda-Yamamoto and Breitung-Candelon Frequency Domain causality tests.The results indicate the existence of a long run relationship between total tax revenues, indirect taxes, direct taxes, income taxes and economic growth. On the other hand, the findings have shown that there exists a causal relationship between total tax revenues, indirect taxes, income taxes and economic growth