The Impact of Macroeconomic Variables Towards Tax Revenue in Malaysia : Time Series Data

Abstract

This study is to investigate the impact of macroeconomic variables such as Population, Gross Domestic Product, Inflation Rate, Unemployment Rate, Import and Export towards Tax Revenue in Malaysia. The study use a time series data for over the period of 1976 to 2015. The data then will be analyse using E-Views 12. Augmented-Dickey Fuller (ADF) & Philips Perron (PP) Unit Root Test, Johansen-Juselius Cointegration Analysis and Granger Causality Test (VECM) were used to run the data. The findings reveal that macroeconomic variables such as inflation and export have a positive impact towards tax revenue. However, import and unemployment have a negative impact towards tax revenue. The study recommends government and policy makers shall take appropriate steps to improve on fiscal and monetary policies.