Abstract:

Contemporary economic literature frequently deals with the issue of fiscal policy variables effect on the economic growth. Nevertheless, their volatility remains almost omitted. The aim of this paper is thus to describe the effect of taxation on long-term economic growth with a special emphasis on the impact of tax uncertainty. In addition, the taxation is measured not only using a standard tax quota, but also an alternative World Tax Index (WTI). When it is used the tax quota a positive influence on growth was proved, contradicting the theoretical assumptions. The use of the WTI led to results consistent with theory and showed that the impact of tax uncertainty on economic growth is negative.