Non-tax revenue in the European Union: A source of fiscal risk?
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Despite its relevance for fiscal policy, non-tax revenue is only defined by exclusion and it is an area that has been scarcely studied for developed economies. This study is an attempt to provide an analysis of this relevant component of government revenue, using comparable national accounts data. It assesses the size, composition and volatility of non-tax revenue in the European Union, and it explores, by means of panel data analysis, whether macroeconomic and fiscal conditions can explain the observed heterogeneity in non-tax revenue across the Member States. We also find that the relative variability of non-tax revenue is around three times higher than that of tax revenue, being a significant source of fiscal risk that is often overlooked.
KeywordsFiscal policy risk Government revenue European Union
JEL ClassificationE62 H27
We would like to thank the Editor-in-Chief, Ron Davies, and two anonymous referees, for helpful comments that improved the paper. We also thank Lucio Pench and Ingrid Toming for their valuable comments on an earlier draft of the paper. The views expressed herein are the views of the authors only and may not, under any circumstances, be interpreted as stating an official position of the European Commission or the Université libre de Bruxelles.
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