The Relationship between Household Card Payment Index and Indirect Tax Revenue
Chapter from the book: Ok Ergün, H. & Ergün, T. (eds.) 2025. Current Research in Digital Finance.

Ömer Keskin
Van Yüzüncü Yıl University

Synopsis

While electronic payment systems are developing rapidly in Türkiye and the amount of payments made with bank cards is increasing rapidly, indirect tax revenue, which is one of the main revenue items of the central government budget, is also increasing rapidly. Therefore, investigating the effects of card payments on the increase in indirect tax revenue, which is essential in financing public expenditures in Türkiye, and providing policy recommendations in this context is a noteworthy issue. The present study aims to determine the effects of changes in the Household Card Payment Index on changes in indirect tax revenue. The analysis employs a monthly dataset covering April 2015 to November 2024, applying Fourier-Shin cointegration and Fourier Toda-Yamamoto causality tests. The findings indicate that a 1% increase in the Household Card Payment Index raises indirect tax revenue by approximately 0.91% in the long run and 0.34% in the short run. This positive relationship is further supported by a strong unidirectional causality from the Household Card Payment Index to indirect tax revenue. Based on these findings, it is recommended to implement measures aimed at encouraging broader adoption and habitual use of card payments across society, as well as increasing the number of businesses utilizing new-generation card payment technologies. These steps could significantly enhance indirect tax revenue, which is crucial for financing public expenditures in Türkiye. The study's findings and recommendations are expected to provide valuable insights for policymakers, researchers, and all stakeholders in the Turkish banking sector.

How to cite this book

Keskin, Ö. (2025). The Relationship between Household Card Payment Index and Indirect Tax Revenue. In: Ok Ergün, H. & Ergün, T. (eds.), Current Research in Digital Finance. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub785.c3292

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Published

June 26, 2025

DOI