Exploring the Tax Revenue–Economic Development Nexus in Iraq During 2014–2019: Evidence from World Bank and Maddison Project Data

Abstract

This study examines the relationship between tax revenue and economic development in Iraq during 2014–2019, using annual indicators of tax revenue as a share of GDP, GDP per capita, GDP growth, population, estimated tax revenue per capita, and estimated total tax revenue. The period is restricted to 2014–2019 because complete tax revenue observations for Iraq are available only for these years in the dataset used for the analysis. The study applies descriptive statistics, trend analysis, Pearson correlations, and simple OLS regressions to explore whether changes in taxation were associated with selected development indicators. The findings show that Iraq’s tax revenue remained low and unstable, rising from 0.91% of GDP in 2014 to a peak of 2.69% in 2017 before declining to 1.34% in 2019. GDP per capita, measured in current US dollars, declined during the period, while GDP per capita, measured in purchasing-power-parity terms, increased, indicating that conclusions depend partly on the development measure used. Correlation and regression results suggest weak and measurement-sensitive associations between taxation and economic development indicators. The evidence, therefore, supports a cautious interpretation: Iraq showed limited and unstable tax capacity during 2014–2019, and economic growth did not automatically translate into sustained domestic revenue mobilization. The results highlight the importance of strengthening tax administration, widening the tax base, improving compliance, and reducing dependence on volatile revenue sources.