Lowering tax levels: where does the money go?

Hi everyone,

I have a little question. Yesterday, I lowered the corporate tax level from 10% to 8%. However, the corporate tax income of my country declined from about 1,700M to 0, and after a few months it increased again to about 370M. If I reduce the tax rate from 10% to 8%, should the corporate tax income not be somewhere around 1,360M?


Dominik

Collected taxes are depended on the sales of goods/services from the corporations located in your nation. Corporation produce every month but are not always selling the goods straight away, depending on supply/demand on the market (and trade strategies).

Your logic is sound, however, you need to have a bigger data-sample. Over the course of years it while be correct, lowering taxes with 2 % will reduce your income from taxes linearly.

Thanks for the quick reply!

The disappearance of corporate tax income occurred more often after a tax rate reduction. I wondered why, because in general all companies in my country sell their products every month. But good to hear the income level will be corrected over the course of time ^^