Effective tax and shadow price calculations for Turkey

Abstract

When Turkish government imposes taxes on commodities, particularly import duties and excise taxes, their burden will also fall on inputs. In this thesis, we have two main objectives. First one is to develop a model for Turkish Economy so as to find a set of taxes for Turkey, which we call effective taxes, so that an increase in the effective tax corresponds to an increase in the price of the final good. And then, we will calculate the values of effective taxes for the sectors of Turkish Economy. One also want to know whether a sector of Turkish Economy is socially profitable or not. To answer this question, we have to know shadow prices. My second objective is to calculate social profitability, so that we can classify each sector of Turkish Economy as socially profitable or not, by using Shadow Prices.