DOI: https://doi.org/10.36719/2706-6185/63/155-174
The Impact of Macroeconomic Determinants (Inflation, Economic Growth, and Trade Openness) on Tax Revenue in Algeria: An Empirical OLS Analysis (2000–2024)
Belaoudja Hassina 
Abstract. Tax revenue plays a central role in ensuring fiscal sustainability, yet empirical evidence on the macroeconomic factors shaping tax revenue performance in Algeria remains limited. This study aims to examine the effects of inflation, economic growth, and trade openness on tax revenue in Algeria over the period 2000–2024. Using annual time-series data, the analysis employs the Ordinary Least Squares (OLS) method to estimate the relationship between these macroeconomic variables and tax revenue measured as a percentage of Gross Domestic Product (GDP). The estimated model is statistically significant and explains approximately 48% of the variation in tax revenue. The findings indicate that inflation has a positive and statistically significant effect on tax revenue, whereas GDP growth is associated with a statistically significant negative effect. By contrast, the estimated effect of trade openness is negative but not statistically significant. The negative association between GDP growth and tax revenue may reflect the structure of the Algerian economy, where economic expansion has been largely driven by the hydrocarbon sector without generating a proportional increase in non-hydrocarbon tax revenues. These results suggest that strengthening tax performance requires more than sustaining economic growth alone. Expanding the effective tax base, improving tax administration through digitalization, and supporting economic diversification are likely to enhance domestic revenue mobilization and reduce dependence on hydrocarbon revenues. The study contributes to the literature by providing updated empirical evidence on the macroeconomic determinants of tax revenue in Algeria and offers practical insights for policymakers seeking to strengthen fiscal sustainability.
Keywords: tax revenue, inflation, economic crowth, trade openness, Algeria