Journal of Tax Reform | 2026
Authors: Kerroum N.; Tahtah H.; Mkaddem Z.B.; Kerroum W.
DOI: 10.15826/jtr.2026.12.2.256
Journal: Journal of Tax Reform
Year: 2026
Publisher: Ural Federal University
Document Type: Article
Open Access: All Open Access; Gold Open Access
Cited by: 0
This study examines how the expansion of the digital economy reshapes tax equity between developed and developing countries within the framework of international taxation. While existing research has largely focused on digitalization and tax policy reforms separately, limited empirical attention has been paid to their dynamic interaction and distributional consequences across countries at different levels of development. Addressing this gap, the paper develops a comparative empirical analysis based on a Panel Vector Autoregression (PVAR) model applied to a balanced panel of 20 countries (10 developed and 10 developing) over the period 2000–2023. The analysis incorporates tax revenue (% of GDP) and the Gini index as proxies for fiscal capacity and distributive equity, as well as indicators of digitalization, including internet usage and fixed broadband subscriptions. The results reveal that digitalization exerts heterogeneous and predominantly short-run effects on tax performance and income inequality. In developed economies, digital infrastructure contributes to improved tax revenue mobilization and gradual reduction of inequality, reflecting stronger institutional capacity and regulatory effectiveness. In contrast, in developing countries, increased internet penetration is associated with greater tax volatility and widening disparities, highlighting structural constraints in taxing digital activities and enforcing compliance. The findings further demonstrate the absence of a stable long-run relationship among the variables, emphasizing the importance of short-term dynamics and institutional conditions. By integrating digitalization into the analysis of tax equity, the study contributes to the literature by providing novel empirical evidence on the asymmetric fiscal effects of the digital transition. The results underscore the need for coordinated international tax policies and strengthened domestic institutions to ensure a more equitable distribution of tax revenues in the digital era. © Kerroum N., Tahtah H., Mkaddem Z.B., Kerroum W., 2026.
digital economy; digitalization; fiscal inequality; international taxation; panel VAR (PVAR); tax equity; tax revenue