Abstract
Taxation is the method used by the government to levy money from people, businesses, companies, and other sources of income. The aim of this study is to investigate any possible relationship between taxation and economic progress in the United Kingdom. In this study, gross domestic product is the dependent variable since it serves as a gauge of economic growth while the value of tax receipts and the tax burden are the main independent variables, while unemployment and inflation act as control factors. The secondary data from the World Bank development indicators for the years 2000–2022 were subjected to analysis. Quantitative research methods, such as correlation analysis, OLS regression modelling, and descriptive statistics, were used to evaluate the secondary data that were obtained for the study. The analysis’s findings, which made use of a regression model, show a strong linear relationship between taxation and economic growth in the UK. More proof that tax revenues have a major and favorable impact on the UK’s economic growth comes from the regression model. The Pearson correlation analysis’s findings show a substantial and favorable link between tax collections and the growth of the British economy. Thus, in order to ensure long-term economic stability, the UK government needs to adopt a financially responsible plan that increases tax collection significantly.
Keywords: Economic Growth, Pearson Correlation, Regression Model, Taxation.