Regional Formation and Development Studies

This study explores the determinants of tax revenue in eight post-transition European Union (EU) economies: Estonia, Latvia, Lithuania, Poland, Czechia, Slovakia, Slovenia and Hungary. Despite the shared institutional trajectories and simultaneous EU accession in 2004, these countries continue to display significant variation in tax-to-GDP ratios. Using panel data from 2004 to 2022, and applying a fixed effects model with Driscoll-Kraay standard errors, the study examines key macroeconomic and structural variables shaping tax revenue outcomes. The results indicate that financial inclusion and openness to trade proxied by debit card usage are positively associated with tax revenue, while rising public debt has a significant negative effect. Other variables, including foreign direct investment and inflation, show weaker or model-dependent relationships. The findings highlight the role of the financial infrastructure and macroeconomic openness in explaining tax revenue performance in post-transition economies. The paper contributes to the literature by offering region-specific empirical evidence and informing fiscal policy in structurally evolving EU member states.