Tax Flexibility as an Adaptive Fiscal Policy Instrument in Responding to Global Economic Crises

Abstract

This study aims to analyze the role of tax flexibility as an adaptive fiscal policy instrument in addressing increasingly complex global economic crises. The research employs a Systematic Literature Review approach, examining scholarly publications from the last five years that explore the interrelationship between fiscal policy, tax flexibility, and macroeconomic stability. The findings indicate that tax flexibility serves as a strategic automatic stabilizer, enabling governments to balance fiscal policies during both recessionary and expansionary phases. Moreover, flexible taxation plays a vital role in expanding fiscal space, strengthening government revenue capacity, promoting digital transformation in tax administration, and supporting sustainable green fiscal reforms. The study also highlights that tax flexibility should not be viewed merely as a short-term or reactive policy measure but rather as a proactive, equitable, and long-term component of modern fiscal governance. By integrating adaptability, fiscal discipline, and social justice, flexible tax policy enhances national economic resilience, maintains fiscal sustainability, and reinforces the foundation for inclusive and future-oriented public policy in an era of persistent global uncertainty.