What is real tax burden in Slovakia?
|Year of publication||2021|
|Type||Article in Proceedings|
|Conference||Hradec Economic Days|
|MU Faculty or unit|
|Keywords||tax burden; World Tax Index (WTI); tax quota; factor analysis; PCA; Slovakia|
|Description||Taxes are the main fiscal instrument and essential part of economy. Every government needs to collect them to fund its spending, but also needs to find the right balance to minimize their negative distortion effects. This paper investigates the real tax burden in Slovakia using modified World Tax Index (WTI). It is a multi-criteria indicator of overall tax burdens created for OECD countries and constructed as a combination of hard tax data weighted based on factor analysis by soft data, which are gathered through an online questionnaire among tax specialists. WTI eliminates the influence of GDP and does not overestimate the tax burden as other indicators. Results for Slovakia suggest that personal income taxes have the greatest impact, followed by corporate income taxes, property taxes and other taxes on consumption/excise taxes. The lowest tax burden is created by the value-added tax. The results recommend to decrease labor income taxes that had increasing trend over investigated period.|