Contents |
Authors:
Iaryna Samusevych, PhD, Assistant of the Department of Accounting and Taxation, Sumy State University, Ukraine
Ali Shamaelh, Head of Revenue Department, Financial Affairs Administration, Ministry of Foreign Affairs and Expatriates, Amman, Jordan
Pages: 55-64
DOI: 10.21272/fmir.1(3).55-64.2017
Download: |
Views: |
Downloads: |
|
|
|
Abstract
The strategy of reforming the country’s tax system should consider the real effect that taxpayers receive in response to their tax payments, that is, the level of financing public services. The article formalizes the links between the tax burden and financing public services since multifactor dependencies using the panel regression method with fixed effects for Ukraine and 10 countries – its tax competitors (Bulgaria, Georgia, Latvia, Lithuania, Romania, the Czech Republic, Estonia, Slovakia, Moldova, Serbia).
Based on the calculations, it was found that the existing level of tax burden in Ukraine is overstated, while the optimal level in 2012 was: 1) the total tax burden – 14.39-18.09% of GDP; 2) the burden on legal entities – 45.99-48.32% of the profits of enterprises; 3) the burden on individuals – 11.92-28.75% of wages. These values correspond to the actual amounts of government spendings on financing public services.
Keywords: tax burden, optimal level, financing, public services, competitiveness, tax competition.
JEL Classification: H20.
Cite as: Samusevych I., Shamaelh, A. (2017). The Relationship Between the Tax Burden and Financing Public Services: A Comparison of Ukraine and European Countries. Financial Markets, Institutions and Risks, 1(3), 55-64. DOI: 10.21272/fmir.1(3).55-64.2017
References
- Baldwin, R., Forslid, R. (2002). Tax competition and the nature of capital. London, Centre for Economic Policy Research, 9 p.
- Batina, R., Ihori, T. (2005). Public Goods: Theories and Evidence. Springer, 420 p.
- Collecting Taxes [Electronic source] / USAID Database. – Access mode: https://egateg.usaid.gov/collecting-taxes/.
- Delgado, F. J. (2013). Are Taxes Converging in Europe? Trends and Some Insights into the Effects of Economic Crisis. Journal of Global Economics, 1(1), 24-26.
- Feld, L. (2005). Tax Competition: How Great is the Challenge? EKONOMSKI PREGLED, 56(9), 723-758.
- Ferreira, S., Varsano, R., Afonso, J. (2005). Inter-Jurisdictional Fiscal Competition: a Review of the Litterature and Policy Recommendations. Political Economy, 25(3), 295-313.
- Field, T. (2003). Tax Competition in Europe and America. State Tax Notes, 98(14), 1211-1216.
- Gilardi, F., Wasserfallen, F. (2012). How socialization attenuates tax competition [Electronic source]. – Access mode: http://www.researchgate.net/publication/228431133_How_socialization_attenuates_tax_competition.
- Goodspeed, T. (1998). Tax Competition, Benefit Taxes and Fiscal Federalism. National Tax Journal, 51(3), 579-586.
- Gordon, R., Wilson, G. (2002). Expenditure Competition [Electronic source]. – Access mode: http://www.econ.ucsd.edu/~rogordon/zoning6.pdf.
- Griffith, R. Klemm, A. (2004). What Has Been the Tax Competition Experience of The Last 20 Years? Institute for Fiscal Studies and University College London Working Paper, No. 5, 33 p.
- Kleiner, N. (2006). Is Systems Competition a Viable Alternative to EU Tax Harmonisation? Master Thesis, Haifa University, 54 p.
- KPMG Annual Survey of Tax Competitiveness 2014 [Electronic source] / KPMG official web-site in United Kingdom. – Access mode: http://www.kpmg.com/UK/en/services/Tax/Pages/default.aspx.
- Libman, A. M. (2007). Distribution of Tax Revenues and Tax Authorities in Conditions of Tax Competition. Taxes and Taxation, 6, 23-34.
- Mitchell, D., Fellow, S. (2013). OECD Launches New Effort to Undermine Tax Competition. Cato Institute Tax & Budget Bulletin, 68, 12-13.
- Oates, W., Schwab, R. (1998). Economic Competition Among Jurisdictions: Efficiency Enhancing or Distortion Inducing? Journal of Public Economics, 35, 333-354.
- Pinto, C. (2002). Tax Competition and EU Law. The Hague-London-New York: Kluwer Law International, 435 p.
- Razin, A., Sadka, E. (1989). International Tax Competition and Gains from Tax Harmonization. National Bureau of Economic Research Working Paper, 3152, 25 p.
- Rohac, D. (2006). Evidence and Myths about Tax Competition. New Perspectives on Political Economy, 2(2), 86-115.
- Statistics of Public Expenditure for Economic Development [Electronic source] / International Food Policy Research Institute. – Access mode : http://www.ifpri.org/publication/public-expenditure-database.
- Taxation trends in the European Union [Electronic source] / European Commission, 2014. – Access mode: http://ec.europa.eu/taxation_customs/taxation/gen_info/economic_analysis/tax_structures/index_en.htm.
- Teather, R. (2005). The Benefits of Tax Competition. The Institute of Economic Affairs, 167 p.
- The World Bank : official web-page [Electronic resource]. – Access mode: http://data.worldbank.org/indicator.
- Tiebout, C. (1956). A Pure Theory of Local Expenditure. Journal of Political Economy, 64(5), 416-424.
- Vasylieva, T., Sysoyeva, L., Samusevych, I. (2014). Tax integration in European countries: development and consequences. European Science Review, 11-12, 103-105.
- Wildasin, D. (1988). Nash Equilibria in Models of Fiscal Competition. Journal of Public Economics, 35(2), 229-240.
- Wilson, J. (1991). Tax Competition with Interregional Differences in Factor Endowments. Regional Science and Urban Economics, 21, 423-451.
- Zodrow, G., Mieszkowski, P. (1986). Property taxation and the underprovision of local public goods. Journal of Urban Economic, 19, 356-370.
|