Publication details

Is a Only One Share Tax the Solution for Local Self-Governments ?



Year of publication 2022
Type Article in Proceedings
Conference Procesne orientovaný manažment finančnej správy so zameraním na odhaľovanie daňových únikov
MU Faculty or unit

Faculty of Economics and Administration

Keywords Fiscal autonomy; Local self-government; Share tax; Financing of local self-government
Attached files
Description Although fiscal decentralization has taken place in Slovakia, there is still no complete autonomy of local self-government financing. There is only one share tax allocated to municipal budgets - personal income tax. The expected progress of this tax gradually increased the revenues base of municipalities. However, in bad economic times, the revenues from this tax decreases, which has a negative effect on the revenues from the tax redistributed to the level of local self-governments. That is why there are also opinions as to whether a mix of taxes would be more appropriate than a one shared tax. In this context, the aim of paper is the evaluation of the development of share tax revenues in the time period 2009-2021. The mentioned period also includes crisis periods (economic crisis, Covid-19 pandemic). We obtained the data from the Ministry of Finance of the Slovak Republic. The analysis showed that the volume of personal income tax has a significant impact on the tax revenues of local self-governments in times of crisis. This was fully manifested during the economic crisis, when in 2009 the resolution of the Government of the Slovak Republic No. 868 of December 2, 2009, an extraordinary subsidy from the state budget of the Slovak Republic in the amount of 100 mill. € provided to municipalities, to cover the shortfall in personal income tax to improve their situation in 2010. In the time period from 2009 to 2011, the share of yield from personal income tax on the tax revenues of municipalities ranged from 70.02 % to 79.43 %.

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