The best tool that can be used to raise the economic competitiveness is tax policy. It balances public finances and impacts the population's GDP. Given that every country has its soverignity over its tax system, EU must provide measures that ensure tax compliance.
In Slovenia, a general opinion is that there is an excessive tax burden, especially in the taxation of labour. The purpuse of my master thesis is to analyse tax policy that is suppossedly has an effect on economic growth. The main objective is to present the measures Slovenia adopted to raise the competitiveness, and compare them to the reactions of Icelandic, which achived fiscal surplus and Greece, on the other hand, that after being counseled by the Troika, adopted measures that were too rigorous.
My thesis is based on the statement that tax policy contribues to a faster economic growth and economic competitiveness and that it improves tax system which has to be clear, flexible, simple and transparent. It states three hypothesis. The first deals with the impact of tax burden on economic growth, while the other two are related to the importance of tax system reform and their consistency with EU legislation, concerning the rise of economic growth.
The results of my thesis show the effects of taxes on the costs of labour, which consequently effects the economy as it decreases the import, export and investment. The measures EU has adopted strive to greater progressivness due to a fairer distribution of tax burden. A lot of these measures were adopted to prevent tax evasion and fraud, and to increase inflows and tax revenues.
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