Estimating Tax Revenue Elasticities in Slovakia
| Author: | Mgr. Edita Ďurovčíková |
|---|---|
| Year: | 2017 - summer |
| Leaders: | doc. PhDr. Tomáš Havránek Ph.D. |
| Consultants: | |
| Work type: | Finance, Financial Markets and Banking Masters |
| Language: | English |
| Pages: | 62 |
| Awards and prizes: | |
| Link: | https://is.cuni.cz/webapps/zzp/detail/139672/ |
| Abstract: | To study the effect a change in a tax base has on the corresponding tax revenue is a useful tool to better predict future tax revenues. This property is called a tax revenue elasticity b u t generally it does not get as much attention as it deserves, and when it does, key points like using d ata adjusted for the effects of tax reforms or distinguishing between the short-run (instantaneous) and the long-run (equilibrium) elasticity are often om itted. In my thesis, I am the first one to estim ate the tax revenue elasticities for Slovakia. I use a unique dataset adjusted for the effects of tax reforms and tax changes to estim ate both the short-run and the long-run elasticities for the three tax categories th a t account for the m ajority of each year’s tax revenue - Personal Income Tax, Corporate Income Tax and Value Added Tax. I obtain a long-run elasticity of 0.98, 1.28 and 0.94 for the Personal Income Tax, the Corporate Income Tax and the Value Added Tax respectively and a short-run elasticity of 3.51 and 1.93 for the Corporate Income Tax and the Value Added Tax respectively. I do not obtain a significant estimate in the case of the Personal Income Tax. Additionally, I find th at it takes more than a year for the elasticity to reach its equilibrium value for all the three tax categories and th at there is an asymmetric behaviour of the short-run elasticity according to the amount of the tax revenue in the case of the Corporate Income Tax. |
