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Effects Of Personal Income Tax On Income Distribution: Example From Bulgaria

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  • FAREED M. A. HASSAN
  • ŽELJKO BOGETIĆ

Abstract

This study utilizes the 1992 Bulgarian household budget survey to analyze the distribution of income and income tax burden. Results indicate that the country is characterized by low income inequality, though this is changing rapidly. The findings also show that the present income tax system is progressive and that the urban sector pays much more relative to its income. Despite a steeply graduated statutory tax rate schedule, effective progression is rather modest, indicating significant tax evasion. However, one must view the results of progressivity and urban bias cautiously. As in‐kind income becomes monetized and as the economy becomes more market‐oriented, both progressivity and urban/rural differences will wane over time.

Suggested Citation

  • Fareed M. A. Hassan & Željko Bogetić, 1996. "Effects Of Personal Income Tax On Income Distribution: Example From Bulgaria," Contemporary Economic Policy, Western Economic Association International, vol. 14(4), pages 17-28, October.
    • Handle: RePEc:bla:coecpo:v:14:y:1996:i:4:p:17-28
    DOI: 10.1111/j.1465-7287.1996.tb00630.x
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    References listed on IDEAS

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    Cited by:

    1. Micklewright, John & Klugman, Jeni & Redmond, Gerry, 2002. "Poverty in the Transition: Social Expenditures and the Working-Age Poor," CEPR Discussion Papers 3389, C.E.P.R. Discussion Papers.
    2. Chu, Ke-young & Davoodi, Hamid & Gupta, Sanjeev, 2003. "Income distribution and tax, and government social spending policies in developing countries," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34918, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Zeljko Bogetic & Fareed Hassan, 2005. "Personal Income Tax Reform and Revenue Potential in Transition," Public Economics 0510003, University Library of Munich, Germany.
    4. Hassan, Fareed M. A., 1998. "Revenue-productive income tax structures and tax reforms in emerging market economies - evidence from Bulgaria," Policy Research Working Paper Series 1927, The World Bank.

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