IDEAS home Printed from https://ideas.repec.org/a/ipf/finteo/v36y2012i3p245-267.html
   My bibliography  Save this article

Effect of expenditures in personal income taxation on horizontal equity in Croatia

Author

Listed:
  • Hrvoje Simovic

    (University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia)

Abstract

Tax expenditures include all reliefs and other tax procedures used for reducing or deducting the amount of tax that would otherwise have to be paid by taxpayers. There are many personal income tax expenditures in Croatia and they represent an important segment of the tax and social policies. This paper analyses the effect of expenditures in personal income taxation in Croatia on horizontal equity. Accordingly, the analysis has been made according to sources of income. The paper includes the period since 2001, when most reliefs that are still in effect were introduced into the personal income tax system. The analysis includes only those taxpayers who filed annual personal income tax returns, which is a precondition for acquiring most of the tax reliefs. The research findings show that tax reliefs significantly reduce the amount of taxable income, and the differences in the effective tax burden between the analyzed sources of income show that there is horizontal inequity in the personal income tax in Croatia.

Suggested Citation

  • Hrvoje Simovic, 2012. "Effect of expenditures in personal income taxation on horizontal equity in Croatia," Financial Theory and Practice, Institute of Public Finance, vol. 36(3), pages 245-267.
    • Handle: RePEc:ipf:finteo:v:36:y:2012:i:3:p:245-267
    as

    Download full text from publisher

    File URL: http://www.ijf.hr/upload/files/file/FTP/2012/3/simovic.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Timm Bönke & Sebastian Eichfelder, 2010. "Horizontal Equity in the German Tax-Benefit System: A Simulation Approach for Employees," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(3), pages 295-331, September.
    2. Mitja Cok & Ivica Urban, 2007. "Distribution of Income and Taxes in Slovenia and Croatia," Post-Communist Economies, Taylor & Francis Journals, vol. 19(3), pages 299-316.
    3. Jean-Yves Duclos & Abdelkrim Araar, 2006. "Poverty and Equity," Economic Studies in Inequality, Social Exclusion, and Well-Being, Springer, number 978-0-387-33318-2, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ivica Urban, 2006. "Progressivity of personal income tax in Croatia: decomposition of tax base and rate effects," Financial Theory and Practice, Institute of Public Finance, vol. 30(3), pages 207-231.
    2. Duclos, Jean-Yves, 2006. "Liberté ou égalité?," L'Actualité Economique, Société Canadienne de Science Economique, vol. 82(4), pages 441-476, décembre.
    3. Manos Matsaganis & Chrysa Leventi, 2011. "The distributional impact of the crisis in Greece," DEOS Working Papers 1124, Athens University of Economics and Business.
    4. Nora Lustig, 2017. "Fiscal Policy, Income Redistribution and Poverty Reduction in Low and Middle Income Countries," Commitment to Equity (CEQ) Working Paper Series 54, Tulane University, Department of Economics.
    5. Alkire, Sabina & Santos, Maria Emma, 2014. "Measuring Acute Poverty in the Developing World: Robustness and Scope of the Multidimensional Poverty Index," World Development, Elsevier, vol. 59(C), pages 251-274.
    6. Richard Mussa, 2013. "Spatial Comparisons of Poverty and Inequality in Living Standards in Malawi," South African Journal of Economics, Economic Society of South Africa, vol. 81(2), pages 192-210, June.
    7. Ragui Assaad & Caroline Krafft & John Roemer & Djavad Salehi-Isfahani, 2016. "Inequality of Opportunity in Income and Consumption: the Middle East and North Africa Region in Comparative Perspective," Working Papers 1003, Economic Research Forum, revised May 2016.
    8. Dorrit Posel & Michael Rogan, 2012. "Gendered trends in poverty in the post-apartheid period, 1997--2006," Development Southern Africa, Taylor & Francis Journals, vol. 29(1), pages 97-113, March.
    9. Tim Goedemé & Karel Van den Bosch & Lina Salanauskaite & Gerlinde Verbist, 2013. "Testing the Statistical Significance of Microsimulation Results: Often Easier than You Think. A Technical Note," ImPRovE Working Papers 13/10, Herman Deleeck Centre for Social Policy, University of Antwerp.
    10. Jean-Yves Duclos & Paul Makdissi & Abdelkrim Araar, 2009. "Pro-Poor Tax reforms, with an Application to Mexico," Working Papers 0907E, University of Ottawa, Department of Economics.
    11. Nora Lustig, 2016. "Fiscal policy, inequality and the poor in the developing world," Working Papers 418, ECINEQ, Society for the Study of Economic Inequality.
    12. Ivica Urban, 2009. "Kakwani decomposition of redistributive effect: Origins, critics and upgrades," Working Papers 148, ECINEQ, Society for the Study of Economic Inequality.
    13. Wen-Hao Chen & Jean-Yves Duclos, 2011. "Testing for poverty dominance: an application to Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 44(3), pages 781-803, August.
    14. Aleksandr V. Gevorkyan & Jacob Assa, 2021. "Poverty in “Transition”: 30 Years After and in the Pandemic," American Journal of Economics and Sociology, Wiley Blackwell, vol. 80(4), pages 1233-1258, September.
    15. Marko Ledić & Ivica Rubil & Ivica Urban, 2023. "Tax progressivity and social welfare with a continuum of inequality views," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(5), pages 1266-1296, October.
    16. Bönke, Timm & Kemptner, Daniel & Lüthen, Holger, 2018. "Effectiveness of early retirement disincentives: Individual welfare, distributional and fiscal implications," Labour Economics, Elsevier, vol. 51(C), pages 25-37.
    17. Michal Brzezinski, 2015. "Accounting for trends in health poverty: a decomposition analysis for Britain, 1991–2008," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(2), pages 153-159, March.
    18. Asma Boussetta, 2022. "Microfinance, Poverty and Education," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(1), pages 86-108, March.
    19. Mawuli Gaddah & Alistair Munro & Peter Quartey, 2015. "The rich or the poor: who gains from public education spending in Ghana?," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 42(2), pages 112-131, February.
    20. Jane Kabubo-Mariara & Anthony Wambugu & Susan Musau, 2011. "Multidimensional Poverty in Kenya: Analysis of Maternal and Child Wellbeing," Working Papers PMMA 2011-12, PEP-PMMA.

    More about this item

    Keywords

    personal income tax; annual tax return; tax expenditures; reliefs; horizontal equity; Croatia;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ipf:finteo:v:36:y:2012:i:3:p:245-267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Martina Fabris (email available below). General contact details of provider: https://edirc.repec.org/data/ijfffhr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.