Do Selected Tax Advantages Affect Tax Revenue from the Personal Income Tax?
Michal Krajnak
Keywords:
Czech Republic, personal income tax, tax income, tax credit, competitiveness
Abstract:
The personal income tax, which has a significant influence on total tax revenue, has been part
of the Czech tax system since 1993. The main objective of this paper is to evaluate the dependence
of tax revenue on the personal income tax based upon a dependent activity related to tax
relief for the taxpayer, namely the tax credit for children in the Czech Republic in the period of
2008 - 2017. Another objective is to analyze the dependence on the valorization of the tax reliefs
and tax credit claims. The database of the Czech Statistical Office and the Ministry of Finance of
the Czech Republic is used as a source of input data for the analysis. To achieve the objectives of
the paper, methods of description, comparison, analysis, synthesis, as well as regression and correlation
analyses are used. The results of the analysis show that the tax credit for children has a
positive effect on tax revenue. The amount of the tax advantage for children has almost doubled
in the last 11 years. On the other hand, general tax relief for all taxpayers has not been valorized
since 2008. The existence of a certain non-taxable minimum is typical for personal income tax
systems around the world tax, and the valorization in the Czech Republic did not show a negative
impact on the tax system’s competitiveness. Increasing the amount of deductions might be
non-effective from the perspective of the state, but the results of this study show that the effect
on personal income tax revenue in the Czech Republic is the opposite. The projected value and
uniqueness of the article is not only in the analysis of dependencies of selected tax allowances
upon each other, but also in the context of tax revenue and selected macroeconomics indicators.
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 Do Selected Tax Advantages Affect Tax Revenue from the Personal Income Tax? [PDF file] [Filesize: 576.84 KB]
 10.7441/joc.2019.04.05
Krajnak, M. (2019). Do Selected Tax Advantages Affect Tax Revenue from the Personal Income Tax?
Journal of Competitiveness, 11(4), 73–88. https://doi.org/10.7441/joc.2019.04.05
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