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Personal And Corporate Income Taxes As Sources Of Local Revenues - Opportunities And Challenges

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  • Lyudmil Naydenov

    (University of Economics)

Abstract

The policy of expanding the tax powers of local authorities leads to the optimisation of vertical financial relations in the public sector and improved economic efficiency and public well-being. Within the context of decentralization (administrative and fiscal one, in particular), regional structures should be equipped with access to profitable revenue-generating tax sources. The paper focuses on the applicability of personal income taxes and corporate taxes at a local level. The pros and cons of using the two types of taxes as sources of revenues to municipalities are analysed, the practice of different countries around the world in the sphrere is reviewed, and, based on those, the author proposes the thesis that taxes on labour incomes should be approached as local or parallel taxes, while there are no grounds for including corporate taxes in the category of local or parallel taxes.

Suggested Citation

  • Lyudmil Naydenov, 2019. "Personal And Corporate Income Taxes As Sources Of Local Revenues - Opportunities And Challenges," Economics 21, D. A. Tsenov Academy of Economics, Svishtov, Bulgaria, issue 2 Year 20, pages 17-33.
    • Handle: RePEc:dat:econ21:y:2019:i:2:p:17-33
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    File URL: http://hdl.handle.net/10610/4193
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    References listed on IDEAS

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    1. Roy Bahl & Musharraf Cyan, 2011. "Tax Assignment: Does the Practice Match the Theory?," Environment and Planning C, , vol. 29(2), pages 264-280, April.
    2. Spry John Arthur, 2005. "The Effects of Fiscal Competition on Local Property and Income Tax Reliance," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-21, January.
    3. David King, 2007. "Allocation of Taxing Powers," OECD Journal on Budgeting, OECD Publishing, vol. 6(3), pages 1-33.
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