IDEAS home Printed from https://ideas.repec.org/a/taf/pocoec/v18y2006i4p399-418.html
   My bibliography  Save this article

Presumptive Taxation: Lessons from Bulgaria

Author

Listed:
  • Konstantin Pashev

Abstract

This article draws on the experience of Bulgaria with two forms of presumptive taxes—the patent (licence) tax and the minimum social insurance income thresholds. It argues that there is an inevitable trade-off between efficiency and equity, which may drive presumptive taxation away from its initial objectives of simplicity and lower compliance and enforcement costs. Therefore presumptive taxes should not be overloaded with equity objectives, or used as tax incentives, but rather assigned to enhance collection efficiency and reduce the cost of voluntary tax compliance of the small business. The study concludes that their optimal use might be as licence taxes on micro-businesses and the self-employed levied by local governments rather than as central taxes on small business income.

Suggested Citation

  • Konstantin Pashev, 2006. "Presumptive Taxation: Lessons from Bulgaria," Post-Communist Economies, Taylor & Francis Journals, vol. 18(4), pages 399-418.
    • Handle: RePEc:taf:pocoec:v:18:y:2006:i:4:p:399-418
    DOI: 10.1080/14631370601008456
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/14631370601008456
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/14631370601008456?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Konstantin Pashev, 2007. "Tax Decentralization: Solutions for Bulgaria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 67-88.
    2. Bergner, Sören Martin & Bräutigam, Rainer & Evers, Maria Theresia & Spengel, Christoph, 2017. "The use of SME tax incentives in the European Union," ZEW Discussion Papers 17-006, ZEW - Leibniz Centre for European Economic Research.
    3. János Köllö, 2010. "Hungary: The Consequences of Doubling the Minimum Wage," Chapters, in: Daniel Vaughan-Whitehead (ed.), The Minimum Wage Revisited in the Enlarged EU, chapter 8, Edward Elgar Publishing.
    4. Bíró, Anikó & Prinz, Dániel & Sándor, László, 2022. "The minimum wage, informal pay, and tax enforcement," Journal of Public Economics, Elsevier, vol. 215(C).
    5. Leibfritz, Willi, 2011. "Undeclared economic activity in central and eastern Europe -- how taxes contribute and how countries respond to the problem," Policy Research Working Paper Series 5923, The World Bank.
    6. Elek, Peter & Köllő, János & Reizer, Balázs & Szabó, Péter A., 2011. "Detecting Wage Under-reporting Using a Double Hurdle Model," IZA Discussion Papers 6224, Institute of Labor Economics (IZA).
    7. Godwin Dube & Daniela Casale, 2019. "Informal sector taxes and equity: Evidence from presumptive taxation in Zimbabwe," Development Policy Review, Overseas Development Institute, vol. 37(1), pages 47-66, January.
    8. Joshi, Anuradha & Prichard, Wilson & Heady, Christopher, 2014. "Taxing the Informal Economy: The Current State of Knowledge and Agendas for Future Research," Working Papers 13663, Institute of Development Studies, International Centre for Tax and Development.
    9. Tonin, Mirco, 2011. "Too Low to Be True: The Use of Minimum Thresholds to Fight Tax Evasion," IZA Discussion Papers 5509, Institute of Labor Economics (IZA).
    10. Munyaradzi Duve & Daniel P. Schutte, 2021. "A Critical Review of the Characteristics of Presumptive Tax Systems in Developing Countries," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 17(02), pages 27-43.

    More about this item

    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:taf:pocoec:v:18:y:2006:i:4:p:399-418. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CPCE20 .

    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.