IDEAS home Printed from
   My bibliography  Save this article

Presumptive Taxation: Lessons from Bulgaria


  • Konstantin Pashev


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

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

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

    References listed on IDEAS

    1. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    2. Pedro Mira & Namkee Ahn, 2002. "A note on the changing relationship between fertility and female employment rates in developed countries," Journal of Population Economics, Springer;European Society for Population Economics, vol. 15(4), pages 667-682.
    3. Siv S. Gustafsson & Shirley Dex & Cécile M. M. P. Wetzels & Jan Dirk Vlasblom, 1996. "Women`s labor force transitions in connection with childbirth: A panel data comparison between Germany, Sweden and Great Britain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(3), pages 223-246.
    4. Ermisch, John F, 1990. "European Women's Employment and Fertility Again," Journal of Population Economics, Springer;European Society for Population Economics, vol. 3(1), pages 3-18, April.
    5. Phillip B. Levine & Douglas Staiger, 2002. "Abortion as Insurance," NBER Working Papers 8813, National Bureau of Economic Research, Inc.
    6. Ermisch, John F, 1988. "Purchased Child Care, Optimal Family Size and Mother's Employment," CEPR Discussion Papers 238, C.E.P.R. Discussion Papers.
    7. Rosenzweig, Mark R & Schultz, T Paul, 1985. "The Demand for and Supply of Births: Fertility and Its Life Cycle Consequences," American Economic Review, American Economic Association, vol. 75(5), pages 992-1015, December.
    8. Andrienko, Yuri & Guriev, Sergei, 2003. "Determinants of Interregional Mobility in Russia: Evidence from Panel Data," CEPR Discussion Papers 3835, C.E.P.R. Discussion Papers.
    9. Irina Denisova & Stanislav Kolenikov & Ksenia Yudaeva, 2000. "Child Benefits and Child Poverty," Working Papers w0006, Center for Economic and Financial Research (CEFIR).
    10. Mroz, Thomas A & Popkin, Barry M, 1995. "Poverty and the Economic Transition in the Russian Federation," Economic Development and Cultural Change, University of Chicago Press, vol. 44(1), pages 1-31, October.
    11. S. Misikhina, 1999. "Social Payments and Benefits in the Russian Federation," Problems of Economic Transition, Taylor & Francis Journals, vol. 42(6), pages 33-39.
    Full references (including those not matched with items on IDEAS)


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

    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. Tonin, Mirco, 2010. "Too low to be true: the use of minimum thresholds to fight tax evasion," Discussion Paper Series In Economics And Econometrics 1018, Economics Division, School of Social Sciences, University of Southampton.
    3. 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 - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. János Köllö, 2010. "Hungary: The Consequences of Doubling the Minimum Wage," Chapters,in: The Minimum Wage Revisited in the Enlarged EU, chapter 8 Edward Elgar Publishing.
    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 & Köll?, János & Reizer, Balázs & Szabó, Péter A., 2011. "Detecting Wage Under-reporting Using a Double Hurdle Model," IZA Discussion Papers 6224, Institute for the Study of Labor (IZA).

    More about this item


    Access and download statistics


    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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.