Tax Autonomy of Self-Governing Units in Slovakia
DOI:
https://doi.org/10.61357/sehs.v10i2.53Keywords:
sub-national government, local tax, tax autonomy, financial autonomy, fiscal decentralizationAbstract
Tax autonomy as a form of financial autonomy is one of the key factors of fiscal decentralization. A precondition of tax autonomy is the ability to acquire tax resources in the territory of the jurisdiction and to use them in accordance with socio-economic targets of the jurisdiction. In Slovakia, following the public sector reform in 2001, two types of self-governments exist. Although self-governing municipalities have existed since the change of the regime (1989), regions were established and have been effective since 2002. The ensuing turbulent period of the Slovak economy included a phase of economic expansion, depression and economic recovery. This had several impacts on the tax autonomy of existing self-governing structures in Slovakia. While the system of shared taxes increased the financial autonomy of both structures, changes in the overall tax system, especially after the financial crisis (2009), dramatically reduced their tax autonomy. A special situation emerged in case of regions, where the taxing power regarding the motor vehicle tax (the only own tax source) was shifted to the central level of government in 2015. The aim of the paper is to measure the tax autonomy of regions and municipalities since 2002 and compare it to their financial autonomy, which takes the form of a formal measurement. Additionally, the impact of certain demographic and macroeconomic variables on tax autonomy of self-government units in Slovakia is examined.
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