Analysis of Subsidies in the Private Sector on the Enterprise Basis

Jiří Pšenčík, Jindřiška Kouřilová and Jaroslav Sedláček

Acta Oeconomica Pragensia, 2010, vol. 2010, issue 5, pages 58-71

Abstract: The aim of the paper is to analyze the transfer of financial flows of subsidies and taxes between the state and the beneficiary. In this respect, the topic deals with the return cash flow from the recipient to the state budget, the impact of taxes and VAT rates. The result is a compilation of mathematic models that allow quantification of the positive cash flow from the point of view of the funded entities and reflection-induced flows resulting from tax collection back to the state budget. Specifically, financial flows between the state and a sample of business entities in agriculture, which is a sector with significant endowments, were calculated as an example. The amount of reverse flow to the providers of financial subsidies (so-called hidden subsidies) was derived from the investment and operating subsidies in the model. An individual tax multiplier for differences in VAT rates was calculated as well.

Keywords: VAT; subsidy; operating subsidy; mathematical models; investment subsidy; individual tax multiplier; indirect taxes; excise tax; income tax; corporate and individuals; cash flow (search for similar items in EconPapers)
JEL-codes: D21 E20 M21 (search for similar items in EconPapers)
Date: 2010
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