NEWLY CREATED CONSEQUENCES CAUSED BY THE CHANGE OF INCOME TAX

Domagoj Pavic () and Domagoj Karacic ()
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Domagoj Pavic: Vodovod-Graditeljstvo d.o.o., Osijek, Hrvatska
Domagoj Karacic: Faculty of Economics in Osijek, Republic of Croatia

Interdisciplinary Management Research, 2015, vol. 11, 524-533

Abstract: Amendments of the Law on Income Tax and increase of the personal deduction will result in the decrease of liabilities and payments of employment income tax. Since income tax is a joint income of state and local governments, cities and municipalities will get a smaller portion of the funds to finance their needs, also many programs and activities of cities and municipalities will come into question. In order to achieve plans and forecasted activities, cities and municipalities introduced an increase of surtax. With this increase of surtax local self-government units tried to compensate for the decreased income and cash inflow from employment income tax. This paper strives to explore the thesis that local selfgovernment units, through the increase or introduction of additional surtax, attempt to collect the same amount of financing funds as in previous periods.

Keywords: income tax; personal deduction; surtax; cities and municipalities (search for similar items in EconPapers)
JEL-codes: F65 G2 H2 (search for similar items in EconPapers)
Date: 2015
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