| Abstract [eng] |
Describe the modeling of progressive income tax in Lithuania, applying the progressive personal income tax models of Poland, Croatia, Slovak Republic, Slovenia, Ireland and Denmark. Relevance. In every country employees' income is taxed by Personal Income Tax (PIT) and the question of taxation is important for majority of people. Moreover, it is important to highlight that personal income taxation is changing according to economic situation of the country and this is happening quite often. PIT is not harmonized in EU countries and due to this reason every country applies different income taxation models. In the scientific researches there are emphasized that economically developed countries usually apply the progressive PIT models, when the higher tax rate is applied for the higher income level. However, economically developing countries generally use the proportional PIT model in which there is just one tax rate for all income levels. In order to ascertain the right model for the country, it is essential to understand their differences and peculiarities. Evaluating the situation in Lithuania, it is important to emphasize that The Republic of Lithuania Law on Income of Individuals was accepted in 2003 and since then has been adjusted 69 times. Frequent changes of the income tax treatment cause difficulties for both taxpayers and tax administrators. Moreover, the changes affect Lithuanian national revenue collection. In order to improve collection of tax revenues, it is essential to implement the reform of the tax system. Different opinions raise the debate and require researches which estimate the effect of the progressive personal income tax models on tax income from PIT. |
