THE ROLE OF PERSONAL INCOME TAX IN THE MUNICIPAL BUDGET MEDIUMTERM PLAN DEVELOPMENT

Abstract

Main source of revenue for municipalities is revenue of personal income tax (PIT). In years 2001 – 2011 it specific weight was in average 46.62% of all municipal revenue. For forecasting PIT revenue in the municipal budget, analysis of correlation must be made, to make regression model. Main factor in this model is gross domestic product. Other factors, affecting revenue of PIT, can be grouped – factors of positive influence, e.g. average wage, and negative influence, e.g. shady economy. Each municipality is required to evaluate impact of factors to its revenue of PIT. Moreover, there can be added some specific factors or information, which is actual for this municipality. Forecasting of PIT income provide implement of medium term planning principles in municipal operation. That can also improve possession of information of municipalities and apply to them greater responsibility for achieved results.

DOI: http://dx.doi.org/10.5755/j01.em.17.4.2987