| Sažetak (engleski) | In Croatia, the social security system is based on generational solidarity,
i.e. payment of contributions, which is known as pay as you
go (PAYG), but the balance of its functioning is permanently and
significantly disturbed by long-term unfavourable demographic
processes. Projections show that the worrying demographic situation
will deteriorate even further and that, with low birth and fertility
rates and negative natural growth, negative net migration will
contribute to further depopulation. In addition, contributions directly
burden labour, i.e. they increase labour costs for employers
and reduce their competitiveness in the marketplace, affecting economic
growth. The paper reviews empirical research on the impact
of different tax structures on economic growth, the sublimated
conclusion of which is that direct taxes have a negative effect on
growth, while indirect taxes are neutral. The Croatian tax system,
with VAT as the main factor in the tax structure, is focused on taxing
consumption, but is also characterized by a high level of levies.
In this paper, the authors use the vector autoregression model to
analyse the relationship between economic growth and the
changed tax structure of the Republic of Croatia, in which the role
of indirect taxes would be more emphasized. Data in model are
consist of different types of taxes, GDPpc, population growth, gross
fixed capital formation, unemployment rate and cover the time
period from 2004 to 2019. The authors prove that the reduction of
the tax burden through direct taxes has positive economic, demographic
and fiscal effects. |
