Publications - Working Papers IER SAS

This study continues in the previous work of authors that describes the concept of EU own sources reform through the introduction of environmental tax in the amount of 1 % of the gross domestic product with a parallel decreasing of the tax burden by the same amount. Calculations of macroeconomic effects were executed with the help of CGE model with the focus on Slovakia. Calculations of macroeconomic effects were executed with the help of CGE model with the focus on Slovakia proved positive macroeconomic effects. The extent of those effects depends on reaction of enterprises and their employees to decreasing of labour tax in those ranges (medium term effect):

– Positive aspects on GDP (between 1.2 % to 3.9 %) and the income of households (between 2.9 % to 5.1 %).

– Number of employees increases from between 30 thousand (1.5 % negative scenario) to 150 thousand (6.5 % positive scenario).

Macroeconomic effects of scenarios with the profit of enterprises from decrease of labour tax are significantly higher than the influence of scenarios with profiting households. Differences among scenarios introducing reforms in Slovakia only and introducing reforms in whole EU are quite small.