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Croatian and comparative public administration : a journal for theory and practice of public administration, Vol. 24. No. 1., 2024.

Preliminary communication

https://doi.org/10.31297/hkju.24.1.5

Tax Autonomy of Local Government: A Comparison of Croatia and OECD Countries

Robert Matić orcid id orcid.org/0009-0008-6676-4413 ; Rijeka, Croatia
Helena Blažić Pečarić orcid id orcid.org/0000-0003-4602-3665 ; Faculty of Economics and Business, University of Rijeka, Croatia
Maja Grdinić ; Faculty of Economics and Business, University of Rijeka, Croatia

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Abstract

The paper measures the total (two-tier) local tax autonomy (cities/municipalities and counties combined) in Croatia applying the OECD methodology in terms of the definition and scope of taxes and their classification according to taxing power and autonomy. First, it follows the methodology of previous studies for Croatia, which considered only nominal taxes. This results in a relatively small share of autonomous taxes in local tax revenues. The change from a formal recording of taxes to an effective one based on the OECD definition of taxes leads to more than a doubling of local autonomous taxes. However, compared to other OECD unitary countries (countries with only the local level), Croatia still lags significantly behind the OECD average and also behind the average of EU member countries that are also OECD member countries. The weighting of different categories, despite the risk of arbitrariness, and the resulting tax autonomy index show an additional improvement of the Croatian situation. Further calculation
of the tax autonomy index and, in particular, the composite indicator of tax autonomy (share of autonomous local taxes in total general government taxes), as well as the composite tax autonomy index (local tax autonomy index divided by total general government taxes), lead to a further improvement of the Croatian position. Although the country is still below the OECD average, it has improved to an almost median position. The indicators suggest that the taxing powers of local governments need to be further strengthened.

Keywords

Croatia; local government; local taxes; taxing powers; tax autonomy; OECD

Hrčak ID:

316548

URI

https://hrcak.srce.hr/316548

Publication date:

30.4.2024.

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