Abstract
Seeking to contribute to the analysis of anti-crisis economic policy decisions, the authors of the current article have developed an economic analysis modelling system of the main tax rates, which makes it possible to carry out research into modelling economic scenarios in order to determine the variables of optimal tax rates. By applying this modelling system in practice, it is possible to measure the maximum probability rates of Value Added, Profit, and Personal Income Taxes for the collection of necessary revenues to the state budget. This method presents a possibility to accurately evaluate the impact of fiscal policy measures on the state budget as well as to reflect economic processes more comprehensively and model accurate short- and long-term projections.
Highlights
In 2008, the world was shaken by an economic crisis whose negative effects had impact on the economic situation in most countries
It has already been mentioned that in 2009 the Government of Lithuania imposed a curbing fiscal policy, which is reflected by the increased tax rates: the Value Added Tax rate was increased from 18% to 19%, and later to 21%, the Profit Tax rate increased from 15% to 20%, while the Personal Income Tax rate was redistributed but the rate value did not change and remained at 24%
The research demonstrates that during a crisis, the Value Added Tax (VAT) rate ought to be reduced in order to conduct a stimulating fiscal policy
Summary
In 2008, the world was shaken by an economic crisis whose negative effects had impact on the economic situation in most countries. The authors of this article have proposed an economic analysis model of the key tax rates, making it possible to conduct research by modelling economic scenarios and determine the variables of optimal tax rates. While applying the experimental research model, it is possible to calculate the optimal Value Added, Profit, and Personal Income tax rates that would enable the Government to collect the desirable revenue to the state budget. This method provides the opportunity to precisely evaluate the impact of the application of fiscal policy tools on the state budget, reflect economic processes more comprehensively and model accurate short- and longterm projections. The Statgraphics Centurion, Gretl and SPSS software programs were used while conducting the quantitative research
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