Abstract
AbstractThe main goals of the article are to investigate the level of fiscal unsustainability in Poland and estimate the tax gap necessary to stabilize the size of the public debt and to follow a path to fiscal sustainability. It hypothesizes that by closing the tax gaps for value-added tax (VAT) and personal income tax (PIT), Poland can cover most of its current fiscal needs and stabilize the country’s fiscal situation. We estimated a modified version of the equation describing Ponzi games, calculated the primary gap indicator, and conducted cointegration tests for ex-post data on public expenditures and revenues to investigate the actual level of fiscal unsustainability. The research period covers yearly observations between 2003 and 2017. Empirical evidence confirmed our research hypothesis. We found out that closing the tax gap could change the situation dramatically. If the public authorities were able to collect the VAT and PIT that currently go uncollected, Poland could easily embark on the path towards fiscal sustainability.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
