Abstract

Purpose of the study: This study aims to explore how tax rates in surrounding municipalities affect tax decisions in 36 Polish municipalities. It also seeks to understand how local revenues and GDP impact the role of local taxes in funding local governments. Additionally, the study examines the interplay between local tax policies, decentralization, and municipalities' responsibilities, especially considering Poland's significant financial independence.
 Methodology: This article examines the existing body of literature relevant to the author's research areas. Relevant materials were chosen, and additional sources were incorporated, with the most significant ones being documented in the bibliography. As a result, an initial evaluation of preexisting information (derived from secondary studies) was employed as a research methodology.
 Main findings: The findings of the study indicate that tax rates in neighbouring municipalities do have an impact on local politicians' decisions regarding tax resolutions. The study also reveals that there is a positive correlation between own revenue and GDP, indicating the fiscal importance of local taxes in financing local self-government.
 Application of the study: The findings of this study can be applied to inform policymakers and local authorities in Poland on the importance of considering tax rates in neighbouring municipalities when making decisions regarding tax resolutions. This study also highlights the significance of local taxes as a source of revenue for local self-government, particularly in the context of Poland's high degree of financial autonomy.
 Originality/Novelty of the study:This study is interesting because it examines the relationship between personal revenue and GDP and how it affects the fiscal significance of local taxes. It also comprehensively examines how tax rates in neighbouring municipalities influence the decisions made by local officials. These findings contribute to a better understanding of the factors influencing local tax policy and revenue diversification in Poland and can potentially inform future reforms aimed at enhancing the fiscal autonomy and effectiveness of local self-government entities in the country.

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