engleski

Some characteristics of the “boat tax” in Croatia

The introduction of any form of taxation causes many different consequences for the economy, and this is particularly true of excise taxes. Therefore establishing which market participants will actually bear the tax burden is only superficially simple. By using a specific economic model we show that an increase in the excise tax on boats in Croatia may especially hit producers in the small boat industry, and indirectly – due to the fall in production and the increase in prices – boat buyers. The increase in excise tax on boats was motivated both by intention to increase total tax revenue and by the desire to increase the tax burden on individuals with higher “ability to pay”. However, in the process the production factors in the small boat industry could suffer “collateral damage”.

Excise tax ; tax incidence ; tax reform

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