Tax Burden in Transition Economies and the European Union : A Comparative Study

Tax systems have become increasingly complex in recent decades. There is no such thing as a single tax. There are individual income taxes, corporate income taxes, sometimes local income taxes. There are a variety of indirect taxes, such as the value added tax (VAT), various kinds of excise taxes, gasoline taxes, luxury taxes, estate taxes, gift taxes, property taxes and a wide range of minor taxes. To make matters even more complicated, the taxes are not consistent between jurisdictions. Each country and even subunits of some countries, such as the 50 states in the United States, have their own way of collecting revenue, which makes comparisons difficult. Transition economies, those changing from central planning to some kind of market system, are now in the process of adopting what might be called modern tax systems along the lines of those used in the more developed market economies. This paper compares components of the tax systems now being adopted in various transition economies to those already in place in the countries of the European Union (EU). This comparison is made difficult by the fact that some recent entrants into the European Union are also transition countries. This complicating factor is taken into account when making the comparisons