Acta Univ. Agric. Silvic. Mendelianae Brun. 2015, 63(3), 1023-1030 | DOI: 10.11118/actaun201563031023

Impact of Lump Sum Expense Rates on Public Revenue

Jana Tepperová, Jan Pavel, Lenka Láchová
Department of Public Finance, University of Economics, Prague, náměstí Winstona Churchilla 4, 130 67 Praha 3, Czech Republic

Lump sum expense has special role within the Czech tax system. As the percentages of the lump sum expense used in the Czech Republic are high compared to other EU countries, they are often criticized as distortive and government searches for ways to limit their use. On the other side, the long-standing role of the lump sum expense in the Czech tax system hinders its decrease. Based on the data from the personal income tax returns of self-employed we analyze the use of the lump sum expense in the Czech Republic over the years 2004 to 2012. Using the same data and controlling for other variables, we estimate the impact of the lump sum expenses' rates on public revenue (personal income tax, social security and health insurance revenue). According to the results, the higher number of taxpayers using the lump sum expense does not influence the public revenue, but there is negative effect of the average portion of lump sum expense to taxable income on the public revenue.

Keywords: lump sum, expense, public revenue, self-employed, social security insurance, health insurance
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The contribution is processed as one of the outputs from the research project of the Faculty of Finance and Accounting, University of Economics in Prague, which is carry out within the institutional support of University of Economics in Prague number IP 100040.

Prepublished online: June 28, 2015; Published: August 1, 2015  Show citation

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Tepperová, J., Pavel, J., & Láchová, L. (2015). Impact of Lump Sum Expense Rates on Public Revenue. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(3), 1023-1030. doi: 10.11118/actaun201563031023
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