engleski

Fiscal equalisation in Croatia: Fine tuning of the Lorenz curve

Since 2018, Croatia has a new fiscal equalisation model that, besides simplifying the (horizontal) revenue sharing with a formula-based fiscal capacity equalising system, transparently distributes the overall personal income tax revenues to the local government units (LGUs). The LGU’s fiscal capacity and equalisation share are based on per capita calculations that use 2011 census data. This paper argues that the new model’s fairness is devalued because the serious demographic change Croatia has been facing over the last few years is not considered, and that distortion should be mitigated by using official population estimates.

City of Zagreb ; economic growth ; depopulation ; decentralization

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