engleski

Fiscal system reform and tourism development in transition economies

This conference paper primarily deals with the carrying out of the fiscal reforms in transitional countries, and the aims and accomplishments that so far have been reached in this field. Furthermore, it deals with the impact of fiscal reform changes on the development of the tourism industry. Since fiscal system is the basis of every economic system, it is clear from the start that all transitional countries have had to change radically their inherited tax systems, so as to make them compatible to the market economy. The period of realization of fiscal reforms in transitional countries is not uniform ; i.e. it varies from country to country. Most of the countries have so far achieved considerable results in modernization and adaptation of their tax systems to those of the developed market economies, but there is still a long way ahead of them. To reach stability and balance of public finances fiscal system reform should include those adjustments, related to tourism sector, by which total tourism consumption will be so much burdened to keep service prices competitive and on the other hand, to ensure an optimal income for the financing of public projects. The active cooperation between fiscal and tourism policy holders is one of the most influential regulators, which provides stable and dynamic development of the tourism industry. Consequently, there are so many ways how government can stimulate viability of the tourism sector through the adjustments of the taxation system. From the tourism destination's point of view, the most important role of the fiscal system is to regulate services' price positioning among competitive tourist receiving countries, especially in the process of image creation. From another point of view, fiscal system must ensure quality financing of many projects that will ensure sustainable tourism development. The most sensitive part of running business in tourism (micro aspect) and achieving sustainable tourism development (macro aspect) is insufficient and inconstant system of stimulation directed by the government, primarily through the taxation of income. In order to encourage real estate investments (i.e. construction of new hotel capacities), foundation of new enterprises (SMEs) and additional employment in tourism sector, government should reduce or abolish income taxes for certain period of time. Furthermore, there are two macroeconomic problems, directly connected to optional taxation adjustments, which need further consideration, are decreasing of unemployment and reduction dependency on foreign products (encouraging export through tourism). By decreasing the unemployment rate, as the major problem of most transitional European countries, state authorities should satisfy basic prerequisite for the optimal utilization of tax potentials within a state economy. By adjusting tax rates and giving certain encouragement to the tourism sector development, intensive export through tourism could also be encouraged, joined by cutting unnecessary imports of goods for the purpose of tourism service making.

fiscal reform ; transition process ; forms of taxation ; tax rates ; tax burden ; tourism development ; price competitiveness ; tourism expenditure

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