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Influence of Local and Regional taxes on tourism

In comparison with other European Union countries, the fiscal system of the Republic of Croatia is unstimulative for the development of tourism. Influence of local and regional taxes is of significant importance for the development of a county and city (district). Units of local authorities represent that part of government that is closest to the population. Local and regional authorities need to know how to successfully meet the needs of local population and thus the needs of tourists. The core assignment of the lower units of fiscal authorities is providing services and needs for a tourist destination. Quality communication between units of local authorities and local population creates prerequisites for the higher level of tourist offer. Inheritance and gift tax, motor vehicle tax, vessel tax and gaming machine tax belong to the group of county (regional) taxes in the Republic of Croatia. Local (city or municipal) taxes include surtax on income tax, consumption tax, holiday home tax, company or name tax and public land use tax. Fiscal abstraction is present in all countries in the world. Beside positive impacts, fiscal abstractions can also have negative impacts on the development of a tourist destination. Excessive fiscal abstraction leads to a reduction of gross domestic product, increases unemployment and grey economy, and reduces competitiveness of a tourist destination. Creating better conditions would create better opportunities for development of tourist sites. A new opportunity for local and regional tourist boards should be ensured through various economic, financial, fiscal, legal and other conditions.

local and regional taxes ; tourism ; fiscal policy

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