Management Theory and Studies for Rural Business and Infrastructure Development, Volume 15

Influence of the collecting the citizens income tax on the municipalities‘ income

Astrida Slavickienė, Jūratė Savickienė, Lucija Jurgelaitienė


The influence of the income gained from the collected citizen income tax on the income
of Kaunas district municipalities and the factors, influencing the collection of the tax, also the
possibilities to increase the collection of incomes by changing the tax rates, and the charging system
are analyzed in this article. After having carried out the analysis in the municipalities of
Kaunas district, it was discovered, that the municipalities gain approximately 90 percent of the
total taxing incomes from their citizen income tax, which is why the significance of this tax is
huge. The collection if the citizens income tax in Kaunas district increased in average 15 percent
a year in the analyzed period. After analyzing the main indicators, influencing the collection of
citizens income tax, it was found out that the collection of the citizens income tax during the analyzed
period had increased, still the factors, reducing the incomes have reduced them from 14,4
percent in 2004 up to 25,4 percent in 2007 during the analyzed period of time. In order to evaluate
the effectiveness of introducing the progressive system of citizen income tax, the three variants
were chosen and estimations made, in order to set the influence of the progressive system on
the municipalities‘ income. It was assessed that in all three variants the amount of collected income
would be bigger. Still taking into consideration also the possibilities of the tax payers, the
variant 2 would be recommended (income-tax tariffs 5; 25; 45 percent).

Keyword(s): income, individual’s income tax, municipalities‘ income

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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.