Focus on the State as a Factor of Competitiveness

Impact of the Tax System on the Competitiveness of Businesses and Capital Inflow
International comparison within the CEE region

László Nagy
PhD, Associate Professor,
University of Economics in Bratislava
Department of Corporate Finance

Published in: Public Finance Quarterly 2017/1 (p. 22-38.)

SUMMARY: This study starts the investigation of the correlations between taxation and the competitiveness of businesses by clarifying some general issues. It examines the different channels of tax regulation that affect the competitiveness of businesses. Although the study has an international scope, it focuses primarily on the Visegrád countries. The relationship between the investors’ willingness and taxation is also analysed. The study concludes that in a European context there is no close correlation between the competitiveness of the tax system and capital inflow. In the opinion of the author, the regulatory system should be simplified primarily, with a view to improving the investment environment of the Visegrád countries. One important conclusion of the study is that the competitiveness of the businesses of the region is encumbered less by the size of tax burdens and much more by the complicacies of tax regulation and the time-consuming nature of the administrative tasks connected to taxation.

KEYWORDS: competitiveness, tax system, capital inflow, Central and Eastern Europe

JEL CODES: H20, H25, H32, F21

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