<abstract xmlns="http://www.w3.org/1999/xhtml"><p>The author assesses the opportunities for inclusion of the corporate income tax into the budgets of the local governments on whose territories there are legally registered companies. For this purpose the same territorial code principle is recommended, which is applied to administer personal income tax. In order to motivate companies to register legally and engage in business activities in the regions of Latvia, tax incentives should be established. The application of tax incentives need to be delegated to the local governments, thus ensuring their interest in business development in their territories. The diversion of corporate income tax into the budgets of local governments would significantly strengthen their budget revenue base, increasing the interest of municipalities into the development and modernization of the companies, as well as creation of new jobs. Inherent risks are defined, and possible solutions how to eliminate these risks are suggested.</p></abstract>

The author assesses the opportunities for inclusion of the corporate income tax into the budgets of the local governments on whose territories there are legally registered companies. For this purpose the same territorial code principle is recommended, which is applied to administer personal income tax. In order to motivate companies to register legally and engage in business activities in the regions of Latvia, tax incentives should be established. The application of tax incentives need to be delegated to the local governments, thus ensuring their interest in business development in their territories. The diversion of corporate income tax into the budgets of local governments would significantly strengthen their budget revenue base, increasing the interest of municipalities into the development and modernization of the companies, as well as creation of new jobs. Inherent risks are defined, and possible solutions how to eliminate these risks are suggested.

Inclusion of the Corporate Income Tax Revenue into the Municipal Budget: Needs, Risks, and Solutions

Department of Finance, BA School of Business

Rural Sustainability Research

The author assesses the opportunities for inclusion of the corporate income tax into the budgets of the local governments on whose territories there are...

Inclusion of the Corporate Income Tax Revenue into the Municipal Budget: Needs, Risks, and Solutions

Publié en ligne: 03 juil. 2013

Pages: 56 - 66

DOI: https://doi.org/10.2478/plua-2013-0007

Mots clés
Corporate income tax, municipal government budget, tax incentives, business development, stimulation of regional economic development

This content is open access.

Inclusion of the Corporate Income Tax Revenue into the Municipal Budget: Needs, Risks, and Solutions

Publié en ligne: 03 juil. 2013

Pages: 56 - 66

DOI: https://doi.org/10.2478/plua-2013-0007

Mots clésCorporate income tax, municipal government budget, tax incentives, business development, stimulation of regional economic development

This content is open access.

Mots clés
Corporate income tax, municipal government budget, tax incentives, business development, stimulation of regional economic development