The Flat Tax and Efficiency of Fiscal System

Abstract

What has been the impact of the flat tax in the efficiency of the fiscal system? To analyze these effects we are taking into consideration fourteen ex communist countries which have performed reforms after the year 2001. These countries have supported the flat tax application and therefore have undermined the tax level. To make this comparison we have obtained from a database of the World Bank "Paying Taxes" which ranks fiscal systems for 185 different countries according to their efficiency. By order of the data in the database of places to consider for a period of 5 years (2008-2012), it has been concluded that the flat tax has not improved the efficacy of the fiscal system. Excluding some countries, the efficiency of the fiscal system after the flat tax reform, has remained the same, even in any country are feeling the negative effects of the flat tax. It is recommended that countries ex - communist renounce flat tax and fiscal legislation adopted by developed countries to apply progressive tax.

DOI: 10.5901/ajis.2013.v2n8p446