Switching personal income tax and social security contributions between Slovenia and the Federation of Bosnia and Herzegovina

Abstract

This article examines policy switching between Slovenia and the Federation of Bosnia and Herzegovina (FBH). The idea behind it is that national microsimulation models can be used to apply Slovenian parameters to the FBH data, as established by the Personal Income Tax (PIT) Act and Social Security Contributions (SSC) Act. Accordingly, we introduce FBH parameters to Slovenian data. Along these lines, we investigate the effects on public finance systems with respect to revenues from PIT and SSC, average after-tax income, tax progressivity, income inequality, and the redistributive effect in each of these two countries, using the other country's PIT and SSC solutions. This is the first fiscal comparison of Slovenia and the FBH, as well as the first policy switching analysis of the two countries.

Exact analytical grossing up computation as data imputation technique in Mathematica

“…Thus, before any kind of tax-benefit analysis could be 7 made, a conversion from net income to gross income (''grossing up'') 8 should be performed, which is not trivial, and depends on the tax rules 9 and procedures. 10 Generally, the grossing-up algorithms are considered as missing 11 data imputation techniques, which usually rely on deterministic and 12 stochastic computation approaches, mostly under the assumption that 13 the variable in question is in some way related to other variables under 14 investigation [1,2]. One of the traditional and safest approaches to 15 * Corresponding author.…”

“…The tool evolved in the following years since initial publication [5] 38 and now supports a wide set of taxation systems and rules. The tool has 39 been useful in following research projects where we used it to provide 40 for the accuracy of the baseline scenarios by inverse calculation from 41 net to gross income [9][10][11]. 42…”

“…We used 120 it to make simulation experiments of the effects of the adopted fiscal 121 measures to prevent the adverse influence of the financial crisis [9]. 122 The tool also enabled us to study divergent processes in development of 123 Software Impacts xxx (xxxx) xxx tax benefit systems in countries which shared the same political system 1 and later transitioned to market oriented economy [10,11]…”

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