Primjena Flat tax modela u zemljama u tranziciji
The Application of Flat Tax Model in Transition Countries

Summary/Abstract: One segment of entire macroeconomic reform that transition countries apply is a tax reform. This paper deals with the problem of income tax reforms in transition countries. The analysis of income tax reform in chosen transition countries will be done through the application of flat tax model. In order to measure the success of flat tax model in transition countries, two parameters will be used: unemployment rate and inflow of foreign direct investment. Adequacy of application of flat tax model will also be measured through the role of direct taxes in gross domestic product (in percentage) in years before and after the reform. In this paper, the example of Slovakian model is used due to the fact that flat tax model applied in Slovakia is very close to theoretical one. Afterwards, the results of application of flat tax model in other chosen transition countries will be given. Expected results based upon the two paramaters used are: transition countries that apply flat tax model have a higher inflow of foreign direct investment and lower unemployment rates.

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