Taxation : a critical discussion of the present tax system in Kosovo

Abstract Title: Taxation - A critical discussion of the present tax system in Kosovo Institution: School of Business and Economics University: Linnaeus University Aim: The aim of this thesis is to characterize and critically discuss thepresent tax system in Kosovo, keeping in mind the fundamentalproblems presented in weak tax bases, informal economies, ethniccontroversy and limited inflow of FDI in the country. Further,contributing with alternative designs of the tax system and argueadvantages and disadvantages of these designs Method: The thesis will attempt to relate the descriptions and analysis of the taxsystem in existing and essentially established theory. Further a casestudy is performed using of quantitative, secondary data available ontaxes in transition, with the purpose to enhance the understanding oftax systems in transition, and apply the knowledge on the case ofKosovo. Conclusion: The corporate taxation should not be much lowered in the present,however, in the future a lowering of the corporate taxation could helpbring up the employment level. The government should furtherconsider inferring contribution and payroll taxes to broaden the taxbase. The indirect taxation rate should not be increased in the longterm, but the country has the opportunity to increase the VAT rate to17 percent in shorter terms. A progressive, territorial tax system, with adeduction of taxation of roughly 80 Euros per month in income taxshould be kept