How Does Fiscal Policy Affect Government Revenues? Comparative Approach Between Flat Tax and Progressive Tax Systems From 2002 – 2015 Case Study: Albania

Abstract

The aim of this thesis is to investigate two taxation systems: flat and progressive, and the role that government has played in effective administration of tax collection. The analysis investigates the effect that each of the taxation systems has on government revenues through time-period of fourteen years. Data for this thesis were obtained from several official competent publishing institutions, where worth mentioned: International Monetary Fund (IMF) and Ministry of Finance in Albania. In the help of econometric program SPSS the data so obtained, were processed to answer the research questions posed by this study. In this context, this study answers several questions such as: Have the government used the right policies to collect taxes? Which is the most appropriate taxation system to collect taxes? How taxation system affects socio-economical life of individuals? Furthermore, the study will have a break down the Albanian taxation system by having a deep analysis to taxation system over years and how those policies have affected the economy. The following material is intended to provide a more concise view of the concepts of the tax system and fiscal reform in the social, economic, political and technological conditions of Albania, including the flat and progressive tax treatments within the dynamic changes that have occurred in recent years.