The Contribution of Individual Income Tax to the Formation of Public Financial Resources

Abstract

Personal income tax is an important fiscal instrument it has distinct roles in generating public revenues and influencing the economic behavior of taxpayers. Professional documents and experience gained within public financial institutions highlight the importance of information extracted from the analysis of the contribution of personal income tax to the formation of public financial resources. In this context, public authorities use a variety of tools, both quantitative in nature, such as econometric models, and qualitative in nature, such as institutional evaluation. Proper understanding and careful analysis of the contribution of personal income tax to the formation of public financial resources are crucial for the formulation of future economic strategies. This topic emphasizes the importance of efficient tax administration. Wagner first defines "fiscal economics" as that part of the economy in which the state collects taxes and duties in order to form public financial resources. The tasks of the paper are to analyze the absolute and relative increases in personal income tax during the period and to estimate potential medium and long-term trends regarding the contribution of this tax to the formation of public financial resources. This study will analyze the contribution of personal income tax to the formation of public financial resources, with a focus on the trends observed in the Republic of Moldova for the period 2019-2023. CZU: 336.226.14:336.14(478); JEL: G0, H2, H240, H30