Content

Theoretical Refresher

1. Fundamental concepts and indicators in macroeconomics
1.1     Gross domestic product

1.2     Unemployment

1.3     Public Sector

1.4     Fiscal policy and the macroeconomics

2. Macroeconomic environment and taxes

2.1     Desirable Characteristics of any Tax System

2.2     Economic Efficiency

2.3     Tax Incidence

2.4     Optimal taxation

2.5     Main categories of taxes and social contributions

Tax Revenue Modelling

3.     Econometric tax revenue forecasting

3.1     Introduction to budget revenue forecasting

3.2     Revenues elasticities & estimating structural budget balances

3.3     Tax revenue forecasting:

-        Personal Income Tax and Social Security Contributions

-        Corporate Income Tax

-        Value Added Tax

-        Excise taxes

3.4     Practical part: A Tax Forecasting with EViews

-        Stationarity

-        Cointegration

-        Error Correction Models

-        Explanation of Standard Regression Output

-        Assumptions about a good regression model

-        Forecasting

4. Tax Revenue Microsimulation Modelling

4.1     Introduction to Microsimulation Modelling

-        Concept

-        History

-        Trends

4.2     Microsimulation Modelling for Policy Analysis

-       Types of microsimulation model (for direct taxes, social benefits, pensions, corporate income tax, and               other types)

-        National and international microsimulation models

-        Data:

-      Survey data (HBS): advantages/disadvantages, grossing-up procedures

-        Administrative databases: advantages/disadvantages, databases maintenance

-        Static vs Dynamic microsimulation models

-        Impact of demographic changes (population ageing)

4.3    Microsimulation Modes for Personal Income Tax (PIT) and social security contributions (SSC):

-        The unit of analysis: fiscal unit or household

-        Parameters of PIT/SCC:

-        Tax base: definition, specifics (i.e. SSC ceilings)

-        Tax deductions (allowances)

-        Tax rates (schedule, flat rate)

-        Assessing effects of policy changes:

-        From macroeconomic perspective (overall amount of taxes)

-        Changes in income inequality (Gini coefficient, I₂)

-        Redistribution of tax burden

-        By units of analysis (individual taxpayer/household)

-        By other criteria (age, gender, income decile)

4.4     Exercise in static microsimulation model for PIT and SSC

-        This section includes exercises in static microsimulation model for PIT and SSC. The  model is based on artificial tax system and artificial database of taxpayers. It covers a  comprehensive set of tax parameters explained in Section 4.3 (above) such as different  types of incomes (with different tax bases),different types of deductions as well as  progressive tax schedule and flat tax option.

-        The results include macroeconomic perspective (overall amount of SSC, PIT), changes in  income inequality and distribution of tax burden at the level of individual taxpayers (grouped by different criteria).

-        The model enables participants to change tax parameters, to estimate the consequences of change and  thus understanding the logic and functioning of this type of microsimulation model.