Most authors divide the costs of taxation into two subsets. The fi rst subset “direct administrative
costs” are the direct costs of the public sector. The second subset the “compliance costs of taxation”
are the indirect expenses of the private sector connected with paying taxes. This paper focuses on
the compliance costs of taxation with the goal to assess the level of compliance costs of the private
sector for income taxation and compliance costs for employers connected with the administration
of salaries and social contributions in Slovakia. The results, based on 2011 data show that Slovak
businesses have very high costs connected with paying the taxes – compared to other developed
countries and also to Slovakia’s neighbours. The estimates for physical persons are particularly
high, even using the most cautious assumptions. The situation deserves attention and motivates
a search for some explanations and reactions. We argue that both the low level of tax compliance,
because of a large shadow economy, and a too complicated tax system are the key factors
determining the situation. However, neither a simplifi cation of the tax system or real measures
to cut tax evasion are on the agenda of the current left wing government. One specifi c factor
that may have had an impact on the government`s limited willingness to enact necessary radical
changes, uncovered by our research, is tax illusion. The responses to our questionnaire were rather
surprising – 8% of respondents felt that compliance costs were marginal and 31% felt that their
level was fully acceptable. This situation provides one more – political – explanation for the current
situation: if tax payers are not well informed their motivation to demand change is limited
Is data on this page outdated, violates copyrights or anything else? Report the problem now and we will take corresponding actions after reviewing your request.