International Journal of Economics, Commerce and Management LIMITED TAXING POWER OF LOCAL GOVERNMENT ENTITIES IN POLAND AS A DETERMINANT OF TAX COMPETITION AT THE LOCAL LEVEL
The key determinant of revenue financial autonomy of local government is the local taxing power. A wider range of fiscal autonomy usually translates into a higher degree of financial autonomy of territorial entities in a given country. At the same time, the wider the range of powers of local authorities in terms of deciding on tax matters, the greater the probability of occurrence of tax competition at the local level. The aim of this article is to demonstrate that the scope of local taxing
... of local taxing power of local government entities, unduly restricted in Poland, hinders the implementation of the local tax competition mechanisms in the sub-national government sector, which in turn prevents the optimal allocation of public goods provided by territorial communities. The article was prepared on the basis of literature studies and analysis of relevant legislations. Statistical data used in the empirical analysis were derived from the OECD database and reports of the Polish Ministry of Finance. The study confirmed that Polish local finances require systematic changes involving the strengthening of the tax autonomy of the local government.