Tax administrative costs as a component of tax transaction costs in Poland and other OECD countries

Abstract

While implementing a tax policy, attention should be paid not only to the amount of tax revenues but also to the total cost of the fiscal process itself. Only an analysis with consideration of tax collection costs provides the possibility of unequivocal assessment of a tax system's effectiveness. The aim of the article is to identify the elements of tax transaction costs and to analyze in detail the tax administrative costs, as well as to assess the effectiveness of the Polish tax system compared to that of other OECD countries. The Polish tax administration is one of the most expensive in the European Union and it requires reforms. According to the OECD, tax collection costs in Poland in 2013 amounted to 1.6% of tax revenues. Among the 56 countries surveyed by the OECD, only Japan (1.74% of revenue) and Saudi Arabia (1.62%) had a higher tax collection costs index.