Fiscal efficiency of the green transformation of the tax system on selected examples of European Union Member States

Abstract

Objectives Contemporary tax policy is conducted taking into account their other functions, including the stimulus function. The main purpose of the article is to indicate which taxes are the most appropriate for the implementation of environmental policy, with particular emphasis on fiscal efficiency and effectiveness. For the purposes of this article, a thesis was formulated that modern tax systems should not only constitute an effective set of taxes maximizing the welfare of society, but also support the implementation of environmental policy. Material and methods Considerations regarding fiscal effectiveness and efficiency in the context of the green transformation of tax systems were carried out on the example of EU Member States, taking into account the division into highly and medium-developed countries. In the analytical part, the authors, using publicly available statistical data and common measures of tax burdens, indicate differences in the level of tax burdens of selected Member States in the field of environmental taxes. Results In the analytical part, the authors also indicate the relationship between the level of taxation with environmental taxes and the willingness of enterprises to undertake activities related to eco-investments, including research and development works, the effect of which is environmental protection. Conclusions Based on the comparative analysis of direct and indirect taxes, the authors indicate that the most appropriate group of taxes that can be an effective instrument to support the green transformation policy are indirect taxes. The justification for this indication is their constant fiscal efficiency as well as the universality of taxation, which increases their stimulating nature and supports environmental transformation.

Keywords

• environmental taxes
• tax policy
• direct taxes
• indirect taxes
• green transformation