Regulation of the subject of property tax and the principle of financial autonomy of municipalities

Abstract

The real property tax, which is the own income of municipalities, is the most efficient source of income amongst all other taxes of local communities under this category. At the same time, it is a well-established approach in legal scholars writings that the higher the local self-governments own income, the greater its financial independence. Thus, respecting the constitutional principles of the local self-government, the legislator is responsible for structuring the legal regulations on the particular own revenues of the local self-government in such a way so as not to lead to such an interpretation that would jeopardize the efficiency of the given revenue source or, potentially, pose a risk of reducing the self-government's independence. Regulating the subject of taxation of the real property tax, as in the case of any public law levy, requires adherence to higher standards of the legislative procedure. Thanks to it, both the public interest (interest of the local self-government) and the legal and economic interest of the taxpayer may be secured. The article presents not only examples of the legislator's omissions in respecting the principles of proper legislation with regard to the subject of property taxation. Above all, the author pointed out the connection between the failure to respect the principles of proper legislation and the risk of limiting the financial independence of municipalities. In view of the conclusions reached, it was also necessary to indicate de lege ferenda conclusions.

Keywords

• real property tax
• financial independence of a municipality
• principles of proper legislation
• subject of taxation with property tax
• efficiency of local taxation