abstract: 'Background: In recent years'' income inequality has been an economic

  issue. The primary instrument for redistributing income is personal

  income tax. However, based on economic theory income inequality concerns

  indicators such as wages, transfer payments, taxes, social security

  contributions, and geographical mobility. Objectives: The objective of

  this paper is to examine the impact of certain labor market indicators

  on personal income taxation in Federation of Bosnia and Herzegovina

  (FB\&H). Methods/Approach: Since personal income taxation consists of a

  very broad definition and for the purpose of this research only, income

  from dependent (employment) activity is observed. The econometric

  analysis is conducted using error correction modeling, as well as

  forecast errors variance decomposition. Results: The error correction

  model is estimated, and the cointegrating equation indicates that

  monthly wage and number of employees statistically significantly

  positively affect personal income taxes in FB\&H in the long-run. After

  two years, the selected labor market indicators explain a considerable

  part of forecasting error variance of personal income tax revenues.

  Conclusions: The implementation of reforms in the labor market and tax

  policies of the FB\&H is suggested. In order to achieve necessary

  reforms, efficient governance and general stable political environment

  are required.'
affiliation: 'Palic, I (Corresponding Author), Univ Zagreb, Fac Econ \& Business,
  Zagreb, Croatia.

  Palic, Irena; Dumicic, Ksenija, Univ Zagreb, Fac Econ \& Business, Zagreb, Croatia.

  Hodzic, Sabina, Univ Rijeka, Fac Tourism \& Hospitality Management, Rijeka, Croatia.'
author: Palic, Irena and Hodzic, Sabina and Dumicic, Ksenija
author-email: 'ipalic@efzg.hr

  sabinah@fthm.hr

  kdumicic@net.efzg.hr'
author_list:
- family: Palic
  given: Irena
- family: Hodzic
  given: Sabina
- family: Dumicic
  given: Ksenija
da: '2023-09-28'
doi: 10.2478/bsrj-2019-0011
eissn: 1847-9375
files: []
issn: 1847-8344
journal: BUSINESS SYSTEMS RESEARCH JOURNAL
keywords: 'error correction model; Federation of Bosnia and Herzegovina; labor

  market indicators; personal income taxation'
keywords-plus: LABOR-MARKET INSTITUTIONS; TAX; POLICY
language: English
month: APR
number: '1'
number-of-cited-references: '40'
orcid-numbers: 'Dumičić, Ksenija/0000-0001-7131-9455

  Hodzic, Sabina/0000-0002-4202-3548

  Palic, Irena/0000-0002-7525-0640'
pages: 153-163
papis_id: d8a3d8d1a114893254bfe9ccf23ea34c
ref: Palic2019personalincome
researcherid-numbers: 'Dumičić, Ksenija/X-8866-2019

  Hodzic, Sabina/R-3405-2018

  Palic, Irena/H-7753-2018'
times-cited: '3'
title: Personal Income Taxation Determinants in Federation of Bosnia and Herzegovina
type: Article
unique-id: WOS:000467633400011
usage-count-last-180-days: '0'
usage-count-since-2013: '5'
volume: '10'
web-of-science-categories: Business
year: '2019'