Comparative evaluation of the labour income taxation in the Baltic States

Abstract

The present paper discusses the concept of labour income and its taxation by personal income tax, social security and health insurance contributions, presented in the literature. In order to reveal the influence of the basic tax elements on the evaluation of the level of the labour income taxation, comparative evaluation has been carried out. During the research, Latvia and Estonia, the countries that are closely related to Lithuania, have been compared. The results of the research have shown that the comparison of the basic tax indicators, such as non-taxable minimum income and standard rates, describes the national level of the labour income taxation only partially. A more accurate description of the tax level could be provided only after applying ratios and evaluating such factors as tax base and tax exemptions.