TAXATION OF INCOME FROM EMPLOYMENT AND INFLUENCE OF TAXATION ON CONSUMPTION AND SAVINGS

The tax burden on income from employment is a very important issue in the economy of the Republic of Croatia. In the last three years, a lot has been done by the legislature to relieve the citizens of various tax burdens. The tax reforms which were, among other changes, aimed at changes in the taxation of the income from employment, were the following: the basic personal allowance of the workers was increased, the number of tax rates was decreased with the extension of the tax rate for the application of the lowest tax rate, the deduction of income tax based on the residence of workers was abolished under special regulations and, with the last tax reform, some of the contributions paid on workers' salaries were abolished as well. For this very reason, the aim of this paper is to determine how these changes have reflected on the overall satisfaction of individuals and how reform measures of taxation of the income from employment have influenced the individuals' consumption and savings. In the first part of the paper, an analysis of the taxation of the income from employment for the period from 2016 to 2019 was made, while the second part of the paper examined the attitudes of individuals about the changes in the system of taxation on the income from employment and the influence of taxation on their consumption and savings based on the executed research.