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Public debt is one of the crucial forms of public revenue necessary to achieve some stabilization goals of fiscal policy, such as stable inflation, full employment, trade balance, economic growth, economic development, and primary securing finances for states public expenditures. It is defined as an extraordinary source for financing public expenditures, but above all it is considered for effective instrument of fiscal policy in accomplishing economic growth and development. Public debt is considered as accumulation of various forms of loans, which are normally realized by the state for the implementation of economic and fiscal policy. Continuity in emission of public debt is immanent in the determination of achieving high levels of investments in various areas of public sector, such as health care, infrastructure, education, etc. With the economic growth and higher demands for various public goods, the state is faced with the problem of securing additional sources of finance that would satisfy the peoples needs and boost the economy additionally. However, if the state decides to reduce the levels of public debt, then the government would discontinue the emissions of public debt and use the budget surplus to pay out the bond holders. Also, very important thing is the source of public debt, internal or external, which could leave the country without the needed capital to secure economic development. Therefore, the productive usage of the borrowed money is essential to have justification for continuing with policy of deficit finance. Contrary of that, the unproductive use of public debt would be risky and bring the state closer to over borrowing and finally bankruptcy.

The unexpected health crises that appeared at the end of 2019 and endures currently hadtriggered serious government challenges in conducting efficient fiscal policy. The growinghealth, educational, social, and other costs corelated with the health crisis had raisedintense reactions in governments through higher public expenditures that were financeddominantly from international financial markets. Already higher public debt to GDP ratioin some countries overcome the Maastricht criteria of this crucial fiscal variable that raisedsome serious questions for future government financial responses. This pandemic openedsome suggestions and considerations for major or minor tax reforms in some countries.If previously the governments were repellent to introduce some tax changes, now they seeopportunity to easily justify this fiscal step. The people subjected to COVID-19 disease areaddressing more publicly the need for substantial government help regarding the healthcosts. The IMF surveys show that people who faced this illness are more demanding forchanges in distributional fiscal function. The companies and households with extra profitsand income should be taxed with higher income tax rates and corporate taxes. The reasonfor this demand is the ongoing process of unevenly distributed national income that inpandemic circumstances affects more lower layers of income households. However, thereal sector in North Macedonia is publicly against higher tax rates, and they demand fromgovernment first to legalize the grey economy that they perceived as serious competitiveand fiscal problem.

It is very hard to find strong arguments and dispute the distortionary essence of taxes. They built schools and hospitals but also disrupt the economic efficiency. Ever since the first independence days, the officials in the Republic of Macedonia have tried to solve this "dilemma" in tax policy, initially balancing from higher taxes during the 90-ties to "zero" taxes marking the last decade. Generally, in the focus of the biggest tax reform undertaken in 2006 was the economic efficiency and investment, analogically followed by a period with lower tax rates. Now that we are standing in front of another challenge, since the government announced the new course in tax policy in which higher and progressive taxes are the basic attributes, it is time to answer the question whether the previous "era" of low tax rates have earned the justification of its purpose. Intending to answer this and many other questions, as well as to explore and specify the mechanism of capital formation in the domestic economy, the goal of this paper is to identify and evaluate the factors of capital demand in the Republic of Macedonia, as well as to explore: if the low tax rate policy had any significant role for domestic investment? Based on the concept of the cost of capital from the methodological frame of METR, developed by Devereux & Griffith, the tax component was separately examined from the non-tax (economic) component of the cost of capital, in order to quantify their individual contribution on capital stock. Considering the results from the analysis, a critical assessment is given on the current set of policy measures as well as recommendations for new investigations in the field of fiscal and tax policy. At the end, who knows to answer the question: are taxes "necessary evil" or "blessing in disguise"?

Property taxes are one of the most essential taxes for the local authorities in anycountry. They are the main source for providing the municipality with finance in orderto provide public goods and services. The last decade of unstable fiscal policy inducedthe necessity to readdress the role and the potential for reform or modernization ofthese sort of taxes. Considering the ever-growing thirst for larger expenses and goingforward with fiscal decentralization process in North Macedonia, the local governmentsare confronted with the need to secure more finances. Therefore, the goal is to examinethe current structure of property taxes in North Macedonia, compare them to somecountries in Europe and finally to propose actions regarding some changes in local taxpolicy in order to improve the tax collection. Those changes should follow the growinginequalities among citizens in the country. In most developed countries the volume ofproperty tax involves real estate and personal property, like vehicles, movablehousehold items. Even some countries take into consideration the ownership of realestate in other countries around the world in order to really detect the wealth of somepeople. The last reaction from the central government in order to overcome the gap inlocal budgets (the government borrowed 50.000.000 euros) was with intention to reducethe level of debt in most of the local municipalities and to secure their everydayfunctioning. Since then there are a lot of discussions in direction of better functioningof local governments through better collection of local revenues.

This article intends to stress out a fiscal matter, firstly explored by Puviani, known asfiscal illusion. This a case of observing and reacting upon key fiscal parameters, whichcould ultimately impose distortion of fiscal choices made by the electorate. There arenumerous elements like tax structure, public expenditure, that are largely concealed sothe voters don't have the true information about the cost of providing certain publicservices. In the countries with high public expenditure there is a high rate of indirecttaxes present, because they obscure the tax payer perception about the amount of taxpaid. This is how they gather larger amount of tax revenues which are used forfinancing public sector. The high percentage of indirect taxes in public revenues affectsthe demand for public services, because the benefits are clear as day but not theirexpenses. That kind of misperception of public sector expenditures upon existence ofindirect taxes is clear example of fiscal illusion. If the level of fiscal illusion is high, thenthe citizens are not in position to clearly see the government expenses whichcomplicates the control of public money usage. The stimulus for money control islower, because expenses are considered lower then they really are.

This research allows additional ''dynamic'' considerations in the voting process that will be added to the ''static'' interpretation of the model of average voter and hypothesis of Tiebout. It concluded that the changes in the composition of voters will affect the profile of the average voter that will in turn have the effect on the ''demand'' for public goods, resulting from the creation of ''new'' average voter. This means that: 1) individuals, seeking to maximize their preferences, will adapt their behavior to the applied governmental policies; and 2) legislators and public officials, seeking to maximize their political profits, will meet the demand generated by the ''dynamic'' average voter. A key element of the model of public choice is the recognition of the existence of a circular causal link created by the decisions of the average voter with government policies. This implies that changes in government policies are endogenous to the system and are created with the implementation of the policies themselves.

The struggle against the enlarged public debt has finally ended with widespread rise of mandatory tax rates across the European countries and worldwide. Surprisingly, the Republic of Macedonia (RM) has managed to preserve its tax policy relatively unaffected, despite the negative trends - but only temporarily. Recent announcements made by the new government to raise the tax rates in near future echoed very unpleasantly across the business community, declaring the ending, in that context, of the era of low tax rates. The work in this paper is intended to measure the level of tax burden at the shareholder level in Macedonia over the period from 2006 to 2017, which is known as the "golden period" of low tax rates. Relevant measurements used for the purpose of this research are: the cost of capital, the effective marginal tax rate (EMTR) and the effective average tax rate (EATR). The applied measurements are correspondent to the fundamental methodology according to the Devereux-Griffith approach, recommended by the EU Commission. This analysis and its result are complementary to our previous findings about the effective tax rates at corporate level. Hopefully, they will reconfirm and extend the general picture of the RM as one of the most tax favorable country for investment in Europe….so far. Keywords Corporate Income Tax (CIT), Personal Income Tax (PIT), double taxation, integrated tax system, cost of capital, Effective Marginal Tax Rates (EMTR), Effective Average Tax Rates (EATR), Republic of Macedonia (RM).

After decade of sluggish growth in many countries caused by the economic crises, governments inclined towards expansive fiscal policy expressed through decrease in tax rates and increase in public spending. The serious expansion followed by broad and diversified fiscal measures in public spending come to an end. Most developing countries build a higher ratio of debt to GDP that influenced on fiscal policy. The focus now is on the revenue side or exactly on tax revenues. These revenues become necessary for governments, because they impact the poverty, invest in projects that impact on the development, provide public services and the most important they build the infrastructure for long term growth. Furthermore, most of the developing countries face serious problems described through small tax base, large informal economy, weak government institutions, untruthful and corruptive administration, low levels of GDP per capita, low level of domestic savings, low levels of domestic investments, and as usually follows high rates of tax evasions by elites. All these factors were the reasons why many countries in the past inclined towards external sources for funding the government expenditures. But now we have announcements by many countries towards changes in the tax regimes with intention to impact the domestic sources of funding. That kind of action from the left governments triggered serious displeasure especially in small developing countries, which until now were used to use flat tax rates. These shift in tax policy opened one intriguing question about tax compliance, which is inevitably correlated with the concept of tax culture. This concept is new, and its main goal is to comprehend people's behavior in fulfillment of their obligations towards the government. Keywords Tax culture, tax compliance, tax discipline, tax morale, tax revenues.

This article represents an extensive analysis of the reliable tax burden indicators on corporate income in the Republic of Macedonia (RM). It is obvious for the majority of European Union (EU) countries that the already developed tendencies of increased tax rates as an appropriate answer for the ongoing economic crises and the enlarged public debt are not working. On the other side, Macedonia is one of the few countries that has managed to keep its tax policy relatively unaffected and unchanged by the actual crisis. The purpose of this paper is to establish and analyze the most important corporate income tax (CIT) burden measures in the domestic economy. They include the general indicators of the CIT burden, such as the statutory tax rate, tax revenue structure and the CIT/GDP ratio, as well as the measurements of effective tax rates. The last group of indicators commonly consists of the cost of capital, the effective marginal tax rate (EMTR) and the effective average tax rate (EATR) which in this paper are calculated according to the widely accepted Devereux-Griffith methodology. The results of the analysis will clearly show that the implemented domestic tax policy reforms have transformed this country into one of the most, if not the most favorable tax country for investment in Europe.

The global financial crisis and the debt crisis in the EU imposed some forgotten aspects of the ways in which countries can draw out from such negative developments in their economies. The most recommendable approach from all was the increased involvement of fiscal policy in stimulating the economy, which was based on coordinated approach of more fiscal authorities in order to achieve a stronger effect. In light of such fiscal aspirations of many countries, this paper assesses the fiscal stimulus and the channels through which the effects of changes in fiscal policy instruments are reflected, i.e. the public revenue and public expenditure.

The global financial crisis and the debt crisis in the EU imposed some forgotten aspects of the ways in which countries can draw out from such negative developments in their economies. The most recommendable approach from all was the increased involvement of fiscal policy in stimulating the economy, which was based on coordinated approach of more fiscal authorities in order to achieve a stronger effect. In light of such fiscal aspirations of many countries, this paper assesses the fiscal stimulus and the channels through which the effects of changes in fiscal policy instruments are reflected, i.e. the public revenue and public expenditure.

The paper generally describes the segment of public debt management or especially the structure of public debt. It focuses on different kinds of risks which present potential danger for the public debt explosion. It intends to explain the government goal for borrowing money at lowest rate and sustain the fiscal stability. Also, it explains some practical issues regarding this topic for Republic of Macedonia for the period from 2009-2011. In the process of research were implemented several qualitative methods.

Financial crises had become some of the worst nightmares for a lot of politicians and economist which led a lot of researchers to analyze their implications. In this paper the authors approach fundamentally in describing the types of the financial crises, their characteristics and normally the repercussions that they left behind. If the policy decision makers have more information about the crises, they can be more careful in planning, designing, and implementing some crucial measures in the economic policy. Therefore the efficient prediction along with the experience of a lot of other countries exposed on such economic situations are essential in order to achieve success in sustaining it.