Taxation and Self-employment

The paper tests hypothesis that the revenue from taxes that self-employed must pay is affected by macro variables such as change in GDP, unemployment, or the differential in taxation and social security contributions between employees and self-employed. Results of the analysis carried out for 28 European countries and the years 1995-2009 show that the hypothesis cannot confirm the link between changes in GDP or unemployment and the volume of taxes collected from self-employed. Statistically significant at the 5% significance level is only link between the differential in taxation of self-employed and employees at the inclusion of SSC premia paid by employers. Given the low coefficient of determination, the results need to be approached rather pessimistically.