This MA thesis tries to determine the fiscal capacity od the Republic of Croatia in the 2000.- 2015. timeframe, greatly decided by tax income. To have a better understanding of the paper, terms related to fiscal policy are explained. Key elements of the Republic of Croatia's fiscal policy as well as its development are described and defined. The principles of tax system creation are explained, as it is the biggest subsystem of the fiscal system. The structure od the Republic od Croatia's tax system is shown in its enirety, with each tax having its own definition of the taxpayer, its own tax base and tax rate. Tax revenue analysis has been used the most during the surveying of the Republic of Croatia's fiscal capacity. Tax revenue analysis takes into consideration the economic situation of the Republic of Croatia, legislative changes and reforms, and the position of the Republic of Croatia as a part of the European union. The analysis' results point to high share of tax revenue in the state budget's total revenue, as well as to the fact that the most expensive tax in the Republic of Croatia's tax system is the value-added tax. Value-added tax is an indirect type of tax and it taxes both production and service provision, which means that the Republic of Croatia's fiscal capacity is highly dependant on its degree of economic development. The term „fiscal capacity“ is still relatively unexplored in the contemporary literature. Due to data and measuring instrument insufficiency, the fiscal capacity of the Republic of Croatia is difficult to determine.