WHAT DOES THE 88TH PLACE OF UKRAINE IN THE TAX EXPENDITURES TRANSPARENCY RANKING INDICATE?

Abstract

Introduction. The large absolute and relative volumes of tax expenditures in most countries that submit their reports to the Global Tax Expenditures Database, with insufficient transparency and heterogeneous quality of such reports, are convincing evidence of the need for close attention to them both by researchers and by governments and international organizations. The growing attention to tax expenditures at the international level is confirmed by the creation of the Global Tax Expenditures Database (GTED), and in 2023 – the ranking of countries in the context of the transparency of tax expenditures, measured according to the Global Tax Expenditures Transparency Index (GTETI), which aims to identify weaknesses in tax expenditures reports and direct efforts to eliminate them. Problem Statement. Ukraine belongs to the number of countries that submit their reports on tax benefits, which are losses of budget revenues (tax expenditures), to the GTED. Therefore, its reporting was subject to evaluation, which determined Ukraine's place in the tax expenditures transparency ranking. The purpose of the article is to familiarize the scientific community, government officials and policy makers in Ukraine with information on the tax expenditures transparency rating, as well as to reveal the reasons for the low quality of tax expenditures reports in Ukraine and to outline areas for their improvement. The methods of critical analysis, comparative and structural-functional analysis, analogies and theoretical generalization are used. Results. The article provides a detailed description of the GTETI and its five dimensions (parameters) that can be used to determine the quality of reports, as well as the results of ranking the EU countries and Ukraine according to the regularity, quality and scope of their tax expenditures reports. Ukraine took the 88th place in the ranking among 104 countries, having received 33,2 scores, which is 18,5 points below the average for EU countries. The country received the lowest scores – 3 and 4 – for the public availability of information on tax expenditures and for the methodology and scope of reporting, and the highest score – 12 – for the institutional framework. For the other two parameters – descriptive data on tax expenditures and tax expenditures assessment – Ukraine's indicators are not high, but do not differ significantly from the average for all countries in the ranking. The reasons for the low quality of tax expenditures reports in Ukraine in all parameters have been analyzed, which makes it possible to draw a conclusion that they need to be improved and the main directions for improvement are identified.