Tax Reform in the Context of European Integration Processes and the Crisis: Possible Results for Ukraine

Abstract

Introduction. Tax system reform should be built on the basic interpretation of taxes as a means of resources’ reallocation providing with social stability, economy stimulation, social goods’ production, etc. All of the taxes have merits as well as flaws. A typical tax system is a combination of different taxes which, in certain circumstances, requires reformation and modernization. Currently, European integration and crisis represent such circumstances for Ukraine. Meeting requirements and conditions of the EU allows fulfilling society requests and realization of the state commitments. All of the above is possible due to the rational formation and use of public finances one of the main tools of which is tax system optimization. Ukraine should bring the tax system into accordance with the EU standards taking into account the interests of the state and business. Its modernization and prediction for the sustainable development of the business environment will contribute to the increase in the income to the state budget while achieving macroeconomic stability. The matter of tax system reformation is especially acute in crisis since beside threats it creates opportunities for implementation of withdrawn capital tax which will promote business development in the future. Purpose. Justification of the need to implement a tax on capital in Ukraine under the conditions of integration processes and crisis. Results. The current work includes analysis of the main elements of the tax systems of Ukraine and the EU countries. It has been established, in particular, that tax proceedings to the budget constitute the main part of the state budget income in Ukraine as well as in countries- members of the EU. The personal income tax, business income tax, excises tax, value-added tax, in their turn, are the main sources of contribution to the state budget. The experience and results of withdrawn capital tax implementation in some countries in the world and the European Union have been researched. It has been established that an increase in investments and GDP is registered in almost all of the analyzed countries. Conclusions. Implementation of the withdrawn capital tax in Ukraine has been proven to be necessary since it will lead to a decrease in administrative expense and amount of time required to prepare the reports, as well as facilitate running a business, increase the levels of business capitalization, create a more enabling environment for investment and increase investment appeal of Ukraine.