Taxation in Ukraine: system, structure and innovation

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Taxation in Ukraine: system, structure and innovation

Journal Title: Економіка. Фінанси. Право - Year 2019, Vol 6, Issue

Abstract

Introduction. Nowadays Ukraine's economy is experiencing a period of transformation as the socio-economic, political and law spheres. The tax system is the core financial leverage of influence on business entities activities in the context of the government control. As well the above-mentioned importance of the taxation system is based on the accumulation of material and financial resources that are necessary for socio-economic processes in the state. In the context of Ukraine’s reforms in 2019, the state's influence on economic processes is aimed to restructure the economic system. It should be mentioned that the development of a civilized democratic society requires the application of an adequate tax system. As the tax system ensures the economic growth of the state, today there is a need to investigate the frequent changes in the tax code and their application during entrepreneurial activity. Purpose. The investigation is determined to clarify the establishment of tax code, the influence on the presence general and simplified tax system, as well as the impact of tax code development in 2019 on entrepreneur activity. Results. On a basis of conducted study, the establishment of tax code, application of taxes and fees as well the balance between direct and indirect taxes were considered. As the result of taxes transformation, the rate of the single tax of the tax base was decreased to 22% and the rate of tax on personal income was increased from 15% to 18% from 01.01.2016. The core profit margin remained at 18% and the basic rate of VAT at 20%. As well based on budget structure it was found out that indirect taxes prevail on direct, that is more convenient for taxation for the regulatory authorities. Developments in tax code from 01.01.2019 are aimed to balance the flows into the state budget. There are the main changes: reduction of the non-taxable cost of international parcels from 01.07.2019 from 150 to 100 euros, increasing of environmental tax rates from 01.01.2019, indexation of the rates of excise taxes of tobacco products by 9% from July 1, 2019, improvement of the electronic fuel control system from 01.07.2019, an increase in rental rates for the use of mineral resources for the extraction of oil and condensate from value added tax (VAT), until the end of 2022 will be continued the standard, which exempts the importation into Ukraine of vehicles equipped only with electric motors,. Conclusion. Taking in consideration the above-mentioned information, the key processes of tax system establishment was the reduction of tax rates of taxation characteristic of the market economy, as well as the increasing taxes and fees. Due the experience, a significant part of taxes and fees, which had previously formed the basis of the revenue part of local budgets, was abolished. Based on it a reasonable balance of direct taxes will be a key factor in avoiding negative consequences, namely a decline in living conditions, decline in Ukrainian manufacturing, which is not able to compete with the low price of goods from foreign suppliers. The simplified taxation system differs from the general that enterprises pay a tax on total proceeds, without considering the article of expenses. Thus, enterprises have the opportunity to conduct simplified tax bookkeeping and cost accounting, based on it they will bear lower expenses on accounting. As well the implementation of the innovations in law № 9260 in the tax code allows to increase the revenues to the consolidated budget (in 2019) in the amount of 6.3 billion UAH, of which the state budget will be 5.9 billion UAH that will make a good impact into Ukrainian economy.

Authors and Affiliations

Yevheniia Ihorivna Lysova

Keywords

tax system simplified tax system general tax system single tax business entity tax rate state budget

EP ID EP671358
DOI -
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