scholarly journals THE DIRECTIONS FOR STRENGTHENING THE FINANCIAL AUTONOMY OF LOCAL SELF-GOVERNMENT BODIES IN UKRAINE UNDER DECENTRALIZATION

2021 ◽  
Author(s):  
Yaroslav Pylypenko ◽  
◽  
Dmytro Nelipa ◽  
Keyword(s):  
Real Estate ◽  
Income Tax ◽  
Financial System ◽  
Personal Income ◽  
Personal Income Tax ◽  
Financial Autonomy ◽  
Local Taxes ◽  
Estate Property ◽  
Local Budget ◽  
The Impact

The purpose of the article is to analyze the impact of decentralization on the local financial system of Ukraine and developing the recommendations for strengthening the financial autonomy of local self-government bodies. By writing the article, the following basic methods of research were used: the methods of abstraction, generalization, induction, deduction, synthesis were applied in the study of the role and place of local budget in the financial system of the state, as well as the system method. The object of research is theoretical and practical aspects of decentralization in the framework of the transformational change of the system of local self-government in Ukraine. Practical implications. The article examines the impact of administrative and financial decentralization processes on the local financial system of Ukraine. It defines the main transformational changes in the local financial system because of the implementation of the restructuring measures. It identifies the risks that affect the financial autonomy of local self-government bodies, and, in particular, the formation of local budget revenues under decentralization: formation of local budget revenues from personal income tax; reduction of income of certain territorial communities as a result of cancellation of the gasoline excise duty income to local budgets; insignificant or missing tax revenues from public utilities; imperfect mechanism for administration of real estate tax and land fees. There are the measures suggested to minimize these risks. In particular, it is necessary to: change the procedure for personal income tax charge (at the place of residence of the natural person); to enhance the control over the effective use of funds by the public utilities; to take stock of all real estate property as well as to make changes to the process of immovable property tax administration other than land tax, in particular, in the taxable base (establishment of the taxable base in terms of market or estimated value of real estate property). Conclusions. Institutional restructuring of the national system of local taxes and fees under decentralization should be considered in the context of building the model of local taxation, in terms of which the powers of local self-government bodies will include the right to introduce a list of local taxes and fees, and tax rates in accordance with the limits established by the law.

scholarly journals Tax decentralization under local government reform conditions

2020 ◽  
Vol 66 (5) ◽  
pp. 93-104
Author(s):  
G. Isanshyna ◽  
O. Dubynska
Keyword(s):  
Local Governments ◽  
Income Tax ◽  
Shadow Economy ◽  
Fiscal Decentralization ◽  
Personal Income ◽  
Personal Income Tax ◽  
Practical Result ◽  
Local Budget ◽  
Decentralization Reform ◽  
The Impact

The primary objective of the paper is to investigate the main directions of decentralization reform, trends in local budget revenues in Ukraine, to assess the impact of decentralization reform on the structure and composition of local budgets financial resources, to identify the ways of their optimization. The main components of decentralization reform, the main practical results of territorial and fiscal decentralization in Ukraine are formulated in this paper. Analysis of the development of voluntary territorial communities association in the country during the last five years is carried out. The principles of public administration and the development of normative regulation of local self-government, voluntary association of territorial communities and their cooperation are investigated. It is determined that the practical result of administrative-territorial decentralization is to ensure the creation of new capable territorial entities – united territorial communities. The practical result of tax decentralization is the increase of financial capacity of the united territorial communities. The dynamics of the share of local taxes and fees in own revenues of the general local budgets fund is considered, special attention is paid to such national tax as personal income tax. The dependence of local budgets on transfers from the state budget is noted. And all this on the basis of achievement the ratio of state and local budget revenues of most EU countries is 50:50. The directions of reducing the risk of financial unreliability of local governments under COVID-19 conditions are determined. The difficulties of tax administration of large taxpayers; the main factors determining the size of the shadow economy in the country are investigated. There is no direct relationship between the level of taxation in Ukraine and the level shadow economy. The assessment of the extent of concealment and incomplete reporting of domestic businesses according to the survey in the framework of the SHADOW project is made. The consequences of increasing shadow economy share in the country are determined. The experience of several European countries in personal income taxation is studied, the peculiarities of granting the right to apply the social tax benefit from the personal income tax is determined. Recommendations for optimizing the taxation of individuals in terms of taxation of dividends are provided in this paper.

scholarly journals FORMATION OF LOCAL BUDGET REVENUES IN THE CONTEXT OF BUDGETARY AND FISCAL REFORMS IN UKRAINE

2021 ◽  
Vol 1 (22(50)) ◽  
pp. 47-54
Author(s):  
Olha Demianchuk ◽  
Natalia Sakharuk
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
Tax Reforms ◽  
Tax Legislation ◽  
Fiscal Reforms ◽  
Local Budget ◽  
Tax Changes ◽  
The Impact ◽  
Different Levels

The article investigates the problem of local budget revenues formation in the context of fiscal reforms in Ukraine. The authors provide definitions of such concepts as "local budget", "budget revenues", "own and fixed revenues of local budgets". The composition of local budget revenues is determined and the peculiarities of their change due to budgetary and tax changes during 2001-2020 are considered. Relevant in this paper is the separation of these changes in a table, which is related to the new versions of the Budget Code, as well as the division of revenues into own and fixed. The impact of budget and tax reforms on filling the revenue side of local budgets, especially revenues from local taxes and fees, is described. The significance of the decentralization process for local budgets in terms of stages of its implementation has been studied. The importance of the personal income tax as the main budget-forming tax in the fixed revenues of local budgets and the change in the norms of its deduction to different levels of local budgets in the process of budget and tax reforms are highlighted. The importance of associations of territorial communities in order to increase their financial independence is described. Emphasis is placed on the importance of adopting a number of bills on the procedure for paying personal income tax, which contribute to the fair distribution of this tax between different territorial communities. The research is to determine the dependence of changes in local budget revenues on changes in budget and tax legislation of Ukraine.

scholarly journals FISCAL RISKS OF SUMY CITY BUDGET EXECUTION IN CONNECTION WITH COVID-19

2020 ◽  
pp. 174-181
Author(s):  
L. Riabushka ◽  
O. Pakhnenko ◽  
O. Kulish
Keyword(s):  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
Single Tax ◽  
General Decline ◽  
Local Budget ◽  
The Impact ◽  
The City ◽  
Fiscal Risks ◽  
Budget System

The article analyzes the revenues of the budget of the city of Sumy and examines the impact of the COVID-19 pandemic on the dynamics of tax revenues of local budgets in 2020. Based on the analysis of local budget revenues, the share of local budget revenues in the Consolidated Budget of Ukraine, and the share of local budget revenues in GDP, it was found that the decentralization reform has increased the independence and financial adequacy of local budgets, but the budget system of Ukraine remains highly centralized. The article analyzes the actual budget revenues of Sumy. It showed the presence of an annual increase in the absolute amount of revenues, but the growth rate of own revenues of the city budget decreased annually during 2017-2019. It is determined that despite the progress made in ensuring the independence and fiscal adequacy of local budgets, the new risks that arose in 2020 in connection with the COVID-19 pandemic and the introduction of quarantine restrictions have worsened the situation at all levels of the budget system and posed significant threats to the implementation of budget targets and maintaining their balance. The general decline in business activity of business entities, rising unemployment and the transition to part-time employment, restrictions on tourism activity have led to a significant reduction in expected revenues from personal income tax, single tax, tourist tax. An additional negative impact on the actual revenues of local budgets was the introduction of legislative initiatives on temporary exemption from taxation and the establishment of other tax benefits, including benefits for the payment of personal income tax; exemption from accrual and payment of land tax in March 2020 and deferral of payment for April 2020; tax holidays for real estate tax; changes in income margins and single tax rates, etc. Given the weakness of the revenue base of most local budgets, it is proposed to implement such measures only taking into account the need to maintain the adequacy of local budgets and minimize the negative consequences of fiscal risks. On the other hand, more effective management of local budget funds, balance and rationality in the use of available financial resources are becoming important.

scholarly journals Evaluation the impact of the personal income tax reform in the Czech Republic in 2021 on effective tax rate and tax progressivity

2021 ◽  
Vol 7 (2) ◽  
pp. 134-145
Author(s):  
M. Krajňák ◽  
Keyword(s):  
Income Tax ◽  
Tax Reform ◽  
Personal Income ◽  
Personal Income Tax ◽  
Effective Tax Rate ◽  
Tax Base ◽  
Tax Rate ◽  
Tax Progressivity ◽  
The Impact ◽  
Income Tax Reform

Legislation governing personal income taxation is often subject to changes. A significant personal income tax reform was carried out in the Czech Republic in 2021. The reform implements a progressive tax rate, changes the way the tax base is determined, and increases the tax relief for the taxpayer. The aim of the article is to evaluate the impact of the personal income tax reform on the effective tax rate and tax progressivity. To that end, methods of regression analysis have been used. The source of information for analysis was the data published by the Czech Statistical Office. It was found that in 2021, in comparison with 2020, the tax burden represented in this study by the effective tax rate, in all cases became lower, approximately by 5%. The main reason for this decline is the adjustment of the method of construction of the tax base, which, for the first time in the history of the Income Tax Act, is gross wages. Until the end of 2020, the tax base was a super-gross wage, or the gross wage increased by social security contribution borne by the employer at his costs. The second factor that reduces the tax burden is a CZK 3,000 increase in the deduction per taxpayer per year. This fact increases the degree of tax progressivity, as confirmed by the results of the progressivity analysis and the regression analysis. The changes that have taken place in the personal income tax this year have a positive impact on the taxpayer, but from the point of view of the state, this reform has reduced the state budget revenues.

scholarly journals Opportunities for Simplification in the Personal Income Tax Systems of the Visegrad Countries

2020 ◽  
Vol 65 (4) ◽  
pp. 531-553
Author(s):  
Éva Bonifert Szabóné
Keyword(s):  
Income Tax ◽  
Policy Instruments ◽  
Degree Of Approximation ◽  
Personal Income ◽  
Tax Burden ◽  
Personal Income Tax ◽  
It Use ◽  
Tax System ◽  
Tax Systems ◽  
The Impact

Due to the numerous factors that can influence the impact of the tax system and redistribution, there is no single correct answer to the question of which composition of economic policy instruments needs to be applied to achieve a desired redistributive effect. The general aim of the study is to investigate in relation to the quantifiable parameters of income tax systems, whether the consideration of the aspects of fairness and justice does have an excessively negative effect on the simplicity of tax systems. The study investigates the possibilities of simplifying the personal income tax system’s composition in some Central and Eastern European countries, while tax burden curves of the system remain as constant as possible. To this end, the study sets up a theoretical, simplified tax model, the parameters of which are determined by a computer program, in order to generate tax burden curves corresponding most closely to the curves of the real tax system. Based on the analysis, it can be established that the theoretical system – in some cases with restrictions – provides a good approximation to the tax burden curves of the investigated countries. The chosen simple model has a good degree of approximation to a real system that does not have significant breakpoints in its tax burden curves, nor does it use a taxation method that fundamentally modifies the system (e.g., splitting). Practical examples help to understand that a complex personal income tax system in a given country is not necessarily the only possible solution to achieve a given tax burden curve, the function may be reproduced with a good approximation constructed from simpler basic elements.

Improving the mechanism of pit collection for community development in the context of decentralization

2021 ◽  
Author(s):  
О. Boiko
Keyword(s):  
Local Governments ◽  
Income Tax ◽  
Well Being ◽  
Local Communities ◽  
The State ◽  
Personal Income ◽  
Personal Income Tax ◽  
Tax Revenues ◽  
Fiscal Efficiency ◽  
Local Budget

Problem setting. In the analysis of any budget, important markers are åðó revenue indicators, which 80% consist of tax revenues. After all, they give the government and citizens an understanding of how capable the communityis, what amount of expenditures can be made from income, and whether the community has can develop and improve the well-being of its inhabitants. Personal income tax (hereinafter – PIT) covers about 60% of tax revenues of local budgets of Ukraine, so its important role for socio-economic development of local communities and regionsis clear.Recent research and publications analysis. The issue of studyingthe effectiveness of the mechanism of PIT payment and its influence on the process of generation of local government revenues have been in the center of research of domestic scientists such as O. Bandurka, N. Dieieva, I. Liutyi, N. Redinaet al. At the same time, the issue of the effectiveness of PIT collection and its importance for the development of communities in the current conditions of decentralization requires further thorough research.Highlighting previously unsettled parts of the general problem. The role and place of personal income tax in the structure of tax revenues of local budgets have been studies in the paper, the essence of the mechanism of its collectionhas been substantiated, the provision on the effectiveness of tax control over the completeness of its revenues have been analyzedand the reasons for reforming its payment procedure by tax agents have been justified.The purpose of the paper is to study the role and place of PIT in the structure of tax revenues of local budgets, substantiate the essence of the mechanism of its collection, analyze PIT administration procedure, makeproposals for improving the effectivenessof fiscal role of this tax for the community development.Paper main body. One of the most important taxes in the system of direct taxation in Ukraine is the personal income tax. Its share in the structure of tax revenues of the consolidated budget in recent years was about 20% – 23% (90% of which – revenues to local budgets, 10% – revenues of the state budget).The procedure for imposition of this taxis regulated by Section IV of the Tax Code of Ukraine, deducted from the income of citizens at a rate of 18%, which applies to almost all types of income of citizens.In the structure of tax revenues of local budgets, its share is the largest one and averages up to 60% of all tax revenues. During the period of 2015 – 2020, the fiscal efficiency of PIT in the structure of its revenues to local budgets was growing every year. Nominal PIT revenues to local budgets increased from UAH 54,9 billion in 2015 to UAH 177,8 billion in 2020.The key factors influencing the nominal growth of personal income tax revenues are inflation, as well as the annual increase in the minimum wage, changes in tax rates and other innovations in tax reforms of the recent years.Given the significant fiscal efficiency of PIT and its influence on budget generation of the communities, we cannot ignore the problematic aspects of its collection that have a direct impact on tax revenues in the structure of the newly formed amalgamated territorial communities, since success and well-being of local communities depends primarily on the amount of financial resources they own.Thus, according to the Budget Code of Ukraine, PITis distributed among the budgets in the following amounts: 60% goes to the ATC budget, 15% to the regional budget, and 25% to the state budget.It is worthnoting that the current rules of tax and budget legislation contain quite clear obligations of tax agents to pay PITtransfers to those local budgets within which territory businesses are located.Nevertheless, there are constant challenges for local governments and their ability to influence entrepreneurs to pay PIT at the location of legal entities and their units, and not at the place of registration of legal entities.Does this mean that a significant number of tax agents do not comply with the requirements of tax and budget legislation?The Law of Ukraine on Local Self-Government in Ukraine (Article 28) entitles local self-government bodies to monitor the compliance with obligations to pay to the local budget at enterprises and organizations, regardless of the form of their incorporation.Conclusions of the research and prospects for further studies. Given the above, business entities are obliged to pay PIT in accordance with current legislation at the place of their actual location, regardless of the place of registration, and local governments are empowered to control the completeness of taxes coming to the local budget and must actively exercise the initiative to provide additional revenues to community budgets.This will allow receiving PIT revenues to the budget of the community where the enterprises directly carry out their activities in order to develop communities and increase their solvency for the welfare of citizens.

scholarly journals Personal Income Tax and Social Security Coordination in Cross-Border Employment – a Case Study of the Czech Republic and Denmark

2019 ◽  
Vol 21 (1) ◽  
pp. 23-41 ◽  
Author(s):  
Jana Tepperová
Keyword(s):  
Social Security ◽  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
The Czech Republic ◽  
Cross Border ◽  
Social Security Contributions ◽  
The Impact ◽  
The Eu

Neither personal income tax nor social security is harmonised within the EU. Social security systems are coordinated at EU level whereas personal income tax in cross-border situations is governed by respective double tax treaties. In most EU countries, personal income tax and social security contributions are relatively distinct payments. This article examines problems surrounding the interaction between personal income tax and social security contributions on a national and international level based on a case study of cross-border employment between the Czech Republic and Denmark. As the Czech and the Danish systems are designed very differently, the case study allows for clear illustration of the issue at-hand. The aim is to identify the elements influencing the impact of different coordination rules in personal income tax and social security contributions, illustrate and discuss the potential problems of such mismatches between the two payments. The impact on final payments differs, not only due to the different levels of coordination of the payments, but also due to the different designs of the two national systems. Thus, it would be very difficult to address all the scenarios with a one size fits all measure for all the EU Member States that would overcome the differences in this coordination.

scholarly journals Personal income tax reform in Latvia: assessment of effect

2019 ◽  
Author(s):  
Larisa Bule ◽  
Līga Leitāne ◽  
Kristīne Rozīte
Keyword(s):  
Income Tax ◽  
Social Insurance ◽  
Personal Income ◽  
Tax Rates ◽  
Personal Income Tax ◽  
State Revenue ◽  
Normative Concepts ◽  
The Impact ◽  
Practical Implications ◽  
Income Tax Reform

Personal income tax (PIT) policy in Latvia has been changed significantly in 2018 with the aim to reduce the tax burden and increase the income of working population by amending progressive tax rates and increasing the non-taxable minimum and minimum wage. Purpose − the aim of this study is to estimate the impact of PIT reform by assessing the effect of implementation of non-taxable minimum, deductions and substantiated spending on the dynamics of income and tax administration efficiency. Research methodology − PIT theoretic and normative concepts have been analyzed; unpublished data on actual wages in 2015−2018 provided by Latvian State Revenue Service and State Social Insurance Agency have been estimated. Findings − the main conclusion of this study is that the aim of the reform has not been achieved: income inequality hasn’t been reduced, an increase of income has been irrelevant, the gains from the reform have become unobtainable for the most unprotected groups because of the insufficient level of income. The implementation of the differentiated non-taxable minimum has generated PIT debts and higher administrative burden. Practical implications − the study may be implemented in case of progressive PIT for the reassessment of the tax framework and its future development. Originality/Value − this study is original, the actual effect of PIT reform in Latvia previously hasn’t been analyzed.

scholarly journals Obszary nieobjęte działaniami uszczelniającymi system podatkowy w Polsce w latach 2015–2019 w zakresie opodatkowania dochodów osób fizycznych – konsekwencje budżetowe, społeczne i gospodarcze

Studia BAS ◽  
2020 ◽  
Vol 4 (64) ◽  
pp. 121-136
Author(s):  
Marta Kluzek
Keyword(s):  
Real Estate ◽  
Labour Market ◽  
Income Tax ◽  
Personal Income ◽  
Fiscal Rules ◽  
The Political ◽  
Personal Income Tax ◽  
Tax Gap

The aim of the article is to review and evaluate selected solutions in the area of personal income tax in terms of their impact on the tax and political gap. The solutions affecting the labour market, taxation of rent and income from real estate transactions were analysed. The author claims that taxation rules for individual sources of income in Poland are not conducive to building tax justice and contribute to deepening the tax gap understood as the sum of the political gap and non-compliance with fiscal rules of taxation by taxpayers.

scholarly journals Exemption of Fiscal Exit Tax: Its Impact on International Flights and Tax Revenue

2015 ◽  
Vol 16 (1) ◽  
pp. 22
Author(s):  
Joko Mariyono
Keyword(s):  
Income Tax ◽  
Time Series Data ◽  
Personal Income ◽  
Series Data ◽  
Government Revenue ◽  
Personal Income Tax ◽  
Econometric Methods ◽  
Asean Member ◽  
The Government ◽  
The Impact

Fiscal tariff is considered as personal income tax, collected in advance when adult people who have been staying in Indonesia for more than 183 days go overseas. The magnitude of tariff was sometime much greater than the airfare itself, particularly for international flight to ASEAN member countries. This study aims to measure the impact of elimination of fiscal tariff applied to international flight passenger departing from Indonesia. Potential loss in government revenue from income tax and number of international passengers were analyzed. This study used descriptive and econometric methods. Annual and monthly time series data were collected for publication of the Indonesian Statistical Agency and Central Bank of Indonesia during the periods 2008-2012. The results show that the elimination of fiscal tariff did not affect the government revenue resulting from personal income tax. The impact of tariff elimination was to increase the rate in number of passengers going overseas.

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