Conceptual approaches to improving carbon dioxid taxation in Ukraine

The domestic carbon tax needs to improve tax administration to ensure its fiscal efficiency and reduce transaction costs for tax compliance. Despite the fact that in the Tax Code of Ukraine the calculation of such a tax is based on the actual indicators of CO2 emissions, in practice it is based on the amount of resources consumed and the characteristics of the production process. Accordingly, the difficulties in administering this tax are the complexity of tax audits and the need to involve environmental experts. All this does not allow to adhere to the principle of cost-effectiveness of taxation and highlights the need to find opportunities to simplify the process of tax administration on the basis of world best practices. The purpose of the article is to outline conceptual approaches to improving carbon taxation, which will allow Ukraine to simplify tax administration and together with the EU to effectively combat the effects of climate change in order to increase security and create new opportunities for Ukrainian business under the European Green Deal. The methodological basis of the study was the use of a set of general and special methods: generalizations and scientific abstraction, historical and logical, extrapolations, spatial and graphical and tabular methods of visualization. The application of the SWOT analysis method and the systematization of European practice revealed that the most acceptable for Ukraine is the use of tax on CO2 emissions in the form of an indirect tax on energy consumption. Coefficients of carbon content in fuel, calorific value of fuel and its oxidation factor were used to convert the emission base carbon tax into the fuel base carbon tax. The implementation of these proposals will help increase the efficiency of administration of such a tax, as it will: 1) reduce the number of taxpayers through the introduction of the institution of tax agents while increasing the amount of tax paid by one taxpayer; 2) simplify the procedure for calculating the tax base by taxpayers and employees of tax authorities; 3) increase the fiscal efficiency of the environmental tax on carbon dioxide emissions from stationary sources by 50% in the case of setting the CO2 price at UAH 10 per ton (5-fold when setting the CO2 price at UAH 30 per ton in accordance with the proposals of the bill No 5600) and to attract potential revenues from the transport sector in the amount of 0.06% of GDP. The use of practical proposals and recommendations obtained in the article will increase the effectiveness of Ukraine's tax policy by forming a set of measures which will reduce the energy dependence of the national economy, including through incentives for energy-saving and climate-neutral technologies, reduce the burden on the environment, and will help simplify the administration of environmental taxes while increasing their fiscal efficiency. Research materials can be used in the preparation of draft regulations and policy documents in the field of environmental and excise taxation, which is within the competence of the Ministry of Finance of Ukraine, as well as in the formation of proposals, reservations and recommendations to other regulations on improving environmental and excise taxation initiated both by the authorities of the executive power of Ukraine, and the Verkhovna Rada of Ukraine on improving environmental and excise taxation. The theoretical results are the development of a general theory of fiscal administration for environmental and excise taxation.

Areas for improvement in the tobacco excise policy in Ukraine

The article analyses the ways to improve tobacco excise taxation in Ukraine considering a respective EU Member States experience, consequences of national reforms held in previous years, as well as challenges and potential threats caused by the pandemic. A worsening economic situation and the recent decline in income compounded the existing problems related to tobacco taxation in Ukraine. The increase of excise tax rate on cigarettes by 20% annually till 2025 and an inconsistent decision on more than four times increase of excise tax rates on electronically heated tobacco products (EHTP) pose a risk of boosting illicit trade. The advance payment of excise tax on imported tobacco products, in turn, negatively affects finances of importers due to the working capital diversion. Following that, the priority steps with regard to the excise policy of Ukraine should be aimed at: 1) revision of the existing plan of increasing tax rates on cigarettes by slowing down the growth of tax burden and simultaneous expansion of the plan till 2028; 2) correcting the burdensome reform on excise taxation of EHTP to establish more liberalized tax regime 3) switching to payment of excise tax on imported tobacco products during customs clearance. The mentioned initiatives taking into account a strong need to improve a fiscal situation in Ukraine due to the spread of COVID-19 will reduce a negative impact of increasing excise tax rates and administration procedures on tobacco industry. They will also prevent the growth of illicit trade in tobacco products and thus will contribute to improving the efficiency of tax system and strengthening the confidence of business entities.

How to quantify deaths averted derived from interrupted time-series analyses

Background Interrupted time series (ITS) are an important tool for determining whether alcohol control policies, as well as other policy interventions, are successful over and above secular trends or chance. Subsequent to estimating whether a policy has had an effect, quantifying the key outcomes, such as the number of prevented deaths, is of primary practical importance. The current paper compares the results of two different methodological approaches to quantify deaths averted using different two standard populations. Methods Time series methodologies were used to estimate the effect size in deaths averted of a substantial increase in excise taxation in Lithuania in 2017. We compare the impact of a) using ITS methodology vs. fitting the trend before the intervention to predict the following 12 months and comparing the predicted monthly estimates of deaths with the actual numbers; and b) adjusting the time series either using the World Health Organization standard or the age distribution of the Lithuania in the month before the intervention. The effect was estimated for by sex. Results The increase in excise taxation was associated with a substantial decrease in all-cause mortality in all models considered. ITS methodology and using the age-distribution of Lithuania were consistently associated with higher estimates of deaths averted. Although confidence and prediction intervals were highly overlapping, the point estimates differed substantially. The taxation increase was associated with 1,155 deaths averted in the year following the intervention (95% prediction interval: 729, 1,582), corresponding to 2.80% of all deaths in Lithuania in the respective year, for the model selected as best for planning policy interventions in Lithuania. Conclusions Fitting a time series model for the time until the intervention, and then comparing the predicted time points with the actual mortality, standardizing to country-specific weights, was chosen as the best way to derive practically relevant effect sizes.

Excise Tax on Fuel as a Source of Local Self-Government Budgets in the Context of Budget Decentralization

The article is aimed at disclosing the role and significance of the excise tax on fuel in filling local self-government budgets in the context of the implementation of budget decentralization, also disclosing the main aspects of excise tax reform, changes in its distribution between budgets and finding ways to ensure the stimulating impact of excise taxation on the socio-economic development of territorial communities (hromadas). The article describes the steps taken to strengthen the financial capacity of local self-government (changes in the sources of filling the hromadas’ budgets) by introducing budget decentralization, steps to implement decentralization in the sphere of road infrastructure of Ukraine (distribution of functions and powers in the road sector at the subregional level of management and introduction of an updated mechanism for financing the road industry). The significance and role of excise tax on fuel in the formation of budgets of territorial communities in the context of implementation of budget decentralization and decentralization in the road sector are analyzed and disclosed. The main aspects of excise tax reform, changes in its distribution between budgets during 2014-2020 in the context of the implementation of decentralization are presented. A number of substantiated arguments are given regarding the need to preserve the crediting of the excise tax on fuel to the local self-government budgets. The issue of the need to improve the distribution of subventions to roads in order to achieve fairness and eliminate the asymmetry of the financial capacity of territorial communities to develop road infrastructure and ensure the stimulating impact of excise taxation on the socio-economic development of all territorial communities is actualized.

DEVELOPMENT OF EXCISE TAXATION IN CONDITIONS OF IMBALANCE IN REGIONAL BUDGETS

The article is devoted to the development of excise taxation to balance regional budgets. The high importance of excise taxation as a tool of managing regional budget revenues is outlined. Based on the results of the analysis, a number of conclusions about the importance of excise taxation in solving the problem of balancing regional budgets are made. Measures to develop excise taxation are proposed, including the pro-vision of the long-term nature of tax policy through tools for digitalizing tax planning, improving the distribution of excise taxes by levels of the budget system, as well as digital development of tax administration.

Fewer Cancer Cases in 4 Countries of the WHO European Region in 2018 through Increased Alcohol Excise Taxation: A Modelling Study

<b><i>Introduction:</i></b> Prevention of cancer has been identified as a major public health priority for Europe, and alcohol is a leading risk factor for various types of cancer. This contribution estimates the number of cancer cases that could have potentially been averted in 2018 in 4 European countries if an increase in alcohol excise taxation had been applied. <b><i>Methods:</i></b> Current country and beverage-specific excise taxation of 4 member states of the WHO European Region (Germany, Italy, Kazakhstan, and Sweden) was used as a baseline, and the potential impacts of increases of 20, 50, and 100% to current excise duties were modelled. A sensitivity analysis was performed, replacing the current tax rates in the 4 countries by those levied in Finland. The resulting increase in tax was assumed to be fully incorporated into the consumer price, and beverage-specific price elasticities of demand were obtained from meta-analyses, assuming less elasticity for heavy drinkers. Model estimates were applied to cancer incidence rates for the year 2018. <b><i>Results:</i></b> In the 4 countries, &#x3e;35,000 cancer cases in 2018 were caused by alcohol consumption, with the highest rate of alcohol-attributable cancers recorded in Germany and the lowest in Sweden. An increase in excise duties on alcohol would have significantly reduced these numbers, with between 3 and 7% of all alcohol-attributable cancer cases being averted if taxation had been increased by 100%. If the 4 countries were to adopt an excise taxation level equivalent to the one currently imposed in Finland, an even higher proportion of alcohol-attributable cancers could be avoided, with Germany alone experiencing 1,600 fewer cancer cases in 1 year. <b><i>Discussion/Conclusion:</i></b> Increasing excise duties can markedly reduce cancer incidence in European countries.