TAX POLICY

SOKOLOVSKA Alla ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0002-1022-8215

Fiscal policy in Ukraine and its macroeconomic implications

The features of fiscal policy in Ukraine in 2010-2014 have been revealed. It was determined that they were resulted by a combination of fiscal expansion and restriction, instead of fiscal consolidation policy, which implementation was required by macroeconomic conditions and fiscal imbalances. As well, it was proved that both in terms of recovery and in a state of stagnation the Ukrainian economy was conducting stimulatory fiscal policy, which was accompanied by a growth of government spending and a deterioration of their structure, which affected the significant decrease in the share of expenditures on economic activity and simultaneous growth of the share of expenditures on public administration, social security and welfare of the population. Those changes in the structure of public spending have strengthened deformation of the structure of an aggregate demand toward consumption and to the detriment of its investment constituent, that paved the way for worsening economic dynamics in the country. The similar macroeconomic effects were caused by a hybrid tax policy, which was accompanied by increased tax burden on taxpayers by taxes on consumption, which had increased not only due to increasing their rates, but more as a result of overpayments of tax that negatively affected the entities. It was established that such overpayments had reduced the tax fiscal potential, had wiped out the impact of fiscal stimulus measures, had become an important inhibition factor of economic processes and deterioration of an investment climate in the country. It was disclosed the reserves of the fiscal consolidation in Ukraine due to changes in fiscal policy, which should be a prerequisite for the tax system reformation.

Keywords: tax policy, budget policy, budget expenditures, government burden on the economy

JEL: H20, H21, H61,H68

Sokolovska A. . Fiscal policy in Ukraine and its macroeconomic implications / A. . Sokolovska // Фінанси України. - 2014. - № 11. - C. 17-32.