TAX POLICY

SOKOLOVSKA Alla ¹

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

Reform of the single contribution for compulsory state social insurance in Ukraine

The common faults of concepts of reduction of the single contribution for compulsory state social insurance are grounded. Fiscal and social results of the most radical versions of its reformation provided by elimination of the single contribution, that should be offset by increased income tax rates are substantiated. An analysis of ongoing reforms of the single contribution is done and seve­ral doubts about its effectiveness in the context of legalization of wages are expressed. The factors that influence on the behavior of the single contribution taxpayers are defined and reform’s contribution to their behavior is evaluated. The arguments that doubt the widespread thesis that the only large-scale single contribution rate reduction may be beneficial for employers and encourage them to legalization of wages. The author presents vision on reformation of the single contribution, the feature of which is a radical rejection of the rate reduction and conduction of its reformation within economic and financial crisis. The features and possible consequences for the state and taxpayers of the proposed reform of the single payment option are analyzed.

Keywords: tax burden on wages, single contribution for compulsory state social insurance, reform of the single contribution, reduction coefficient to the single contribution rate, costs of employer on wages, legalization of wages.

JEL: H21, H24, J31, J38.

Sokolovska A. . Reform of the single contribution for compulsory state social insurance in Ukraine / A. . Sokolovska // Фінанси України. - 2015. - № 7. - C. 7-23.