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№ 12/2015

№ 12/2015

Fìnansi Ukr. 2015 (12): 12–31

TAX POLICY

SOKOLOVSKA Alla 1

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


The concept of liberal tax reform: feasibility and opportunity of implementation in Ukraine


Based on the analysis of economic and fiscal consequences of liberal tax reforms in the EU member states during the 1990s and 2000—2014 the necessity and possibility of liberal tax reform in Ukraine are substantiated. It is established that introduction of a flat income tax rate in five post-socialist EU member states, which is accompanied by simultaneous significant reduction in the rates of these taxes, had mostly positive economic and fiscal consequences. It is found that in the context of the impact on macroeconomic dynamics liberalization of tax systems was the most successful in Slovakia and Estonia. However, in Slovakia, reduction of the tax burden along with the growth of public spending led to fiscal imbalances and, as a result, to implementation of “excessive fiscal deficit procedure”, by which the country abandoned the idea of a “single tax” and increased the basic tax rate. It is found that generally post-socialist EU member states with the least tax burden — Latvia, Lithuania and Slovakia — are characterized by the most dynamic economies. An exception is Estonia, where the high economic growth is combined with the moderate level of tax burden. The least dynamic economy is in Croatia, Hungary and Slovenia — countries with the highest tax burden. The most appropriate time for liberal tax reform in Ukraine is determined, and the taxes that are advisable to be applied with cut down or unchangeable rates are defined. It is proved that reduction of income tax rates should not be accompanied by a decrease in the VAT rate. The risks of implementation of proposal to introduce a moratorium on amending the tax laws for the three-year period are analyzed.

Keywords:liberal tax reform, economic and fiscal effects of tax reform, tax ranking according to their impact on economic growth, a moratorium on amendments to tax legislation

JEL: G28, H20, H21.


Sokolovska A. . The concept of liberal tax reform: feasibility and opportunity of implementation in Ukraine / A. . Sokolovska // Фінанси України. - 2015. - № 12. - C. 12-31.

Article original in Ukrainian (pp. 12 - 31) DownloadDownloads :375
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