№ 8/2022

Fìnansi Ukr. 2022 (8): 52–71https://doi.org/10.33763/finukr2022.08.052

TAX POLICY

SOKOLOVSKA Alla ¹

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

Discussion aspects and consequences of using the concept of tax expenditures

Introduction. The development and implementation of the concept of tax expenditures laid a solid foundation for not only tax, but also budget reforms, the ultimate goal of which is to increase the efficiency of budget funds. Despite this positive aspect of the concept, it has been the subject of heated debate since its inception.
Problem Statement. Discussions about the concept of tax expenditures are not familiar to most Ukrainian scientists and practitioners, but they are important for understanding its essence and importance for the formation of a balanced and transparent tax policy and public administration system.
The purpose of the article is to analyze the controversial aspects of the concept, as well as the consequences of its introduction.
Methods. General scientific methods of cognition are used: critical analysis of the controversial provisions of the concept of tax expenditures; combination of historical and logical, abstract-logical and concrete.
Results. The most problematic aspects of the concept of tax expenditures, which have become the object of its criticism, are analyzed: approaches to determining the benchmark tax system and tax expenditures, as well as methods of their measurement. It has been established that various scientists propose to define the benchmark tax system (structure) on the basis of one of three approaches: normal or normative tax system; benchmark tax system and compromise of the actual (current) tax system and the theoretical ideal. The reasons for criticism, as well as arguments “for” and “against” the existing approaches are revealed. The shortcomings of the most common method of measuring tax expenditures – the revenue forgone method, which does not provide an accurate measurement of budget losses, are analyzed. The reasons for a critical assessment of the consequences of application the concept of tax expenditures in the context of achieving the goals set when it was introduced – narrowing the system of tax benefits, improving the process of forming fiscal policy, increasing the transparency of tax expenditures – are revealed.
Conclusions. It is concluded that critical evaluations of the consequences of applying the tax expenditure concept cannot override its positive impact on tax policy and the tax system, and the main directions of this impact are identified. The trends in the development of the concept of tax expenditures on the basis of generalization of changes that have occurred in the process of its application in different countries are highlighted.

Keywords:concept of tax expenditures, approaches to identification of tax expenditures, consequences of introduction the concept, trends in the development of the concept of tax expenditures

JEL: G18, H21, H25, H30

Sokolovska A. . Discussion aspects and consequences of using the concept of tax expenditures / A. . Sokolovska // Фінанси України. - 2022. - № 8. - C. 52-71.

Article original in Russian (pp. 52 - 71)	Download	Downloads :65
Article original in Ukrainian (pp. 52 - 71)	Download	Downloads :66

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