Current problems of functioning and directions of improvement of value added tax in Ukraine

Slatvinska Marуna
Doctor of Economics, Associate Professor, Finance Department, Odessa National Economic University, E-mail:Slatma81@gmail.com, ORCID ID: https://orcid.org/0000-0002-7356-1189

Goncharenko Elena
Doctor of Economics, Professor, Dean of Finance and Banking Department, Odessa National Economic University, E-mail:engoncharenko@ukr.net

Kozak Alexander
Postgraduate Student of Finance Department, Odessa National Economic University, E-mail:

Cite this article:

Slatvinska M., Goncharenko E., Kozak A. (2019). Current problems of functioning and directions of improvement of value added tax in Ukraine. Ed.: D.V. Zavadska (ed.-in-ch.) and others [Aktualni problemy funktsionuvannia ta napriamy vdoskonalennia podatku na dodanu vartist v Ukraini; za red.: D. V. Zavadskoi (gol. red.)], Scientific Bulletin of the Odessa National Economic University, No. 9-10 (272-273), pp. 113–126.

Abstract

The article explores the problematic aspects of value added tax collection in Ukraine. It has been noted that the dynamics of changes in the economic environment and the intensification of globalization processes, which are intensifying in the conditions of digitalization, necessitate the formation of an effective and adaptive fiscal policy that would contribute to the formation of a sufficient financial base and the development of the real sector of the economy. It has been emphasized that in this context, taxes have been and remain one of the important instruments of the fiscal policy of the state in the last centuries. However, for each individual country, their number, share in budget revenues, the features of collection and the ratio of direct and indirect taxes differ. It has been proved that for the Ukrainian practice the largest of budget forming taxes is the value added tax. The fiscal efficiency of this tax has been analyzed by calculating the effective rate; efficiency ratio; performance factor. It has been established that the importance of this tax for the economy of the country requires attention, both from scientists and practitioners. Especially in the part of the contradictions between the state and economic entities, which are caused by existing shortcomings in the tax sphere. It has been revealed that the situation is complicated by fiscal asymmetries, which are caused by the growing pace of digitization of the economy. As a result, financial relationships arise in new coordinates not explored previously. It has been established that the current system of accrual and collection of value added tax has several disadvantages, among which are the disadvantages of the electronic administration system, the diversion of circulating assets of economic entities, the risk of technical problems and the associated additional costs for the relevant technical support, the complexity for agricultural enterprises that use special VAT regime and others. Directions for improving value added tax as well as the need to introduce differentiated rates of this tax and to develop measures for unblocking tax invoices in the event of such an event, etc. have been proposed.

Keywords

value added tax, indirect taxes, tax administration, tax system, tax benefit, tax refund.

JEL classification: Е620; DOI: 10.32680/2409-9260-2019-9-10-272-273-113-126

UD classification: 336.02

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