INTERNATIONAL EXPERIENCE IN REFORMING THE INCOME TAXATION SYSTEM IN POST-PANDEMIC AND WAR PERIODS
DOI:
https://doi.org/10.15407/economyukr.2023.10.044Keywords:
wealth tax; solidarity contribution on the excess profits; martial law; post-pandemic periodAbstract
The international experience in reforming income taxation systems in war and post-war conditions is summarized, in particular, approaches to reforming income taxation systems in the USA, Sweden, Denmark, France and Great Britain are compared. Considered examples demonstrate that despite the low budget efficiency of wealth taxes in many countries of Europe and the world (they did not bring considerable budget revenues and at the same time required significant administrative costs), excess profits taxation has been widely practiced for a long time even after the end of the war, in particular, in the post-pandemic period and during the current energy crisis in the EU countries.
Main views are systematized regarding individual wealth taxation – not so much as a threat of capital outflow and disincentive for capital investments but as an important component of the tax system, which, coupled with other income and property taxes, contributes to the restoration of wealth distribution equality and minimizes opportunities for tax evasion. Attention is focused on the application of excess profits tax by the EU countries as a temporary European solidarity contribution in response to the global socio-economic crisis caused by the negative consequences of the COVID-19 pandemic and the increase in energy prices due to the military aggression of the Russian Federation. The key requirements that individual wealth tax must meet to be introduced in Ukraine are substantiated. They include establishing a tax exemption threshold at a high level, as well as extending it not only to the residents of Ukraine, but also to the citizens of other countries who own assets on its territory, in order to increase the tax’s progressivity and budgetary efficiency.
References
Harris W.C. Secrets of the Celtic tiger: Act two. Issues in Science and Technology, 2005, No. 21(4), pp. 23-27. URL: issues.org/p_harris/
Lunina I., Bilousova O., Frolova N. Tax reforms for the development of fiscal space. Baltic Journal of Economic Studies, 2020, Vol. 6, No. 3, pp. 48-58.
doi.org/10.30525/2256-0742/2020-6-3-48-58
Sokolovska A.M. The rates of budget-forming taxes in Ukraine: is a radical reduction advisable? Economics and forecasting, 2023, No. 2, pp. 66-91 [in Ukrainian].
doi.org/10.15407/eip2023.02.066
Bank S.A., Stark K.J. War and Taxes. Journal of Scholarly Perspectives, 2008, No. 4(01), pp. 69-91. URL: escholarship.org/content/qt0562w1nq/qt0562w1nq.pdf?t=mnar8n
Industry and the weight of taxation. National archives, January 1922. URL: filestore.nationalarchives.gov.uk/pdfs/small/cab-24-132-cp-22-3649.pdf
Hebous Sh., Prihardini D., Vernon N. Excess Profit Taxes: Historical Perspective and Contemporary Relevance. IMF Working Paper, 2022, WP/22/187. URL: www.imf.org/en/Publications/WP/Issues/2022/09/16/Excess-Profit-Taxes-Historical-Perspective-and-Contemporary-Relevance-523550
doi.org/10.5089/9798400221729.001
Sarin N., Summers L., Kupferberg J. Tax reform for progressivity: A pragmatic approach. The Hamilton project, 2020, Jan 28, pp. 317-352. URL: www.hamiltonproject.org/assets/files/SarinSummers_LO_FINAL.pdf
Hope D., Limberg J. The economic consequences of major tax cuts for the rich. Socio-Economic Review, 2022, Vol. 20, No. 2, pp. 539-559.
doi.org/10.1093/ser/mwab061
Frolovа N.B. Income Taxation in U.S.: Current Trends. Statistics of Ukraine, 2019, No. 4, pp. 107-116 [in Ukrainian].
doi.org/10.31767/su.4(87)2019.04.11
Berg Kr., Hebous Sh. Does a Wealth Tax Improve Equality of Opportunity? CESifo Working Paper, 2021, No. 9174.
doi.org/10.2139/ssrn.3885417
Barroso R., N'Gatta D., Ormazabal G. Individual Wealth Taxes and Corporate Payouts. The Accounting Review, 2023, Vol. 98, Iss. 5, pp. 31-60.
doi.org/10.2308/TAR-2021-0475
Tax Law Design and Drafting. V.T. Thuronyi (Ed.). International Monetary Fund, 1996, Vol. 1, Ch. 10. URL: www.imf.org/en/Publications/Books/Issues/2016/12/30/Tax-Law-Design-and-Drafting-Volume-1-1550
Lunina I. Public finance capacity to secure expenditures during the war period and the post-war recovery of Ukraine. Finance of Ukraine, 2022, No. 8, pp. 7-26. URL: finukr.org.ua/?page_id=723&aid=4910 [in Ukrainian].
doi.org/10.33763/finukr2022.08.007
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Economy of Ukraine

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.