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11ECONOMIC SCIENCES
DEVELOPMENT OF THE TAX SYSTEM IN THE CONTEXT OF STRENGTHENING THE FINANCIAL CAPACITY OF LOCAL SELF-GOVERNMENT: PROBLEMS AND WAYS OF
SOLUTION
Galamay R.
postgraduate, Ivan Franko National University of Lviv
Abstract
The article examines the peculiarities of development of the tax system in the context of systemic transformations in the economy and structural reforms in the field of public administration. The main problems of the tax system development in Ukraine are identified. A conceptual model of tax system development in the conditions of strengthening the financial capacity of local self-government is proposed.
Keywords: tax system, local self-government, financial capacity, principles of taxation.
The need to revise the policy of financial support for development of the state, in particular in terms of improving the tax mechanism is an urgent issue, which is associated with transformational changes in public administration and strengthening the role of local government. The necessity of such changes can be explained by following factors: firstly, transformation of budget and tax support for the development of the state in the context of the vector of decentralization and administrative-territorial reform and secondly, systemic subjective and objective reasons for inefficiency and imperfection of the tax system. Objective reasons include: limited financial resources; shifting the tax burden to taxpayers who pay taxes to budgets in a disciplined and timely manner; high level of tax evasion, etc. The subjective ones include: formation of norms and rules of development of the tax system without taking into account the scientific and theoretical principles of taxation; deep contradictions between the tax interests of the state and large taxpayers; the lack of an established strategy for the development of the tax system, accompanied by unsystematic changes and innovations of a situational nature; inefficient tax administration system.
Unlike the systems of developed countries, the tax system of Ukraine does not contribute to the growth of state competitiveness and economic activity of economic entities. The system of budget revenues formation during the years of independence developed in conditions of transition economy and had a fiscal character, but did not focus on sustainable economic growth as a strategic condition for development. This indicates significant distortions in the implementation of functions, which resulted in a negative impact on the socioeconomic development of the state.
In general, the main problematic aspects of the development of the tax system in Ukraine are the following: uneven distribution of the tax burden between taxpayers and high level of tax burden on businesses; suboptimal tax structure; instability of the legislative system in the field of taxation; complexity of the taxation procedure. One of the key problems in functioning of the tax system in Ukraine is a lack of a strategic vision of its development and a well-founded concept of using the tax mechanism.
In the context of systemic sectoral transformations in Ukraine, development of the tax system should be based on a clear definition of national priorities, taking
into account the European integration vector, as well as economic, social, environmental, institutional and innovation factors to overcome these shortcomings.
At the same time, scientists identify reasonable requirements that should be met by an effective developed tax system. Such requirements include following statements: 1) ensuring the convergence of conditions for taxation of income of private individuals and legal entities through the achievement of a gradual equalization of tax rates on individual payments; 2) minimization of costs for the process of taxation of taxpayers, which, however, should not affect adversely the conduction of information activities of development of tax competencies and tax culture, prevention of tax crimes and corruption; 3) focus of the tax system on implementation of sustainable development policy and ensuring the competitiveness of domestic enterprises, increasing employment, development and implementation of environmental measures; 4) formation of taxes as a single integrated system with a clearly defined purpose of collection, coverage of taxable objects, administration algorithms and enrollment budgets; 5) organization of the process of tax collection should result in the achievement of social orientation and equality, the tax burden should contribute to the growth of entrepreneurial activity of taxpayers [2].
по-друге, змшою економiчних концепцш опо-даткування; по-трете, суперечностями мiж потребою onraMi3auii податково! системи та неможливь стю ii здшснення за вщповвдних вихвдних умов.
The substantiation of the priorities of the tax system development is consolidated in the Sustainable Development Strategy "Ukraine - 2020" [1]. Such priorities are: 1) construction of a simple economically fair system, with minimal time to calculate and pay taxes; 2) creating conditions for sustainable development of the national economy; 3) ensuring sufficient filling of the state and local budgets (Fig. 1). The need to change the guidelines of the tax system is caused by the inconsistency of its parameters with the goals and objectives of the modern direction of socio-economic development of the state due to following factors: first, a change in the socio-political organization of society; secondly, changes in economic concepts of taxation; third, contradictions between the need to optimize the tax system and impossibility of its implementation due to appropriate initial conditions.
NATIONAL PRIORITIES OF DEVELOPMENT OF THE TAX SYSTEM
Formation of the lax system, which is simple, economically fair and with minimal time for lax calculation and payment
I
Creating conditions Tor sustainable development of national economy
1
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Ensuring sufficient filling of state and local budgets
DIRECTIONS OF TAX SYSTEM DEVELOPMENT
Optimi/at ion of ihe structure of tax svstcm
Strengthening the capacity of local self-govertuHent
Legislative comphence with EU norms
Upgrading of lax culture
Stimulating economic growth
Formation of a favorable instituí tonal environment
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EXPECTED RESULTS OF THE DEVELOPMENT OF THE TAX SYSTEM
JL JL JL JL JL JL
MACRO-ECONOMIC STABILITY
INCREASE IN BUDGET REVENUES
EFFICIENT IDISTRIBUnON OF TAX niiRDEN
OOP GROWTH
SIMPITFICA- INCRTAStNO
IION AND COMPETI-
AUTOMATION 1IVKNKSS Of
OF 1 AX IHE TAX
ADMINISTRA- SYSTEM
TION
GROW IH OF \\111 -liLING OF
POPI JLATION
Fig. 1. Basic guidelines for development of the tax system in Ukraine
Source: compiled by the author
Development of the tax system in the context of local government reform is driven by the need to achieve efficiency in providing services and their maximum proximity to consumers, improving the management system at the local level, quality solutions and ensuring financial independence of local governments. Therefore, the purpose of development of the tax system in the context of strengthening capacity of local government is formation of a competitive tax system focused on economic growth, promoting inclusiveness, ensuring capacity of the territory and a sufficient level of tax revenues of budgets at various levels. An important requirement for development of the tax system in the period of structural transformations in the system of local self-government is promotion of inclusive local development, which requires stimulating economic and social activity at the local level through efficient use of resources to improve welfare and equal access to opportunities and social services.
Among the key principles, which serve as a basis for development of the tax system, is the generality of taxation, which justifies the obligation to pay taxes for each person who is a taxpayer according to the tax law, as well as equality of taxpayers before the law and prevention of tax discrimination. A scientist I. Yasko notes that equality of taxation is realized in case of of compliance with the following rule: "equal taxes on equal economic opportunities, expressed in terms of income, consumption, value of the taxpayer's property should
give the same consequences, caused by the tax burden" [3]. When taxes result in the same economic and social consequences for all taxpayers, it is appropriate to talk about compliance with the principle of equality, fairness of taxation and political neutrality of the tax system.
The principle of inevitability of liability for violation of tax legislation is of great importance. Taking into account the problem of high levels of tax evasion in Ukraine, compliance with this principle is one of the key for ensuring development of the tax system. At the same time, principle of presumption of legality of taxpayer's decisions is complementary and restrictive. This principle is applied in case of ambiguous interpretation of rights and obligations of statements of legislative and regulatory acts in the field of taxation by taxpayers or/and by the State Fiscal Service, resulting in a decision in favor of each party.
In the context of ensuring the effectiveness of the tax system the principle of stability is also important. It can be implemented at two levels: 1) stability of the taxpayer - involves adaptation of the taxpayer to tax conditions, in particular in the most profitable use of resources and capabilities; 2) stability of the tax authority - involves formation of clear and justified mechanisms for tax collection, accounting and control in the context of interaction with taxpayers. At the same time, the principle of stability is "accompanied" by the principle of flexibility of the tax system. Although they are often
viewed from the standpoint of mutual exclusion, talking about effective development of the tax system they are rather complementary, because formation of taxes, which are stable and unchanged under the influence of economic factors, can result in imbalances and deterioration of the economic situation. Considering taxes not only as a source of filling budgets, but also as factors for stimulation of economic development and investment, even distribution of the tax burden, requirements for establishing and paying taxes should change under the influence of the economic situation. Therefore, it is proven that a requirement of stability of the tax system is flexibility of the tax mechanism.
Among the main principles of development of the tax system are the principles of openness of information on taxation and accessibility. Following these principles while forming or reforming the tax system is the basis for its rationality and efficiency, as compliance with these principles will ensure the necessary permanent relationship of the tax system with the taxpayer and promote development of the tax system in the direction of interaction of all elements and subjects of taxation.
In addition to the principles which serve as a basis for formation and development of the tax system, it is worth noting the need to take into account the principles of local government in decentralization. The development of the tax system in the context of increasing the financial capacity of local governments should be based on a combination of these principles.
First of all, the principle of subsidiarity should be highlighted, which is based on the statement that decision-making on a particular issue should be taken at the level of government, where such an issue arises; accordingly, the provision of public services should be carried out by bodies that are as close as possible to consumers. Thus, the principle of subsidiarity presupposes the formation of a power vertical from the bottom to the top and underlies the organization of public administration on the basis of decentralization. As local government reform in Ukraine is based on decentralization, a new approach to the development of the tax system should be based on the redistribution and implementation of administrative and managerial powers and resource base at one time moving away from a hierarchical system of governance to a high level of local government independence and provision of a limited but effective system of control and supervision over the activities of such bodies.
In addition to principles, which serve as a basis of development of local self-government, the following ones should be singled out: publicity (a principle that provides openness and transparency of governing bodies), complementarity (a principle, which is based on the complementarity of management actions of the subjects of the internal environment by the influence of the subjects of external effect), transparency of power and social relativity (implementation of the principles requires equal conditions for all economic entities), independence (a principle that provides consolidation of local government authorities and relevant sources of revenues), unity (development of an area is provided on
the basis of a common for all participants legal framework, fiscal rules and tax rules, common social and economic policy, certain areas of interaction of budgets of different levels).
Exploring the development of the tax system in the direction of strengthening financial capacity of local governments, it is necessary to emphasize the need for effective accumulation of financial resources through management. Taking into account numerous factors influencing the peculiarities of mobilization of tax revenues to local budgets, the choice of tax instruments should be based on key guidelines, so effective system of taxation can be formed at the local government level only in case of following them. Such guidelines should include: 1) economic efficiency - a criterion, which means that there is no distortion of the behavior of economic entities - taxpayers due to additional financial losses from its payment at the territory of tax collection, i.e. the tax is paid under acceptable for the payer conditions and do not have a negative impact on his life and financial capacity; 2) social justice - a criterion that should be considered in the context of taxation in vertical and horizontal dimensions, which involves, firstly, consideration of solvency of the taxpayer in determining the amount of tax payable, and secondly, ensuring horizontal equality in paying taxes equal for most characteristics of payers; 3) completeness of accumulation - a criterion that takes into account all factors of ensuring full payment of the tax and maximizing the amount of income from its collection; 4) system stability - a criterion that determines the need to form a tax system on the basis of stability and consistency with the possibility of making changes only in case of necessary response to external challenges; 5) transparency and simplicity - a criterion that requires an effective and constant channel of information between tax subjects, as well as formation of a system of tax administration based on clearly established rules and regulations.
The levers of the tax regulation mechanism are used based on these criteria and guidelines for development of the tax system, they include a significant number of tax instruments of economic and administrative nature. Such tools include, in particular: general level of taxation; structure and composition of the system of taxes and fees, which is formed in the context of determining national and local taxes and fees; tax rate; objects of taxation; tax base; tax benefits; determining the composition of taxpayers and fees; the procedure for accrual, withholding and payment of taxes and fees; terms of payment of taxes and fees; the procedure for calculating the tax or fee, etc.
The main areas of use of these tax instruments in the context of strengthening financial capacity of local governments are: 1) effective establishment of local taxes and fees and strengthening the role of local taxes in local budget revenues; 2) maximization of tax collection to budgets, that means establishing effective and efficient interaction of local governments with business entities; 3) ensuring a fair distribution of the tax burden and its reduction while seeking budgetary compensators; 4) strengthening tax control, especially in case of effective interaction between local governments and the state fiscal service, aiming to overcome tax evasion
and maximize tax revenues; 5) formation of conditions for entrepreneurship development at the territory, which is possible through effective interaction with business entities; 6) ensuring effective outreach and interaction between local governments and taxpayers.
Development of the tax system in the context of strengthening financial capacity of local self-government should be built and changed in conjunction with structural reforms, changes in territorial organization and decentralization, should be correlated with budget expenditure policy and aimed at balancing the budget for a long time.
REFERENCES:
1. Decree of the President of Ukraine. Pro Stratehiiu staloho rozvytku «Ukraina - 2020» [On the Sustainable Development Strategy "Ukraine - 2020"] (№ 5/2015 vid 12.01.2015 r.).
2. Bobrovskoi O. Yu. (Ed.) (2017). Potentsial rozvytku terytorii: metodolohichni zasady formuvannia i naroshchennia [Potential of development of territories: methodological bases of formation and increase]. Dnipro: DRIDU NADU, 362 p.
3. Iasko I. V. (2015). Pryntsypy opodatkuvannia [Principles of taxation]. Visnyk Natsionalnoho univer-sytetu "Lvivska politekhnika" [Bulletin of the National University "Lviv Polytechnic"]. Vol. 824, pp. 135-139.
4. Krysovatyi A. I., Melnyk V. M., Koshchuk T. V. (2016). Sutnist ta kontseptualni osnovy formuvannia podatkovoi polityky v umovakh yevrointehratsiinykh protsesiv [The essence and conceptual foundations of tax policy in the context of European integration processes]. Ekonomika Ukrainy- Ukraine economy. Vol. 1 (650), pp. 35-51.
MODEL FOR ESTIMATING CHANGES IN NON-PRODUCTION COSTS IN THE SYSTEM OF CONTROL OVER THE ACTIVITIES OF SUGAR FACTORIES IN VINNYTSIA REGION
Kozachenko A.
PhD in Economics, Senior Lecturer at the Department of Audit and State Control, Vinnytsia National
Agrarian University, Ukraine
МОДЕЛЬ ОЦ1НКИ ЗМ1Н НЕВИРОБНИЧИХ ВИТРАТ В СИСТЕМ1 КОНТРОЛЮ Д1ЯЛЬНОСТ1
ЦУКРОВИХ ЗАВОД1В В1ННИЦЬКО1 ОБЛАСТ1
Козаченко А.Ю.
к.е.н., старший викладач кафедри аудиту та державного контролю, Вгнницький нацюнальний аг-
рарний утверситет, Украша
Abstract
The article proposes a model of control over the assessment of changes in non-production costs of sugar factories, which will allow optimizing their amounts and the impact on expected profits at the micro and macro levels. Methodical approaches to the control of non-production costs are considered, taking into account the rating of sugar factories on the level of effective cost management, which will allow at micro and macro levels to adapt to changes in the competitive environment in market conditions.
Анотащя
У статп запропоновано модель контролю за оцшкою змш невиробничих витрат цукрових заводiв, що уможливить оптимiзацiю Гх сум та впливу на оч^ваний прибуток на мжро- та макрорiвнях. Розглянуто методичнi пiдходи до контролю невиробничих витрат з врахуванням рейтинговоГ оцшки цукрових заводiв за рiвнем ефективного управлшня витратами, що дасть можливють на мiкро- та макрорiвнiв адаптуватись до змiн конкурентного середовища в умовах ринку.
Keywords: non-production costs, control, sugar factories
Ключовi слова: невиробничi витрати, контроль, цукровi заводи
Ефектившсть функцiонування ринку цукру ви-значена факторами, що охоплюють технологiчнi особливосп та розмiри фiнансування. За останш роки прибутки цукрових заводiв знижеш, що вщбу-лось внаслiдок загального скорочення виробничих потужностей та зумовлено коливаннями цiн на цу-кор-сирець. Нерентабельнiсть цукровиробництва спонукае виробникiв до збшьшення цiни реалiзацiï цукру. Слд зазначити, що технологiчна якiсть цукру залежить вiд вмiсту цукрози при прийманнi цукрових буряшв, а внаслiдок отримання втрат поа-вiв вiдiграе не останню роль в процес заготiвлi си-ровини.
Особливосп функцiонування цукрових заводiв обумовленi мехашзмом формування ринку цукру. Технологiчний зв'язок процеав вiдображуе генера-цiю потошв матерiальних та грошових ресурсiв. Основним результатом дiяльностi цукрового заводу е виробництво цукру-тску, пiсля реалiзацiï якого отримуеться прибуток на покриття витрат та розширене вiдтворення виробництва. Поставки цукру здшснюються на внутрiшньому ринку держави та за його межами. Виробництво на внутршньому ринку обмежено квотами, при формуванш яких враховуеться урожай цукрових буряшв поточного маркетингового року та перехвдш залишки мину-
