The aim of the article is to assess the impact of taxes on poverty and inequality in Ukraine and provide recommendations on how taxation should be used to address problems of inequality and poverty. The research methodology is based on a combination of linear regression and commitment to equity (CEQ) methodology, which was designed by Lustig to analyse the impact of taxation and social spending on inequality and poverty in individual countries. The dataset consists of data from the World Inequality Data Base and data from State Statistic Service of Ukraine. The analysis shows that income tax reform in Ukraine should not take place in the context of changing tax rates and tax periods but in the context of shifting the tax burden from the poor to the rich and preventing aggressive tax planning. Also, the results of the analysis show that the Ukrainian government’s policy of reducing free education and health services may contribute to poverty if the government does not change its redistributive policies. The article contributes to the academic literature on the impact of taxation on poverty and inequality in developing countries. The practical results obtained in the paper are useful for developing countries’ governments to design poverty- and inequality-sensitive tax policies.
The article is concerned with analyzing the tendencies of taxation of consumption in the OECD countries. The purpose of the article is to examine the tendencies of taxation of consumption in the OECD countries before and during the COVID-19 pandemic. According to the results of the research, it is found that in the period from 1995 to 2018 in the OECD countries there was a relatively stable tax burden formed by consumption taxes, with a gradual decrease in VAT rates. In many countries, the COVID-19 pandemic has caused a significant deterioration in public finances, adding to existing problems such as population aging, climate change, rising poverty and inequality, etc., the problem of reducing tax revenues in consequence of the reduced business activity and increased public spending on health care and economic support programs. It is noted that after the COVID-19 outbreak, the OECD countries periodically make adaptation changes to their policies, mainly aimed at adapting VAT in the context of the spread of digitalization and the need for fiscal support for certain sectors of the economy. The development and administration of VAT policies have become an important component in the most OECD government fiscal policy measures to mitigate the effects of the COVID-19 crisis in 2020–2021. The COVID-19 outbreak has led to a crisis in the healthcare and economic sectors, which has led to the use of measures to contain the pandemic. These measures reduced production, and in combination with the general crisis of the healthcare sector reduced the demand of enterprises and households. The economic policy measures focused primarily on maintaining business liquidity (deferring VAT payment) to help businesses stay afloat and to support the incomes of vulnerable households (applying reduced VAT rates). Prospect for further research is to assess the fiscal effects of modifying the taxation of consumption in the OECD countries during the COVID-19 pandemic.
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