Taxation as a tool of implementation of the EU Green Deal in Ukraine

Abstract

The European Green Deal, a new economic growth strategy, involves changing the model of development of the European continent in the direction of better harmony with the environment. Tax policy can be a valuable tool for state regulation of the green transition. The article aims to answer the question, is the current state of environmental taxation in Ukraine in line with EU best practices? Could we suggest ways to improve domestic tax tools through harmonization with the EU Green Deal? To assess the level of harmonization of environmental taxation in Ukraine and the EU, the sigma convergence method was used for calculation of variance and the assessment of convergence (divergence) of indicators of tax revenues from environmental taxation. The primary areas regulated by environmental taxation are outlined. This step revealed that in Ukraine, the transport tax and energy taxation do not contain an environmental component, and land fees do not use their environmental potential in both Ukraine and the EU. An analysis of the dynamics of environmental payments in the EU and Ukraine was made in terms of convergence (divergence) of indicators. On the basis of the European experience of ecological taxation, new elements to the strategy of reforming ecological taxation in Ukraine were proposed. The reforming of environmental taxation could increase the effectiveness of the incentive function of taxes, simplify and improve the quality of tax administration, promote the formation of a transparent system of state control, and strengthen accountability for corruption and negligence in the public sector.