Seminarreihe des Arbeitsbereichs Ökonomie am IOS
Zeit: Dienstag, 13.30–15.00 Uhr
Ort: Leibniz-Institut für Ost-und Südosteuropaforschung (IOS); vorerst online via Zoom, Link wird mit den Einladungen verschickt!
Forschungslabor: „Geschichte und Sozialanthropologie Südost‐ und Osteuropas“
Zeit: Donnerstag, 14–16 Uhr (Lehrstuhl) oder 16–18 Uhr (Graduiertenschule und Leibniz-WissenschaftsCampus)
Ort: WiOS, Landshuter Str. 4 (Raum 017)
Dr. Manuela Troschke, IOS
Regarding the quality of the tax system, the reform programme finally mentions that Ukraine holds one of the worst positions in the world - 181st out of 183 ranked economies in the World Bank Doing Business survey - with the tax burden perceived to be extraordinarily high. The Doing Business survey focuses on the perception of entrepreneurs regarding the appropriateness of the tax system and hence might be biased for several reasons. The problem analysis of the reform programme reveals that obviously not only the taxpayers feel very uncomfortable about the tax system, but that the governmental body dealing with taxation from the bottom to the top, from highest legislative powers to lowest executive branches of the tax administration is organised in an inefficient manner.
Administration of taxes is criticised to be inefficient and costly, causing revenue gaps in budget execution and a high degree of shadow economy. Accordingly, tax evasion is reported to be too high, the tax burden is distributed unevenly between different categories of enterprises and sectors, and the tax system in general is not able to fulfil its redistributive task. After this heavy self-criticism, reasons for the malaise - as pointed out in the programme - too many small taxes, frequent changes of the normative basis, non-rational tax exemptions, non-compliance of tax and commercial accounting system and the absence of wealth tax seem to be quite understated. The role of state capture and corruption, prevalent throughout the tax system at all stages is not mentioned at all in the programme.
The programme defines need for reform first of all in the area of tax burden, a problem which can be addressed quite easily in the new tax code which shall enter into force in January 2011. According to the draft law text, corporate taxes will decrease to a flat 19% from 25%, while personal income tax will stay at 15%, with 17% for higher personal incomes introduced as a new, albeit weak, progressive element. All steps aiming at broadening the tax base and harmonising it with EU and OECD standards with respect to transfer pricing are to be introduced via the new tax code and do not seem to be problematic if implemented as foreseen. Regarding improvements in efficiency of tax administration, a risk-oriented system of tax controls shall be introduced, targeting tax evaders in a special way, while "low-risk" groups shall be controlled less frequently. Without corruption control, however, this system does not seem very promising (except for administrative staff responsible for defining low-risk groups and persons belonging to them and who would be a new target group for corruption). More justice in taxation shall be reached via cutting of tax exemptions, especially in the sphere of small and medium business where the system of eased taxation had opened many possibilities for abuse. Redistribution via wealth tax, however, will stay limited taken into account that only real estate above 100 metres square and located in Ukraine will be taxed.
With respect to low tax rates, Ukraine may become a tax haven of the region indeed, as many external experts state and neighbouring countries criticise. From a more encompassing point of view, it is neither granted that tax rates are low enough to combat shadow economy and corruption in the tax sphere efficiently nor that they are high enough to fill budgetary and repayment needs of the country on the long run.