THE FISCAL AND REGULATORY ROLE OF PERSONAL INCOME TAX IN WARTIME

Abstract

War is always a tipping point for the economy, because some businesses suspend their operations, the share of funds flowing into the state budget decreases and unemployment rises. During martial law, a certain part of business becomes almost paralysed and halted, but it is necessary try to restore its work gradually. During wartime a fundamental task of the state is ensuring of the economic security. Under martial law, expenditures increase manifold, leading to budget deficits. Therefore, the need to study the fiscal and regulatory function of personal income tax, as the main budget-forming tax in the taxation system, is relevant. The aim of the research is to study the dynamics of personal income tax revenues and assess its fiscal potential as an important component of the taxation system under martial law. According to the goal, general scientific and specific methods have been used in the work: analysis and synthesis for investigation of the object and subject of the research; historical-logical method - for definition of change of taxation rates; generalization method - while studying of receipt of tax to the consolidated budget of Ukraine in dynamics; system analysis - for assessment of tax receipt share to the budget of Ukraine in dynamics, calculation of indexes characterizing the share of personal income tax in the structure of tax payments. In article the dynamic changes in determining the tax rates in the process of formation of fiscal policy in Ukraine, the transition from a differentiated to a universal approach in determining the rates were revealed. The share and receipt of tax to the budget of Ukraine in dynamics was estimated, the indicators characterizing the share of personal income tax in the structure of tax payments were calculated. The modern mechanism of distribution of the tax in the budgets of different levels, the dynamics of receipts to the budget was analyzed and the fiscal indicators of the tax on personal income under martial law were estimated. The peculiarities of functioning of the personal income tax are revealed, the expediency of distribution of its receipts between the levels of the budgetary system and the application of a single rate are substantiated. The role of personal income tax in stimulating the progressive reconstruction of administrative-territorial units has been researched. The results of the study once again confirm the fact that the critical role of personal income tax in wartime is a significant source of receipts to the consolidated budget of Ukraine. The fiscal value of personal income tax is explained its high share in the revenues of local budgets. The social effectiveness of the tax lies in the possibility to influence the evenness of income distribution of the population in the territorial context by the differentiation of rates and tax incentives. The article substantiates the necessity to find a new model of tax system for post-war economic recovery.