Formation of Tax Policy in the Countries of the European Union
Titarchuk M. I.

Titarchuk, Mykhailo I. (2023) “Formation of Tax Policy in the Countries of the European Union.” The Problems of Economy 4:191–197.
https://doi.org/10.32983/2222-0712-2023-4-191-197

Section: Finance and banking

UDC 336.14

Abstract:
The aim of the article is to generalize and systematize the provisions on the formation of tax policy in the EU countries. The dynamics of the indicator of the ratio of tax revenues to GDP in 27 EU countries during the period 2013–2022 is studied. It is found that the average value of this indicator for the EU-27 is 37.0%. A rather significant differentiation of the tax burden in the context of European countries is recorded, the lowest value observed in Ireland – 24.0%, and the maximum – in France – 47.4%. In general, a moderate level of tax burden is observed in the sample of Central European and Baltic countries. Using the method of correlation and regression analysis, it is found that for the EU countries in 2013–2022, with an increase in the tax burden by 1 percentage point, the real growth rate of the economy slows down by 0.215 percentage points, and the stochastic dependence is significant, but not too strong. In further research, it is important to pay attention to other factors influencing the growth rate of the real economy. Tax service is a key institution in the field of public revenue mobilization, in the EU-27 countries 62% of the total State revenues are collected by the tax authorities. The article pays attention to the study of the compositional tax structure both in the context of taxation of factors of production and individual taxes. Labor taxes account for the highest share in the tax structure in the EU Member States, followed by consumption taxes, and capital taxes are the least fiscally important. The determinant of the formation of the tax policy of European countries is competition in the international market to attract the main factors of production – labor and capital, which necessitates the creation of favorable conditions for their taxation. In the EU countries, there are unified taxation rules that apply to both minimum tax rates (VAT, excise duty) and control procedures, the principles of production and circulation of excisable goods, etc. In the EU member states, a standard and reduced VAT rate is used, the latter is a fiscal tool for maintaining social stability in society. The priorities of the tax authorities in the EU countries are the improvement of administration procedures, the expansion and modification of digital taxpayer services, the implementation of the institutional model of the State tax risk management and scenario modeling.

Keywords: taxes, tax policy, fiscal efficiency, tax burden, tax structure, economic growth.

Fig.: 2. Bibl.: 14.

Titarchuk Mykhailo I. – PhD, Candidate on Doctor Degree, Department of Finance, State University of Trade and Economics / Kyiv National University of Trade and Economics (19 Kіoto Str., Kyiv, 02156, Ukraine)
Email: ndfi@knteu.kiev.ua

List of references in article

Nikitishyn, A. O. Podatkova polityka v umovakh ekonomichnykh peretvoren [Tax Policy in the Conditions of Economic Transformations]. Kyiv: KNTEU, 2019.
Chuhunov, I., Pasichnyi, M., and Nikitishyn, A. “Dokhody Derzhavnoho biudzhetu Ukrainy v umovakh voiennoho stanu“ [Revenues of the State Budget of Ukraine under Martial Law]. SCIENTIA•FRUCTUOSA, no. 5 (2022): 124-137.
Shvabii, K. I. “Priorytety podatkovoi polityky derzhavy v Ukraini“ [State Tax Policy Priorities in Ukraine]. Svit finansiv, no. 1(66) (2021): 149-162.
Sokolovska, A. M. “Podatkova polityka v Ukraini u 2014-2019 rr.: formuvannia, realizatsiia, otsinka naslidkiv“ [Tax Policy in Ukraine in 2014-2019: Formation, Implementation, Assessment of Consequences]. Finansy Ukrainy, no. 7 (2020): 7-30.
Mawejje, J., and Sebudde, R. K. “Tax revenue potential and effort: Worldwide estimates using a new dataset“. Economic Analysis and Policy, no. 63 (2019): 119-129.
Celikay, F. “Dimensions of tax burden: a review on OECD countries“. Journal of Economics, Finance and Administrative Science, no. 25(49) (2020): 27-44.
Eurostat. https://ec.europa.eu/eurostat
Kelmanson, M. B. et al. Explaining the shadow economy in Europe: size, causes and policy options. International Monetary Fund, 2019.
Stoilova, D., and Patonov, N. “Fiscal Policy and Growth in a Small Emerging Economy: The Case of Bulgaria“. Society and Economy, no. 42(4) (2020): 386-402.
OECD (2022) Tax Administration: Comparative Information on OECD and Other Advanced and Emerging Economies. DOI: 10.1787/1e797131-en
The official website of European Commission. https://ec.europa.eu/commission/index_en
European Commission, CASE, Poniatowski, G. et al. VAT gap in the EU - Executive Summary 2022. Luxembourg: Publications Office of the European Union, 2022.
“Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC“. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32008L0118
Chuhunov, I. Ya. Biudzhetna stratehiia suspilnoho rozvytku [Budget Strategy of Social Development]. Kyiv: KNTEU, 2021.