SOCIAL ASPECTS OF INDIVIDUALS’ TAXATION IN UKRAINE

Abstract

The article points up the current problems of individuals’ taxation in Ukraine. It argues that one of the factors of increase in income differentiation of households in recent years is the low efficiency of implementation of the redistributive function of taxes, which does not neutralize unequal distribution of income. The main factors of the fiscal nature of the individuals’ taxation are: a proportional tax system that does not take into account the low discretionary income of the vast majority of the population; low social efficiency of tax allowances and deductions, absence of family taxation. The author describes the advantages and disadvantages of progressive taxation and suggests the introduction of progressive scale with multiple levels of taxing in Ukraine. After conducting of current tax allowances and deductions analysis author recommends to amend the Tax Code for enhancing the social effect of up-to-date income equalization tools, which means to establish non-taxable minimum income from employment at the minimum wage; to remove restrictions on the amount of tax deductions for contributions to charitable foundations of educational institutions; to expand the list of services for children for which a tax deductions can be used; to enlarge the amount of tax social benefits for families with children; to establish additional tax social benefits for workers with dependents (the size of which may be different for different categories of dependents). It is also vital to implement obligatory declaration of income for introduction of family taxation, which not only could allow taxpayers to use tax allowances and deductions, but also might stimulate them to be formally employed, contribute to spreading of digital government services, will give rise to the financial competence of population and improve government control over the tax payments.