TAX PREFERENCES AND THEIR INFLUENCE ON THE INVESTMENT IN UKRAINE

Abstract

The article characterizes the relationship between capital investments and corporate income tax preferences. It determines the low potential of the benefits from the corporate tax preferences in the financial investments of economic entities. The article proves that tax deduction of the personal income tax significantly affects the financial investments of individuals and investment in the development of human capital. Based on the calculation of correlation indicators, the article determines that it is worth paying attention to the mechanism of tax incentives for individuals' investment activity as to the only real incentive to invest for the population. The article emphasizes that the question of the effectiveness of preferential taxation has always been in the focus of theoretical research and practical measures, as it causes the non-receipt of certain sums to budgets of different levels and, at first glance, seems ineffective. The study expresses the view that it is unreasonable to cancel tax privileges. In particular, tax exemptions for VAT, in addition to mitigating its regressive impact on less affluent and socially vulnerable segments of the population, stimulate investment. The article mathematically grounds and systematizes the indicators of regression dependence between the size of tax privileges and capital and financial investment, and investment in the development of human capital. The article determines that in general the size of tax privileges does not affect the volume of tax revenues and does not lead to the significant losses of the state budget. Taking this into account, VAT and land tax deductions for agricultural producers, aircraft, shipbuilding and other strategically important industries need to be preserved and optimized in order to eliminate tax evasion practices. The potential of corporate income tax benefits is not utilized and it does not stimulate the capital investment of legal entities. The article suggests the list of measures for its optimization.

Keywords

• investment
• tax preferences
• corporate profit tax
• development of human capital
• tax regulation of investments
• national economy