PERSONAL INCOME TAX IN UKRAINE: DETERMINANTS` ANALYSIS

Abstract

Further reforming of the Ukrainian tax system in order to improve the mechanism of personal income taxation (PIT) and filling local budgets points out the relevance of the research. The article considers the determinants of personal income tax as an important component of the tax system of Ukraine. The authors analyzed the PIT revenues to the consolidated budget of the country and identified a positive trend of its growth. Determinants and indicators of impact on PIT revenues are highlighted in the study. These factors are divided into following groups: economic, political and legal, demographic, socio-cultural and individual. The influence of main factors (GDP, Employment Rate, Inflation Rate, Average PIT Rate) on the PIT revenue component is considered. Regression and correlation analyses were performed using STATA program, and linear regression was calculated. In order to assess the dependence, countries were clustered according to key factors of their economic development for the period 2009—2019. According to the analysis results, it is determined that PIT revenues are closely dependent on the general macroeconomic situation in the country, and the average tax rate has a significant impact on its revenues.

Keywords

• tax system
• personal income tax
• factors
• analysis
• GDP
• inflation