TAX POLICY IN THE SYSTEM OF THE ECONOMIC DEVELOPMENT’S PUBLIC REGULATION

Abstract

The article is devoted to the problems of determining the tax policy’s impact on the social and economic development’s regulation processes, taking economic uncertainty and shocks into account. The scientific approaches to determine the tax policy’s role in the system of ensuring sustainable economic development were analyzed, while its vectors and priorities were determined. The institutional tools for the tax policy implementation have been investigated; the main scientific and practical approaches to the tax policy’s component composition were considered, regarding the actual phase of the macroeconomic cycle. Tax structure and the taxation level (tax revenues-to-GDP ratio) were considered to be the fundamental factors influencing the output dynamics. Fiscal authorities should formulate tax policy over the business cycles, regarding traditional criteria like efficiency, equity, and simplicity. National governments should consider the efficient revenue resources with a neutral or slightly negative effect on economic growth (e.g., taxes on consumption, environmental taxation, etc.). Fiscal policy should not undermine the economic agents’ confidence, but should be focused on harmonizing the tax relations. The tax regulation measures’ implementation peculiarities in advanced and emerging market economies were determined. The compositional structure of the EU–27 member-states’ tax systems from 2008 to 2022 has been analyzed. The interdependence between tax structure (regarding its components’ classification) and the level of the national economy’s development has been determined. In emerging markets, the public authorities’ capacity to conduct countercyclical fiscal policy with a massive stimulus package has been limited. Meanwhile, respective governments could expand the tax base and apply moderate tax rates. The above tax policy’s profile could ensure better fiscal conditions for sustainable growth compared with advanced economies. To ensure sustainable development and form the prerequisites to the national economy’s long-term advantages, respective governments should focus on the optimal tax-mix preparation.