TAX INSTRUMENTS FOR ECONOMIC DEVELOPMENT

Abstract

The article deals with revealing the essence of the tax instruments ensuring sustainable economic development. The role of the aforementioned policy’s tax component in the sustainable economic growth regulation was identified. Both theoretical and methodological statements on the tax policy preparation and implementation as an institutional mechanism influencing social and economic processes have been systematized and deepened. It was proved that an optimal set of tax regulation measures could catalyze economic growth and contribute to the realization of the stakeholders interests’ realization. The principles and approaches to the tax policy’s implementation were substantiated. It was pointed out that tax policy should be stable, balanced, scientifically justified and predictable, ensuring harmonization between general public interests and individual activity of the economic agents, preventing social gaps and unfair property stratification. Social justice was considered as one of the main tax policy’s implementation principles, aimed at evaluation of the taxpayers’ actual financials capacity. The peculiarities of the tax policy’s implementation in the European Union member-countries were analyzed. The differentiation in the above states’ tax burden levels over the period from 2014 to 2023 was highlighted. The transformation practices of tax regulation were regarded. It was proved that a decrease in tax burden could be associated with business reactivation and recultivation. Meanwhile, economic liberalization should not be considered as a panacea for economic development. It was specifically mentioned that GDP redistribution throughout public finances might ensure economic sustainability, creating the supportive conditions for the population’s economic activity and social welfare. A prudent balance between the tax system’s profile and the social services’ quality and accessibility for the potential consumers should be found to eliminate the negative effects of market competition. A model for social and economic development tax regulation was proposed.