CORPORATE INCOME TAX IN UKRAINE: DISADVANTAGES AND WAYS OF IMPROVEMENT IN THE CONDITIONS OF WAR

Abstract

The article explores the fundamental concept of taxation and its most recognized definitions provided by prominent economists. Special focus is placed on corporate income tax in Ukraine, which plays a critical role in the national fiscal framework, particularly under wartime conditions. The study examines the ongoing challenges of Ukraine's tax policy, identifying key issues such as a high tax burden, administrative complexity, and uneven tax rate structures among different taxpayer categories. Furthermore, the paper underscores the importance of digitalization in reducing business compliance costs, enhancing process transparency, and mitigating corruption risks. A notable section of the article delves into the tax reforms introduced in 2024, particularly the increase in tax rates, which has sparked significant debate about its implications for the business environment. The study presents arguments for and against these reforms, offering a balanced perspective that highlights both potential benefits and drawbacks. Increased tax revenue, for example, can support critical government expenditures, while excessive tax burdens may stifle economic activity and promote tax evasion. The article provides a detailed historical analysis of corporate income tax trends in Ukraine, referencing fluctuations in collection efficiency and legislative changes over recent years. The authors discuss the impact of war on business profitability and the challenges faced by enterprises in meeting their tax obligations. These challenges are compounded by inadequate relief measures and the slow adoption of modern tax administration technologies. Proposals for improving the corporate income tax system include introducing differentiated tax rates based on industry and business size, streamlining administrative procedures, and implementing advanced digital tools for tax collection and compliance. These measures aim to create a fairer and more efficient tax system that supports economic recovery and development during challenging times. In addition, the study critically evaluates the outcomes of tax rate increases in 2024, emphasizing the need for transparent communication of fiscal goals and careful consideration of economic impacts. The authors advocate for targeted tax incentives to encourage investment in infrastructure and innovation while maintaining fiscal discipline. The article concludes with recommendations for policymakers to balance the dual imperatives of revenue generation and economic support. By addressing the identified deficiencies in tax policy and leveraging modern technological solutions, Ukraine can strengthen its fiscal stability and foster a conducive environment for sustainable economic growth in the face of adversity.