THEORETICAL AND METHODOLOGICAL FOUNDATIONS OF CORPORATE INCOME TAXATION IN THE BUDGET REVENUE GENERATION SYSTEM

Abstract

The article summarizes the theoretical and methodological principles of corporate income taxation as a component of the budget revenue formation system, analyzes modern approaches to corporate income taxation, and the impact of corporate income tax on the filling of state and local budgets in Ukraine, and considers directions for improving the corporate income taxation mechanism to increase the efficiency of the budget revenue formation system. The conclusion is drawn that the reform of the corporate income tax system in Ukraine did not bring positive results in terms of activating the activities of enterprises. The reduction of tax rates (for example, the standard tax rate changed as follows: 1992 - 30%, 2004 - 25%, 2015 - 18%) turned out to be insufficient to strengthen the stimulating effect on the growth of economic activity of business entities, on the withdrawal of economic activity from the shadow economy (according to the Ministry of Economy of Ukraine, the level of the shadow economy from 2015 (38%) to 2021 decreased insignificantly - to 31%). Also, ineffective tax benefits from income tax continue to be applied in Ukraine (in total, 69 corporate income tax benefits were in effect in 2022, 120 VAT benefits, and 35 excise tax benefits), which do not fulfill their functions, but on the contrary, taxpayers often abuse the benefits, which leads to significant losses of budget revenues (for example, according to the results of the consolidated reports of the State Tax Service "On Tax Benefits That Are Losses of Budget Revenues", the amount of state budget losses from the use of tax benefits by taxpayers in 2022 amounted to 76.3 billion hryvnias. Of these, corporate income tax benefits led to a shortfall in revenues of 1.2 billion hryvnias). Despite the loss of significant amounts of budget revenues due to the use of benefits, the corresponding impact of the tax on the activities of business entities has not been fully realized, and the domestic profit taxation mechanism does not stimulate expanded reproduction and economic growth in the necessary directions for the country. Even though the domestic practice of taxation of corporate profits over the years of Ukraine's independence has changed, significant imbalances still exist in the internal structure of the corporate profit taxation mechanism, the elimination of which remains necessary and requires appropriate improvement.