Conceptual Approaches to Improving Carbon Dioxide Taxation in Ukraine

in Economy and forecasting (2021), 4

The domestic carbon tax needs to improve tax administration to ensure its fiscal efficiency and reduce transaction costs for tax compliance. Despite the fact that in the Tax Code of Ukraine the ... [more ▼]

The domestic carbon tax needs to improve tax administration to ensure its fiscal efficiency and reduce transaction costs for tax compliance. Despite the fact that in the Tax Code of Ukraine the calculation of such a tax is based on the actual indicators of CO2 emissions, in practice it is based on the amount of resources consumed and the characteristics of the production process. Accordingly, the difficulties in administering this tax are the complexity of tax audits and the need to involve environmental experts. All this does not allow to adhere to the principle of cost-effectiveness of taxation and highlights the need to find opportunities to simplify the process of tax administration on the basis of world best practices. The purpose of the article is to outline conceptual approaches to improving carbon taxation, which will allow Ukraine to simplify tax administration and together with the EU to effectively combat the effects of climate change in order to increase security and create new opportunities for Ukrainian business under the European Green Deal. The methodological basis of the study was the use of a set of general and special methods: generalizations and scientific abstraction, historical and logical, extrapolations, spatial and graphical and tabular methods of visualization. The application of the SWOT analysis method and the systematization of European practice revealed that the most acceptable for Ukraine is the use of tax on CO2 emissions in the form of an indirect tax on energy consumption. Coefficients of carbon content in fuel, calorific value of fuel and its oxidation factor were used to convert the emission base carbon tax into the fuel base carbon tax. The implementation of these proposals will help increase the efficiency of administration of such a tax, as it will: 1) reduce the number of taxpayers through the introduction of the institution of tax agents while increasing the amount of tax paid by one taxpayer; 2) simplify the procedure for calculating the tax base by taxpayers and employees of tax authorities; 3) increase the fiscal efficiency of the environmental tax on carbon dioxide emissions from stationary sources by 50% in the case of setting the CO2 price at UAH 10 per ton (5-fold when setting the CO2 price at UAH 30 per ton in accordance with the proposals of the bill No 5600) and to attract potential revenues from the transport sector in the amount of 0.06% of GDP. The use of practical proposals and recommendations obtained in the article will increase the effectiveness of Ukraine's tax policy by forming a set of measures which will reduce the energy dependence of the national economy, including through incentives for energy-saving and climate-neutral technologies, reduce the burden on the environment, and will help simplify the administration of environmental taxes while increasing their fiscal efficiency. Research materials can be used in the preparation of draft regulations and policy documents in the field of environmental and excise taxation, which is within the competence of the Ministry of Finance of Ukraine, as well as in the formation of proposals, reservations and recommendations to other regulations on improving environmental and excise taxation initiated both by the authorities of the executive power of Ukraine, and the Verkhovna Rada of Ukraine on improving environmental and excise taxation. The theoretical results are the development of a general theory of fiscal administration for environmental and excise taxation [less ▲]

Ways to improve Ukraine’s carbon tax

Report (2020)

This research paper is an overview of theoretical aspects of carbon taxing. This publication aims to review and summarize the practice of combining the environmental taxation system with the СО2 emission ... [more ▼]

This research paper is an overview of theoretical aspects of carbon taxing. This publication aims to review and summarize the practice of combining the environmental taxation system with the СО2 emission trading system commonly used in the European countries. In the course of the study practical recommendations have been developed focusing on the future of the environmental taxation of greenhouse gas emissions. The results of this study can be used by government authorities and a wide range of stakeholders involved in elaboration of solutions to create and implement the environmental taxation policy [less ▲]

Modernization of the Control System for Production and Turnover of Tobacco Products

Book published by University of the State Fiscal Service of Ukraine - new edition (2020)

The paper systematizes the international experience of the functioning of tracking and tracing tax stamps and tobacco products, namely on the impact of their introduction on the market and tax revenues ... [more ▼]

The paper systematizes the international experience of the functioning of tracking and tracing tax stamps and tobacco products, namely on the impact of their introduction on the market and tax revenues. The arguments on the feasibility of application, functionality, cost of implementation, mechanism of financing of expenses, stakeholders etc. are determined. The technological decisions on tracking and tracking based on tax stamps and product brand tracking criteria are classified. Conceptual approaches to the creation and implementation of an electronic tobacco production control and circulation system in Ukraine are proposed. [less ▲]

Екологічне оподаткування в Україні: стан та перспективи розвитку

Doctoral thesis (2016)

The thesis is devoted to research of theoretical foundations, international and domestic trends of environmental taxation from the perspective of its use to reduce the excessive burden of economic ... [more ▼]

The thesis is devoted to research of theoretical foundations, international and domestic trends of environmental taxation from the perspective of its use to reduce the excessive burden of economic activity on environment. It was developed the theoretical approaches to the study of the essence and public purpose of environmental taxation as a method of reducing the excessive burden on the environment. The features of the essential characteristics of environmental taxes were determined and include: the prevailing regulatory function on fiscal one; focus on harmonization of tax and environmental policies, reducing the tax base; providing commercial attractiveness of innovation and development of „clean” technologies; desirability manifestation of substitution effect; the prevailing of the „polluter pays” principle over paying capacity principle; internalization of negative externalities and minimization of excessive tax burden as a condition of optimal environmental taxes; imperative introducing specific rates of indirect taxes and increasing and reducing of the regulatory potential of environmental taxation depends on determined factors. It was deepened conceptual and categorical apparatus of the theory of taxation by clarifying the definition of „environmental taxes system„ as a combination of taxes and duties (mandatory payments) designed for achieving specific, well-defined environmental objectives which create price incentives for taxpayers to reduce the excessive burden on environment, compensation of environmental damage to society, improving energy and resource efficiency, which ultimately ensures the improvement of the ecological situation and welfare of population. Developed analytical research tool was used for evaluation the effectiveness of environmental taxation, the existing theoretical approaches to its development and implementation in the context of the experience of foreign countries. A structural-functional analysis of the environmental tax was conducted, and it was assessed the efficiency of energy taxes, analyzed the effectiveness of taxes on environmental pollution. That proved that, compared with developed countries, environmental taxes insufficiently perform tasks of catalyzing decoupling ties and unrealized potential of environmental energy taxes, transport taxes, taxes on resources and direct taxes on pollution exists in Ukraine. However, implementation of fiscal potential of environmental taxation should occur in interconnection with the level of purchasing power. It was defined the directions of realization of the energy taxes potential, on pollution of environment and the ways of improving information provision of administration of environmental taxes. The conclusion about expediency of introduction of adjustment coefficients tax rates depending on the environmental limits on pollution was made. It was proved the expediency of narrowing the tax base of environmental tax for focusing the regulatory impact of environmental tax on the strategic targets of environmental policy. The introduction of differentiation of excise tax rates on gas oil in Ukraine was proposed, according to environmental standards that operate in Ukraine. The scheme of inter-institutional communication on information provision of environmental taxes administration was created will shape the fiscal authorities, and tax payer’s history to draw conclusions about the completeness fulfillment of tax obligations. [less ▲]