Certain aspects of individual income tax

Abstract

The personal income tax is the main budget-forming tax, which plays a significant role in the redistribution of personal income and ensuring budget adequacy. Due to this tax, the state has the opportunity to influence the level of income and savings of citizens, it is a social regulator. The objective of the paper is to form a mechanism for collecting personal income tax in Ukraine and to study the fiscal efficiency of personal income tax and to determine the main directions of personal income tax reform. The paper considers the mechanism of personal income tax collection, which is based on the Tax Code of Ukraine and the main elements of the taxation system. It is proved that the tax system of Ukraine is characterized by instability, fiscal orientation with a limited and poorly developed regulatory function. The foreign experience of personal income taxation, tax rates and features of taxation is investigated in this paper. In foreign countries, tax rates are progressive. First of all, it should be noted that wages make up most of the income of individuals, and sometimes it is the only source of income. Taking into account the fact that Ukraine does not apply progressive personal income tax rates, this causes social injustice. It is proposed to use the concept of marginal income and not to tax income in the form of wages in the amount of the minimum amount set for each year. One of the important aspects of reforming the tax system of Ukraine is the introduction of a single reporting on personal income tax and a single social contribution filed by tax agent. It is proposed to declare income and disclose information about the property status of all individuals for the previous year. This will help to control and compare the payment of personal income tax with other tax reports and fill the state budget. Establishing a tax culture of taxpayers and their cooperation with fiscal officials requires some time, during which they must actively carry out explanatory work by fiscal officials and implement a system of preventive measures against tax evasion or concealment of income, and then apply a strict system penalties to the payer. According to this system the payer is unprofitable to hide income, as the fine exceeds its size. These measures will not only ensure the implementation of the regulatory but also the fiscal function of the tax.