Content and Functional Purpose of the Duty in Modern Conditions

Halyna B Pohrishchuk,Ruslan Ye Voloshchuk

doi:10.52566/msu-econ.8(3).2021.123-133

Abstract

The duty as a source of budget formation and a regulator of foreign trade activity contributes to improving the macroeconomic situation and the state's entry into the international trade community. Therefore, the study of the essence and functional purpose of the duty becomes particularly relevant since it makes it possible to increase the efficiency of its functioning in modern conditions. The purpose of the study is to consider the tax and foreign trade nature of the duty, establish its essence and specific characteristics, identify the main functions and substantiate changes in the roles of duty functions in modern conditions. The specifics of the scientific tasks that make up the subject of research required the use of a set of special methods (general scientific and private scientific, theoretical and empirical), the use of which helped identifying the content of the duty, consider its functional purpose and establish the reasons for the weakening of the role of duty functions in different countries of the world. In the course of the study, two approaches to the interpretation of the essence of duty were established: as a tax and as a specific foreign trade payment. The author's definition of the duty was proposed and its main essential characteristics were clarified. It has been established that there are no unified approaches to the definition of duty functions in the scientific literature, and only two main ones (fiscal and regulatory) are substantiated. It was also covered that due to the entry of most countries into the World Trade Organisation and the establishment of restrictions on the growth of customs rates, the regulatory function of the duty is weakening. It was established that in developed countries, due to international restrictions on the application of custom rates, the role of the fiscal function of duty has decreased. It was determined that in less developed countries, in conditions of limited budget revenue sources, the fiscal function of duty continues to be the main one. The practical value of the study lies in the fact that clarifying the content and functions of duty in modern conditions makes it possible to increase the effectiveness of customs tariff regulation to protect national interests during the intensification of international integration processes

Highlights

One of the key roles in state regulation of foreign economic activity is played by the duty
Definition of the term “duty” is enshrined in Article 271 of the Customs Code of Ukraine, according to which duty is “a national tax established by the Tax Code of Ukraine and the Customs Code of Ukraine, which is calculated and paid in accordance with the Customs Code of Ukraine, Law of Ukraine, and international treaties, the consent to bindingness of which is provided by the Verkhovna Rada of Ukraine” [2]
It is worth noting the lack of consensus among scientists to the understanding of the essence of duty since one part of the researchers focuses on the tax nature of the duty, while the other part of the authors focuses on the foreign trade nature of the duty

Summary

Introduction

One of the key roles in state regulation of foreign economic activity is played by the duty. According to Ukrainian and foreign practice, the duty is an important factor in the economic development of the state, a necessary condition for the functioning of the national economy, and a source of budget revenues. Matvienko [13] considered the economic and legal nature of the duty and its essential characteristics as a tax and as an instrument of the state's foreign trade policy. N. Zlepko chose duty as the subject of thesis research [14] and studied the theoretical and financial and political foundations of the doctrine of duty, evaluated the effectiveness of the functioning of customs and tariff mechanism in Ukraine and substantiated the improvement of customs and tariff regulation in the context of nationally favourable integration into the world economic space

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Conclusion