EFFECTIVE TAX SYSTEM AS A DRIVER OF INNOVATION PROCESSES: A COMPARATIVE STUDY OF FINLAND AND UKRAINE

Abstract

This article explores the theoretical and methodological aspects of a country's tax system in terms of its impact on the development of innovation processes. It identifies the role of tax revenues in the economic and innovative development of a state, serving as a primary source of funding for sectors providing public services. The study emphasizes the role of tax policy in the development of a national innovation system, focusing on elements such as startups, venture business, incubators, accelerators, and technology parks within the current business ecosystem. The tax system is defined as a key element in the functioning of a state and the regulation of its economy, considering the needs of innovative structures to facilitate national development. Ukraine and Finland are chosen for the analysis of the impact of the tax system on innovation processes, representing Eastern and Northern Europe, respectively. The study analyzes proportional taxation in Ukraine, including the option of a simplified system, and progressive taxation in Finland, where tax rates increase with income growth. The research highlights significant differences in tax payment culture between the two countries. Finland exhibits a high level of tax culture, supported by the effective use of budgetary funds to create public goods. In contrast, Ukraine has a relatively low tax culture due to the population's low trust in the government and satisfaction with their social needs. The analysis of both countries' tax systems helps determine the role of tax policy in the innovative development of a state and the support of an innovative environment, including the implementation of startup projects.