FISCAL STABILITY OF VAT: APPROACHES TO ANALYSIS

Abstract

The article is devoted to the problems of fiscal stability of VAT. Based on the analysis of the fiscal effectiveness of VAT, it is established that it is necessary to take into account the fact that the actual levels of the tax revenues dynamic series change under the influence of various factors, deviating from the main development trend. Authors identified that evaluation of fluctuations could make it possible to make adjustments to the forecasts and respond more quickly to unforeseen situations. Reducing the VAT rate theoretically creates the conditions for lowering the general price level, including prices for material resources and fixed assets, which could result in increased product competitiveness, lower gross costs, and savings on working capital. Such an effect, however, is not required. In particular, in Ukraine, measures aimed at reducing the burden of indirect taxes have not yet been accompanied by lower prices. The absence of such a reduction means that changes in tax policy in the short term do not affect the macroeconomic situation in the country. According to the macroeconomic effect of reducing tax rate, it comes down with generating additional income, the value of which depends on how much the tax has been transferred to consumers. In turn, an increase in income creates the conditions for the accumulation and cross-industry resources overflow, as well as for the expansion of production volumes (based on the capitalization of a part of profit) in sectors with unsaturated demand. Additional income from reducing the VAT rate with constant price enterprise will receive only if cost of their products are stable. In the case of its growth, primarily under the influence of rising prices for resources (as was the case in Ukraine in many sectors of the economy), a reduction in the tax rate in the short term will not have any macroeconomic effect. Keywords : state budget; taxes; VAT; forecasting of state budget revenues; fiscal stability.