Tax Reforms in Transition Economies – A Mixed Record and Complex Future Agenda

Abstract

The purpose of this paper is to demonstrate the diversified picture of the tax systems and tax reforms in the former communist countries after the first decade of their transition from a centrally planned to a market economy system. While CEB countries are seriously advanced in synchronization of their tax systems with those of the EU, the countries of the Commonwealth of Independent States (CIS) suffer a lot of instability and distortions in this sphere (and Balkan countries staying in the middle between both groups). Thus, the CIS countries, including Russia and Ukraine, face a challenge of further substantial tax reforms related to list of existing taxes and quasi-tax obligations, construction of basic taxes, tax administration and procedures, issue of fiscal federalism (particularly in Russia), and many others. The authors' intention is to give the overall characteristics of the tax systems in two broad groups of countries (i.e. the EU candidates, and the CIS+ countries) with a special emphasis devoted to principal shortcomings of tax regulations, and remaining challenges of tax reform.