EFFECTIVENESS OF TAX REGULATION OF INCOMES OF INDIVIDUALS

Abstract

Introduction. The article analyzes the income tax revenues of individuals to the budgets of all levels. An evaluation of the results of tax regulation of the incomes of individuals was also carried out. It has been established that the budgetary role of personal income tax is growing. Results. Regarding the regulatory impact of taxation of the population's income, numerous problems were identified and outlined by the author. These are: a high level of population poverty, a high growing differentiation of population incomes, a low level of total population income, a high share of wages in total population income, a low level of passive income of individuals, significant amounts of shadow income of the population, significant budget losses due to outdated and inefficient the mechanism of taxation by personal income tax. The author proposes to solve the problems through the implementation of the regulatory function of the personal income tax. To this end, it is proposed to: reduce the tax burden on citizens who are more economically vulnerable, increase the tax burden on individuals with high incomes. The author substantiates the need to make all incomes of citizens legal for an objective assessment of the standard of living of all natural persons. The author also developed proposals for improving the mechanism of personal income tax taxation. They should take into account the unused possibilities of the regulatory effect of the tax. It is proposed to introduce proportional taxation of the incomes of natural persons, which will allow to implement the principle of fairness of taxation with this tax. Advantages and disadvantages of proportional and progressive taxation are studied. Conclusion. In the author's opinion, the introduction of progression in taxation should be gradual: it is appropriate to introduce one additional scale of taxation every five years. The author also offers the following recommendations: the living wage, which is established for able-bodied persons by law, must correspond to the actual indicators; the amount of the minimum wage must be equal to the subsistence minimum for able-bodied persons; a non-taxable minimum income of citizens in the amount of the minimum wage should be established. Regarding the practical significance of the developed proposals on tax regulation of personal incomes, the author believes that in Ukraine the personal income tax does not yet play a regulatory role. But the foundations are gradually being created to transform the individual income tax model into a competitive one.