THE FEASIBILITY OF INTRODUCING A PROGRESSIVE INCOME TAX SCALE FOR INDIVIDUALS IN UKRAINE

Abstract

Introduction. The article examines the feasibility of introducing a progressive personal income tax (PIT) scale in Ukraine, taking into account current internal and external challenges. It analyses the current tax model, which provides for a single fixed rate of 18%, which does not take into account the socio-economic differentiation of taxpayers and actually deepens the level of wealth inequality. It highlights the growing problem of social justice in a state of martial law, the decline in the middle class's ability to pay, and the drop in the number of active taxpayers due to mass labour migration. Purpose. It argues for fiscal redistribution as a way to protect socially vulnerable groups and build a sustainable budget. Methods. The study examines European experience in applying progressive taxation, in particular examples from France, Germany, Italy, Belgium and Denmark, which demonstrate the effectiveness of a multi-level scale in ensuring tax balance. Results. It has been determined that in Ukraine, significant fiscal potential is concentrated in the high-income segment of the population, but the current system does not encourage them to make a fair tax contribution. The connection between the progressive personal income tax scale and the implementation of the principle of solvency, enshrined in Article 4 of the Tax Code of Ukraine, is revealed. Particular attention is paid to the potential of progressive taxation as a tool for financing post-war reconstruction and social programmes. The article describes a number of advantages of switching to a progressive scale: increased budget stability, reduced tax burden on the middle class, stimulation of income de-shadowing, and others. The article examines draft laws proposing the introduction of progressive taxation, but their common feature is the lack of detailed economic justification of the expected effect of introducing progression. Areas for improvement in fiscal policy are outlined: digitisation of income accounting, creation of a single register of taxpayers, analytical support for changes, legislative support for progressive rates, etc. Conclusion. The article may be useful for researchers, analysts, civil servants, and students of economics who study taxation, social policy, and tax reform. The conclusions formulated in the paper are of practical value for the development of a modern tax strategy in Ukraine in the context of post-crisis recovery.