Fiscal challenges for Ukraine and ways to overcome them

Nieizviestna, Оlena and Нєізвєстна, Олена Володимирівна and Неизвестная, Елена Владимировна and Kiyashko, Alina and Кіяшко, Аліна Олегівна and Кияшко, Алина Олеговна (2018) Fiscal challenges for Ukraine and ways to overcome them. Торгівля і ринок України (2(44)). pp. 137-144. ISSN 2079-4762

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Abstract

The most serious Ukrainian financial and economic challenges are considered. An overview of Ukrainian population demographic aging is conducted. It is determined that there is a tendency towards the growth of the elderly in the category of 60 years and older, while in the population of 16-59 years, there is a tendency to decrease. This situation shows an increase in the level of nation aging, which may be one of the reasons for the taxes income lack from wages to the state budget. It is emphasized that the negative effect on the Ukrainian economy of the aging population is amplified by "shadow" economics high level. As a result, the macroindicators dynamics forecast contamination; economics slow erosion primarily in terms of wages fund legalization. It is noted that the majority of Ukrainians do not have enough wages to acquire the necessary living needs, and every second able-bodied Ukrainian citizen works under conditions of secondary, tertiary employment, receiving income in the shadow economy sector that is not taxed. The authors emphasize that even active government actions cannot substantially reduce Ukrainian shadow economics level and reduce its impact on the socio-economic situation in the country. There is pressure increase on social budget items, including retirement benefits increase needs, elderly people treatment expenses, and their social protection. Social protection and social security expenditures level and Ukrainian budget tax revenues level have been analyzed. It is determined that there is an increase in the social protection and social security expenditures in the consolidated budget expenditures. Tax revenues grow at almost the same rate as the Ukrainian Consolidated Budget increase of income. Such situation limits the possibilities for tax cuts and weakening (liberating) fiscal policy. It was stressed that Ukraine needs a new reforms strategy in the tax system. The proposals on minimizing fiscal imbalances are presented. It was emphasized that the fiscal policy improvement should go hand in hand with the Government's labor migration regulation policy, which should, first of all, be conducted through the modernized dynamic internal labor market formation.

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