• Kostyantyn Shvabii
  • Lina Zadorozhnia
Keywords: tax gap, personal income tax, administration of taxes, employment income, tax culture


The article deals with the international practice of tax assessment of personal income tax gap, in particular in Australia, Canada, the United Kingdom, the United States of America and Sweden. The compulsory declaration of incomes of individuals and third party reporting are identified as the main reasons for the small size of the tax gap of employment income in developed countries. The approach to assessing the tax gap from the personal income tax in Ukraine, which is based on the use of household income data, is outlined as well as the prospects of conducting tax gap research on a regular basis.

The tax gap is a valuable source of information about the level of voluntary payment of taxes, the convenience of services provided to taxpayers, the effectiveness of administrative measures implemented by the fiscal authorities, as well as the level of tax culture in general. Reducing the size of the tax gap, under the conditions of the stability of tax legislation and the invariability of the methodology for its measurement, can be evidence of the effectiveness of the work of the fiscal authorities in Ukraine.

Taken into consideration the fact that in Ukraine the part of those who submit their tax returns is insignificant, it is more appropriate to apply a top-down approach of tax gap assessment from personal income tax, using data from the State Statistics Service of Ukraine on household income. Nevertheless, the data received will require a substantial adjustment to the size of the available shadow economy.