• Yevheniia Bohatyrova
  • Iryna Martyniuk
Keywords: labor taxation, personal income tax, single social contribution, foreign experience, improvement


In Ukraine, over the years of independence, there have been certain changes in the taxation of labor, but today there are problems regarding the collection of taxes on labor that require an immediate solution. Therefore, it is important to study the genesis of labor taxation in Ukraine and determine the prospects for its development, taking into account international experience and identified shortcomings. The article considers the formation and development of tax on personal income and a single social contribution in Ukraine . Particular attention is paid to the European experience of such taxation. Certain patterns in the taxation of labor in the EU countries were identified, namely, the use of a non-taxable minimum income of citizens and a progressive scale of rates in the taxation of individual incomes, as well as the distribution of the burden of social contributions between employers and employees. All this significantly distinguishes labor taxation in the EU from current labor taxation in Ukraine. Based on the study, a proprietary model of labor taxation was proposed, which provides for the introduction of a non-taxable minimum income of individuals, a progressive scale of personal income tax rates and transfer of part of the burden of ERUs from employers to employees. It has been proven that the proposed model, when applied, will reduce the burden on employers while increasing the taxation of high-income employees, which will help level out incomes and increase working capital of enterprises, escape from the shadow of informal wages while increasing revenues to state trust funds.