PERSONAL INCOME TAX AS A TOOL OF INFLUENCE ON SOCIAL AND ECONOMIC DEVELOPMENT OF THE STATE

Abstract

The successful implementation of the reforms, aimed at ensuring the economic growth and improving the social welfare, depends on the improvement of functioning of the state budgetary mechanism due to strengthening the role of one of its most important tools, that is, taxation.

The purpose of the paper is to determine the key aspects of the use of personal income tax as a tool of the budgetary mechanism of socio-economic development of the state and scientifically substantiate the areas of strengthening the fiscal and regulatory functions of this mechanism.

As a result of the study, it was found that the personal income tax as a tool of the mechanism of the budget policy implementation by the public and local authorities under current conditions is an important component of tax revenues and, in general, the state budget revenues and it is used to calculate the amount of the basic (reverse) donation in the process of horizontal alignment of the budget revenue capacity and regulation of the welfare of taxpayers and the activities of the tax agents.

Analyzing the influence of the tax on personal income in ensuring the socio-economic development of the state, the problems of tax proceeds, allocation between budgets and the reimbursement of expenses of individuals as the abatement of the personal income tax are identified, and ways of solution to these problems are proposed.

In order to strengthen the fiscal and regulatory functions of the personal income tax, it is proposed:

–       to include the tax on personal income into local budgets, taking into account the place of registration of the taxpayer, but not of the tax agent;

–       to include 25% of the amount of the personal income tax into the revenues of the general fund of the regional budget and make horizontal alignment of the revenue capacity of the regional budgets, taking into account only the specified type of the income;

–       to reimburse expenses of an individual as the abatement of the personal income tax using the budget funds; the tax on personal income is included into the budget revenues, taking into account the norms of allocation of this tax between the state and local budgets, and according to the amount of personal income tax paid to different budgets, depending on the types of income of the payer.