A study of the impact of tax policy on the economic development of Ukraine during martial law

Abstract

Abstract: The purpose of the article is to study the impact of tax policy on the country's economic development under martial law, as well as to identify key problems, challenges and areas for improving the functioning of the tax system to ensure the stability of public finances. Methods. The study uses a complex of general scientific and special methods, in particular analysis and synthesis – to generalize the theoretical foundations of tax policy; comparative analysis – to compare pre-war and wartime indicators of tax revenues; statistical method – to assess the dynamics of budget revenues; and forecasting method – to determine the prospects for further socio-economic development. Results. The article reveals the essence of tax policy under martial law and its impact on the economic progress of the state. It is determined that the key task is to ensure the revenue part of the budget in conditions of increasing military spending. It is substantiated that in some cases, increasing tax rates can be an economically feasible tool for financing excessive budget needs. At the same time, it was established that the growth of the tax burden is accompanied by a number of risks, in particular, increased public resonance, increased costs of tax administration and de-stimulation of the labor market. It was proven that excessive fiscalization of the economy can have a destructive effect on economic activity and contribute to the expansion of the shadow sector. Changes in the legal support of the tax system, manifested in the transformation of legislation and taxation mechanisms, were analyzed. The main sources of tax revenues to the state budget were identified, their dynamics and formation factors were assessed in comparison with the pre-war period. Conclusions. It was proven that tax policy is one of the key instruments for regulating the economic system under martial law, but its implementation is complicated by the high dynamism of the environment and the complexity of forecasting economic processes. It was established that the norms of the Tax Code of Ukraine and the principles of monetary policy play an important role in the transformation of tax policy. The need for further improvement of the tax mechanism to achieve a balance between the fiscal needs of the state and the stimulation of economic development is substantiated.