Legal problems caused by deficiencies in the tax legislation of Ukraine

The systemic disadvantage of taxation is the absence of state policy in the field of legal regulation of prices and the absence of a connection between prices and the value added of goods / services. In the Tax Code, there is no definition of value added, and the usual price is used to determine the tax base (by agreement of the parties to the purchase / sale transaction). These shortcomings of the regulatory framework not only allow, but also encourage payers to look for ways to evade (or avoid) taxation, obtain illegal compensation from the budget and export capital abroad. This is facilitated by a certain way of administering VAT, which provides for the introduction of tax legal relations between payers and the use of additional elements of the legal mechanism of tax: tax invoices, tax deductions and refunds from the budget. The tax authorities are unsuccessfully trying to correct the shortcomings of regulatory legal acts by complicating the administrative procedures for collecting VAT. The tax legislation of Ukraine does not allow determine the base of the main taxes unambiguously, contributes to its dilution, the withdrawal of capital to offshore jurisdictions, and generates corruption at all levels of government regulation. Eliminating the noted shortcomings of tax legislation requires defining the concept of value added and establishing its relationship with the price and tax base of VAT, personal income tax, profit tax and the base of social insurance contributions. The amount of taxes paid: VAT, personal income tax, profit tax and social security contributions allows you to calculate a fair market price and ensure macroeconomic stability, an equivalent exchange in the market and automatic control over the fulfillment of tax obligations. It was also proposed to remove unusual elements of the legal mechanism of VAT – VAT refund and input VAT.

added value, factor income, fair market price, taxes base, VAT Gap