Inter-Location Small Business Tax Rate Variation in Ukraine: What Is Behind It?
Sergii Slukhai, Faculty of Economics, Kyiv, Ukraine
This paper's aim is to research into the variation in effective tax rates among local jurisdictions of two regions of Ukraine, Ivano-Frankivsk and Vinnitsa, in order to get new insights into the peculiarity of inter-location fiscal competition in the context of a transitional economy. It is argued that, despite a highly centralized taxation system, the room for inter-jurisdictional tax competition is somewhat limited, at least with regard to a unified small business tax for natural persons. This competition could take on a very specific shape because it is closely related to the issue of hidden economy. The study demonstrates that local fiscal policy has a potential to affect the number of business units registered in a specific jurisdiction.
Keywords: fiscal autonomy; tax rate discretion; unified small business tax; Ukraine
Year: 2009 | Volume: 33 | Issue: 1 | Pages: 49 - 71
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