FISCAL FACTORS INFLUENCE ON INVESTMENT CLIMATE IN UKRAINE
Abstract
At present, Ukraine is in a situation of acute military conflict and systemic crisis, which makes it an absolutely unattractive investment country. Taxes are the main levers that a country can use to create an investment climate, because taxes are a major budgetary source
Factors affecting the investment climate can be divided into two types. Objective factors are natural climatic conditions, availability of raw materials, access to the sea, geographical location, arable land, demographic situation and more. Subjective are macroeconomic indicators, regulatory factors, taxation, information support, market environment, political factors, social and socio-cultural factors, organizational and other factors.
In order to stimulate investment, the state resorts to various types of tax preferences, which cause tax losses, the size of which is very high. The main purpose of tax regulation of investments is to use certain incentive instruments to increase the investment activity of all subjects of economic relations. This should help to increase the volume of investment resources in the economy, the number of innovative enterprises, the profitability of economic entities, income of the population, the level of gross domestic product.
According to the study, Ukraine receives significantly more foreign investment than it invests. Changing the tax burden affects the foreign investment process. But even its considerable reduction does not guarantee a sharp inflow of foreign capital. This is related to the political and economic problems of the country.
According to the tax regulation of investments, the most effective are the benefits from the income tax. However, significant losses of the state budget revenues from the provision of VAT benefits do not affect the volume of capital investments.
The tax burden is not the only tax instrument affecting investment. Others include tax breaks, tax credits, and accelerated depreciation. Only complex changes in the tax system can increase the country's investment attractiveness.
