Tax Policy for Economic Recovery and Sustainable Development After COVID-19

Polityka podatkowa na rzecz odbudowy gospodarki i zrównoważonego rozwoju po pandemii COVID-19

Tetiana Kaneva*, Igor Chugunov**, Mykola Pasichnyi***,
Andriy Nikitishin****, Nataliia Husarevych*****
*State University of Trade and Economics, Department of Finance, Ukraine
ORCID: 0000-0002-3302-9593
**State University of Trade and Economics, Department of Finance, Ukraine
ORCID: 0000-0003-4915-1267
***State University of Trade and Economics, Department of Finance, Ukraine
 E-mail (Corresponding Author): m.pasichnyi@knute.edu.ua,
ORCID: 0000-0001-7663-776X
****State University of Trade and Economics, Institute of Trade and Economics,
Department of Finance, Vinnytsia, Ukraine
ORCID: 0000-0002-7951-4017
***** State University of Trade and Economics, Department of Finance, Ukraine
ORCID: 0000-0002-8266-8498

Abstract

The optimal taxation level and tax structure depend on numerous factors and enormously differ from country to country. However, the two mentioned tax policy instruments could ensure economic recovery and sustainable economic growth. This article aims to examine the effects of tax policy on economic development and evaluate the role of appropriate tax instruments in speeding up recovery. The results showed that tax level harms the GDP per capita growth rate in Central Europe and Baltic states over the 2000-2021 period. Another vital finding is the increase in both overall employment and investment to GDP ratio positively affected the real GDP per capita growth rates. In order to foster economic growth government might use tax cuts and other stimuli both for distortionary and non-distortionary taxes. The tax policy’s institutional potential should be improved to neutralize the adverse effects of COVID-19 impact and enhance macroeconomic sustainability.

Key words: taxes, fiscal stimulus, COVID-19, employment, economic development

JEL Classification: H20, H21, O23

Słowa kluczowe: podatki, bodźce fiskalne, COVID-19, zatrudnienie, rozwój gospodarczy

Problemy Ekorozwoju 17(2)2022: 102-109

DOI: 10.35784/pe.2022.2.11

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