Economics and management of national economy

Tax gap management: theory and practice

Economic Annals-XXI

Economic Annals-ХХI: Volume 174, Issue 11-12, Pages: 22-28

Citation information:
Kosova, T., Slobodyanyuk, N., Polzikova, H., &  Šatanová A. (2018). Tax gap management: theory and practice. Economic Annals-XXI, 174(11-12), 22-28. doi:  https://doi.org/10.21003/ea.V174-04

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Tetiana Kosova
D.S. (Economics),
Professor,
Donbass State Engineering Academy
39 Mashinostroiteley Str., Kramatorsk, 84313, Ukraine
kosovatd@meta.ua
ORCID ID: http://orcid.org/0000-0002-1859-0542

Nataliya Slobodyanyuk
D.S. (Economics),
Associate Professor,
Donetsk National University of Economics and Trade named after Mykhaylo Tugan-Baranovskyi
16 Ostrovskyi Str., Kryvyi Rih, 50005, Ukraine
slobodyanuk@donnuet.edu.ua
ORCID ID: https://orcid.org/0000-0002-0803-9423

Hanna Polzikova
PhD (Economics),
Prydniprovska State Academy of Civil Engineering and Architecture
24A Chernyshevsky Str., Dnipro, 49000, Ukraine
Polzikovahv62@meta.ua
ORCID ID: https://orcid.org/0000-0003-4946-4538

Anna Šatanová
PhD (Economics),
Professor,
College of International Business,
ISM Slovakia in Prešov
1 Duchnovičovo námestie Str., Prešov, 080 01, Slovakia
satanova@ismpo.sk
ORCID ID: https://orcid.org/0000-0001-6770-7236

Tax gap management: theory and practice

Abstract. Introduction. The focus of the study is determined by the urgency of the task to increase the budgetary income, which is one of prerequisites for successful breakthrough of Ukraine in military-political and socio-economic crisis. Purpose: to ground the concept of application of the gap-management for better sustainability of the budgetary system. The research subject is the views on tax gap prevention, and their effectiveness in domestic practice. We were reviewing theoretical, methodological and practical foundations of tax administration improvement. Methodologically research is based on gap-management theory. Results. Specific misbalances inherent to the tax systems are generalized by the authors, i.e. between the outcomes of progressive and flat taxation, between public income and expenses at different level of government, in foreign economic activity depending on the location of VAT taxation, in the internal processes of defining tax credit on VAT, and in the time gap between consolidation of the GDP and generation of tax income to the budget. Based on critical assessment of the tax risk management, five stages of process were defined: exposure of risks, their evaluation, determination and introduction of the counter-measures, efficiency assessment of the results. Conclusion. The results are grounded in the critical comparative analysis of the practice of tax management in Ukraine and of the established international practices. The international standards of introduction of fiscal transparency, sustainability, and tax risk management were analysed in their interconnection and mutual impact. We introduced the model which explained strategic mechanisms and principles of state tax management by the shift of emphasis in the system of tasks from achieving of the planned indicators of tax income to the budget, to the minimization of the tax gap. On the practical side, our research provides recommendations for long-term prognoses on the tax income and reporting on the fiscal risks.

Keywords: Theory; Methodology; Grounds; Gap Management; Risk; Taxation

JEL Classіfіcatіon: E62; E63; G18; G38; H21; Н22; Н25; Н32; Н61; Н68

DOI: https://doi.org/10.21003/ea.V174-04

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Received 10.11.2018

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