“Tax amnesty” in the rule-of-law state: foreign experience, domestic prospects

Abstract

The research paper implements the author’s attempt to critically analyze the novelties provided by the Law of Ukraine “On Amendments to the Tax Code of Ukraine to stimulate the de-shadowing of income and increase the tax culture of citizens by introducing voluntary declaration of assets belonging to them and payment of lump sums.” Based on the active appeal to the previous legislative work and processing of the relevant foreign experience, some prospects for the implementation of the so-called tax amnesty in Ukraine are forecasted.

It has been argued that the current task of the Government of Ukraine is to form adequate mechanisms to ensure the effectiveness of liberalization and taxation of income of individuals and legal entities received abroad.

It has been also pointed out that in the context of the so-called zero declaration, the problem of low-level public confidence in public authorities remains, there is a lack of confidence that the “rules of the game” will not be changed the next day by another law or bylaw, and the subjects of the declaration will be threatened. Given the advantages and risks mentioned above, it has been argued in the paper that today it is impossible to predict the exact scenario of the “zero declaration” campaign in Ukraine.

Based on the experience by Indonesia, Argentina, USA and some other countries of the world in the field of administration of special declaration programs a counclusion has been formulated that it is necessary to approach very carefully and carefully, with perfect preliminary processing, with involvement of experts and representatives of public associations of taxpayers, business associations to the question of the conditions and procedure for administering the tax amnesty program on a national scale. Based on the U.S. example, even a relatively fragmented, specific program of special declaration, which concerned only those taxpayers who did not declare foreign bank accounts and funds placed on them, was initiated only after careful analytical work of the tax office and substantiation of the conclusion that the national tax the authority will not be sufficient to detect and investigate all foreign transactions of domestic taxpayers.