Abstract

This article is concerned with the analysis of the problems of improvement of the instruments of formation and implementation of state tax policy, as under the conditions of appearing crisis tendencies. There is a need for periodic changes in tax legislation. Economic feasibility of the conducted transformations is often put in doubt, by both scientists and practitioners. In this regard common approaches should be developed, excluding the possibility of making wrong management decisions concerning introduction, cancellation or change of existing procedure of particular types of tax exemptions. It is proposed to enter the concepts of necessary and sufficient conditions for the economic feasibility for the made decision to modernize the taxation system into scientific vocabulary. According to the first one of them the introduced changes must meet the basic principles of taxation, and according to the second one they should satisfy the regulating principles. The concept of modernization can be considered economically feasible only when both necessary and sufficient conditions are fulfilled. The basic principles of taxation are well known and determined by the provisions of the fundamental economic theory. The body of governing principles should include the achievement of compliance with the objectives of economic development of the country, income leveling and social protection of the population, the coordination of mechanisms of charging, stimulation of reproductive processes, provision of international tax harmonization and the formation of feedback in the system of tax management. The article has assessed the feasibility of realization of the two concepts of value added tax -as the consumption tax and transactions tax. Its results indicate the compliance with necessary and sufficient conditions of economic feasibility of the first concept. Therefore, the modernization of the taxation of added value within the concept of the consumption tax is more preferable and efficient.

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