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Inter-Location Small Business Tax Rate Variation in Ukraine: What Is Behind It?

Author

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  • Sergii Slukhai

    (Faculty of Economics, Kyiv, Ukraine)

Abstract

This paper’s aim is to research into the variation in effective tax rates among local jurisdictions of two regions of Ukraine, Ivano-Frankivsk and Vinnitsa, in order to get new insights into the peculiarity of inter-location fiscal competition in the context of a transitional economy. It is argued that, despite a highly centralized taxation system, the room for inter-jurisdictional tax competition is somewhat limited, at least with regard to a unified small business tax for natural persons. This competition could take on a very specific shape because it is closely related to the issue of hidden economy. The study demonstrates that local fiscal policy has a potential to affect the number of business units registered in a specific jurisdiction.

Suggested Citation

  • Sergii Slukhai, 2009. "Inter-Location Small Business Tax Rate Variation in Ukraine: What Is Behind It?," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 49-71.
    • Handle: RePEc:ipf:finteo:v:33:y:2009:i:1:p:49-71
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    References listed on IDEAS

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