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

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  • Sergii Slukhai

    (Faculty of Economics, Kyiv, Ukraine)

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    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.

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    Bibliographic Info

    Article provided by Institute of Public Finance in its journal Financial Theory and Practice.

    Volume (Year): 33 (2009)
    Issue (Month): 1 ()
    Pages: 49-71

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    Handle: RePEc:ipf:finteo:v:33:y:2009:i:1:p:49-71

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    Related research

    Keywords: fiscal autonomy; tax rate discretion; unified small business tax; Ukraine;

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    16. Jens Brøchner & Jesper Jensen & Patrik Svensson & Peter Birch Sørensen, 2006. "The Dilemmas of Tax Coordination in the Enlarged European Union," Working Papers 2006-11, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
    17. Feld, Lars P. & Kirchgassner, Gebhard, 2001. "Income tax competition at the State and Local Level in Switzerland," Regional Science and Urban Economics, Elsevier, vol. 31(2-3), pages 181-213, April.
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