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An assessment of the influence of the corporate sector's credit transactions on Ukraine's budget revenues

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  • D. Tverdokhlibova

Abstract

The article shows that the credits granted by resident banks to the corporate sector (resident banks, resident legal persons, and resident individuals legal persons - individuals - residents) have an impact on Ukraine's budget revenues and assesses this impact for 2006-2015. As to the methodology of assessment, which is based on tax accounting of the credit transactions, it has been proved that the corporate sector's credit transactions are subject to one tax, which is corporate tax. The author identifies five components of profit obtained from the corporate sector's credit transaction (the amount of accrued interests on loans granted to non-payers of corporate tax in national and foreign currencies; the amount of exchange rate differences on loans granted in foreign currency to non-payers of corporate tax; the amount of exchange rate differences on interest indebtedness on loans granted in foreign currency to non-payers of corporate tax; increment of insurance reserves made on loans granted in national and foreign currencies to the corporate sector; and the sum of amount of exchange rate differences on insurance reserves made on loans granted to the corporate sector in foreign currency). Based on the generalized the formula of payments of the corporate tax on credit transactions of the corporate sector, the author calculates the estimates of the impact of such transactions on the amount of corporate tax, which are also estimates of the impact of credit transactions on the revenues of Ukraine's budget. The calculations have proved that the corporate sector's credit transactions increase Ukraine's budget revenues. Definitely positive for Ukraine's budget revenues is the impact of accrued interests on loans granted to non-payers of corporate tax in national and foreign currencies. Other components of profits gained by the corporate sector from its credit transactions have mixed impact on Ukraine's budget revenues, due to jumps of the official exchange rate of the US dollar.

Suggested Citation

  • D. Tverdokhlibova, 2015. "An assessment of the influence of the corporate sector's credit transactions on Ukraine's budget revenues," Economy and Forecasting, Valeriy Heyets, issue 4, pages 118-132.
  • Handle: RePEc:eip:journl:y:2015:i:4:p:118-132
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    File URL: http://eip.org.ua/docs/EP_15_4_118_uk.pdf
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