THE TAX SYSTEM OF UKRAINE IN THE CONDITIONS OF MILITARY STATE AND ITS IMPACT ON INVESTMENT ATTRACTIVENESS

Анотація

The article examines the transformation of Ukraine’s tax system and its impact on the country’s investment attractiveness amid a full-scale war. It analyses the dynamics and structure of tax revenues to the state budget in 2021–2025, identifies key trends in the changes in fiscal potential, and identifies the role of individual taxes in generating budget revenue. Particular attention is paid to the impact of military action on macroeconomic indicators, in particular, on the reduction in economic activity and the changes in the structure of budget revenues. The paper reveals the specifics of tax changes introduced during martial law and their impact on regulatory predictability and investor confidence. It also analyses the dynamics of foreign direct investment in Ukraine, identifying the factors behind its sharp decline in 2022 and subsequent instability in 2023–2025. It also examines the key risk factors that deter investors from investing in the economy of a state of war, and substantiates the ways of providing Ukraine’s investment attractiveness even during a prolonged, full-scale russian invasion. The article outlines the most appropriate areas and mechanisms for ensuring a sustainable increase in the country’s economic attractiveness. The role of financial and institutional support from Western partners and international financial institutions is highlighted. Based on international experience with post-crisis tax reforms (Ireland, Cyprus, and Bulgaria), a conclusion is drawn regarding the advisability of developing a competitive and predictable tax system focused on stimulating investment rather than increasing the tax burden. It is demonstrated that the effectiveness of tax reforms in Ukraine should be based on adapting the best international practices to national conditions, taking into account military challenges, the tasks of post-war reconstruction, and the state's European integration policy.

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