NISPAcee Annual Conference
Paper Details
V. Working Group on Public Sector Finance and Accounting
Author(s)  Sergii Slukhai 
  National Taras Shevchenko University
Kyiv  Ukraine
Paper Name  Property taxation in Ukraine: To be, or not to be – is this the question?
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Paper Abstract  
Abstract not available 
 Preliminary Abstract
Unlike many other transition countries, Ukraine has no explicit property taxation on either the local or the national level. There are some property quasi-taxes like land tax, motor vehicle tax, and natural resource utilization levies which are assigned to the local budgets. But their revenue capacity is very limited due to approaches applied by the state.
The need for introducing the local property tax is based on the fact that current local taxes are far from being satisfactory for financing local governments’ own expenditures with a trend to relative diminishing in importance.
Imposing the local property tax is now a point under dispute. There are a lot of issues that still lack in any reasonable solution: (i) who the tax payer is (legal persons or individuals); (ii) what a tax base is (buildings, inventories or luxuries in possession); (iii) how to assess the value of property given the underdeveloped market relations; (iv) the rates to be implemented; (v) means of social protection of disadvantaged households. The intense drafting of legislation did not produce any feasible results. There is no doubt that this tax should be implemented and assigned to the local authorities, on the one hand. On the other hand, it will make the distribution in society fairer by pushing the better-off social groups (they concentrate very valuable property objects) into the position of making more contribution to funding public outlays. The current situation with the redistribution of wealth in society merely excluded from the tools of public policy is very frustrating.
The introduction of the property tax assigned to the sub-national governments will benefit the urban communities in the first line. Big cities of national and oblast significance will receive a generous source of revenues. But the rural communities will not benefit greatly from this innovation because valuable property objects are concentrated in cities or in neighboring localities. To endow them with revenue sources, one should look for some other possibilities.
The paper aims to analyze the existing proposals concerning local property taxation as reflected in the recent draft legislation with regard to the appropriateness of proposed approaches and their potential capacity to generate sufficient revenue sources for the local government.
We also intend to analyze the alternatives in constructing an efficient property tax in Ukraine and readiness of the local authorities to be engaged in tax administration, as well as availability of information needed to carry out assessment procedures.
Basing on generalization of the world-wide experience in property taxation, the most appropriate tax model for Ukrainian conditions will be elaborated.