Fiscal Tool for Overcoming Poverty in Ukraine

In accordance with the UN research approximately 80 % of Ukrainians live below the poverty line. The article is concerned with the ways to induce increase in well-being of Ukrainian population through the fiscal tool. The structure of earnings of the Consolidated budget of Ukraine contains the analysis of a portion of mandatory payments, which cause tax burden on the nationals' income. It clears up the mechanism of application of the tax social privilege as a tool to protect socially vulnerable sectors of population. It finds that social standards in Ukraine disregard macroeconomic tendencies developing for years. The emphasis is made on the necessity to differentiate value added tax rates and to harmonize the rates of other taxes not directly influencing personal income, which are dominant in Ukraine. It describes the approaches to implementation of reduced value added tax rates, tax social privilege in withholding taxes from personal income and review of the minimum subsistence level that shall facilitate increase in income of the disadvantaged population.