IMPACT OF INVESTMENT AND TAXATION ECONOMY AND ON POVERTY AND INEQUALITY IN UKRAINE AND THE EUROPEAN COUNTRIES

Investing and taxation are powerful fiscal instruments which, if deployed properly, can influence economic growth and reduce poverty and inequality. Public investment in infrastructure helps to create new jobs, increase incomes, facilitate economic and social opportunities, and reduce poverty and social inequality. In addition to regulating the level of public investment, governments can affect the level of private investment by crafting appropriate tax policy. However, such fiscal policy can lead to stimulation or reduction of investments in the private sector. Therefore, in order to stimulate private investment, it is important to develop targeted investment programs, as well as tax incentives, focused on specific sectors or regions. A tax incentive is considered effective if the social benefits it generates offset associated social costs. Generally, indefinite and income-oriented tax incentives will lead to a reduction in the tax base and will jeopardize tax collection. Therefore, preference should be given to incentives that directly affect the cost of capital and increase the effectiveness of investing benefits, such as investment taxes. Notably, the level of infrastructure in Ukraine, both in general and in transport categories, is lower than the average of European countries, and the quality of Ukrainian roads is recognized among the worst. Taxation in Ukraine significantly reduces the incentive of the private sector to invest, although, over the past four years, Ukraine has made some progress in this area. In European countries, despite the fact that there has been a decline in infrastructure investment in recent years, tax incentive programs have been developed and implemented in many countries. Such measures have had a positive impact on economic growth, infrastructure levels, living standards and inequality.