Problems and ways of improving the management of tax expenditures in Ukraine in the context of the best management practices

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Abstract

For many years the widespread use of tax expenditures (TE) around the world and their impact on public finances has been a matter of concern for a number of stakeholders, including the International Monetary Fund (IMF), United Nations (UN), civil society organizations, intergovernmental organizations, and academia (United Nations Economic Commission for Africa [UNECA], 2023), prompting the search for ways to reduce the negative effects of their application. In this regard, it is of key importance to introduce a system of effective TE management. Given that the peculiarities of such management in different countries are not studied sufficiently, the purpose of the paper is to assess the status and identify the problems of TE management in Ukraine and ways to bring it closer to the best management practices. The criteria for such an assessment are the principles of good TE management formulated by researchers from international organizations. According to the results of the study, the peculiarities of the functioning of certain components of TE management in Ukraine that do not meet the principles of good management were identified. The authors make a general conclusion about the lack of comprehensive and effective TE management as a fiscal policy tool and suggest ways to improve the quality and transparency of TE management in line with the best management practices.

Keywords: Tax Expenditures Management, Tax Expenditure Reporting, Cost-Benefit Analysis, Implementation of Tax Expenditure Reports in the Budget Process

Authors’ individual contribution: Conceptualization — A.S. and L.R.; Methodology — A.S.; Writing — Original Draft — A.S.; Writing — Review & Editing — A.S. and L.R.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G18, H21, H24, H25, H30

Received: 20.08.2024
Revised: 11.12.2024; 28.01.2025; 14.07.2025
Accepted: 08.08.2025
Published online: 12.08.2025

How to cite this paper: Sokolovska, A., & Rainova, L. (2025). Problems and ways of improving the management of tax expenditures in Ukraine in the context of the best management practices. Journal of Governance & Regulation, 14(3), 128–137. https://doi.org/10.22495/jgrv14i3art12