Рersonal income tax in world practice.

Abstract

In the current conditions of the integration movement of Ukraine to the European Union and the reform of the institutions of state power, the issue of studying foreign experience of the system of taxation of personal income is actualized. In the world practice of personal income taxation, PIT is seen as an important source of revenue and a tool for redistributing income between high-income and low-income categories of the population. Taxation of personal income in foreign countries has its own peculiarities. The same income in different countries can both be taxed and exempt. In developed countries, a progressive PIT tax system is an effective tool for generating fiscal revenues and addressing social inequality in society. Instead, third-world countries cannot make good use of this mechanism because of significant tax compliance issues. They apply a proportionate PIT tax system that minimizes the risks associated with tax evasion and enhances international competitiveness.