Macro- and microeconomic aspects of tax capacity building

Subject. The article considers tax capacity as an element of the taxation system, formed at the level of the State and business entities, to balance their economic interests and optimize the tax system. Objectives. The aim is to explore essential aspects of the concept of "tax potential" of the State (region) and the business entity. Methods. The study employs methods of scientific cognition, like systems, structural, and comparative analysis, induction and deduction, synthesis. Results. We analyzed macro- and microeconomic concepts of tax potential formation and use of the State and business entities, underpinned the importance of implementing a tax policy based on the principle of reproduction of taxes and tax base, as a derivative of the result of organizing the movement of taxpayers' capital. The paper established that the economic interest in strengthening the taxable capacity of the subjects can be implemented not only within the State tax policy, but also on the part of the entity itself, from the standpoint of improving the policy of tax potential optimization. Conclusions. The paper offers a systems approach to the organization of tax relations from the perspective of balancing the economic interests of the State and business entities (taxpayers). The tax policy of the State in the interests of budgetary security of territories should provide for the execution of tax reproduction function, and business entities should optimize the tax potential on the basis of maximizing the added value and ensuring their economic security.