Fiscal Policy in the System of Financial and Economic Relations

The article is dedicated to the role and place of fiscal policy in the system of regulating socioeconomic development under modern conditions. The aim of writing the article is to reveal and deepen the theoretical and methodological foundations of implementing the tax component of fiscal policy in the system of financial and economic relations. Theoretical approaches to disclosing the categorical content of tax policy as a process of planning and collecting revenues for budgets of various levels through constant sources of tax revenues are generalized. A list of the main components of the mechanism of tax regulation of socioeconomic development is defined. The necessity of assessing the profile of the implemented financial regulatory policy, based on the compositional structure of the tax system and the level of fiscal burden, is emphasized. The significance of the levels of tax burden, defined as the share of the sum of tax revenues of the consolidated budget and social contributions in GDP, in the OECD member states during the period 2014–2023 is analyzed. It is been proved that excessive fiscal burden leads to a decrease in savings and investment rates, causing a capital outflow from the respective national economies. The necessity of optimizing the ratio of tax burden levels across groups of taxpayers-individuals and legal entities has been emphasized. Under the conditions of martial law, a category of tax security within the public finance system has been allocated, characterizing a certain configuration of the fiscal space where the State’s financial demands are balanced with the interests of taxpayers in the short, medium, and long term. It is underscored that the level of fiscal burden is significant but not an ultimate criterion for assessing the profile of the tax policy implemented by the government. The fundamental importance of dividing the fiscal policy instruments in terms of their impact on the dynamics of economic growth processes has been underlined. It is indicated that tax policy should meet the principles of fiscal sufficiency, social justice, adaptability, economic efficiency and fairness, stability, and neutrality.