Fiscal policy of Ukraine in the context of attracting foreign direct investments: current trends and prospects

Introduction. Fiscal policy is one of the determinants of attracting foreign direct investment. Countries, competing for direct investment flows, use various fiscal policy instruments. However, in many cases they cannot compensate for certain shortcomings of the recipient country. The effectiveness of fiscal reforms can be levelled by various adverse factors of the external and internal environment. Such a situation has been observed in Ukraine over the past ten years: the beginning of the military conflict with Russia in early 2014, the Covid-19 pandemic, a full-scale war. In such conditions, the stimulating effect of fiscal policy is particularly important, which is aimed not only at stabilizing the country's financial system, but also at forming a favourable investment climate, both for domestic business entities and for existing and potential foreign investors. The purpose is to study the main trends in the formation of fiscal policy in an unstable internal and external environment, to identify those transformations that may further positively affect the process of attracting foreign direct investment. Methodology. To study the main trends in the field of fiscal policy and their possible impacts on the process of attracting foreign investment, the following methods of scientific analysis were applied: the method of theoretical analysis and generalization was used to review the research of domestic scientists on the impact of fiscal on the investment climate, approaches to interpreting the term “fiscal policy”, generalizations of the results of international reports, analytical reports of the Institute of Economic Research and Policy Consultations; the method of statistical analysis - to analyse the Tax Hell Index, the trend of attracting FDI; content analysis of regulatory documents - to describe individual provisions of the Tax Code of Ukraine, Laws of Ukraine № 2179, № 466-IХ, № 3177-IХ, cooperation programs with the OECD and the EU; comparative analysis - to assess the effectiveness of reforms through the components of the Doing Business rating; chronological (retrospective) analysis - to describe the evolution of Ukraine's fiscal policy from 2010 to 2023, identifying key stages of changes; event analysis, which made it possible to identify the main events in the field of taxation and their intensity for further identification of possible paths of evolution. Results. Fiscal policy plays an important role in the process of forming a favourable investment climate, as one of the key determinants of attracting foreign direct investment. In recent years, fiscal policy has been carried out in conditions of constant systemic transformations, which were caused by both external and internal challenges. The main trends in the field of fiscal policy transformation, which indirectly had an impact on attracting foreign direct investment, were: decentralization, combating tax evasion, improving tax administration. Despite significant progress in this area, which was highly appreciated by international and domestic analysts, it was not possible to achieve significant activation of foreign investors. This is primarily due to the unfavourable internal political and economic situation in the country. Further reforms of fiscal policy, taking into account the recommendations of international financial institutions, will contribute to the growth of foreign capital attraction for the post-war reconstruction of the country.