Tax Reforms in Ukraine and Georgia: Changing Priorities

Givi Bedianashvili, Yuriy B. Ivanov, Tetiana V. Paientko


The Georgian and Ukrainian tax systems both emerged after the collapse of the USSR, yet the tax reforms in the two countries pursued different trajectories and produced different outcomes. The article systematizes and compares the results of the tax reforms in Ukraine and Georgia. The study applies qualitative methods for historical analysis, for periodization of the reforms and for classifying their key priorities and the factors that influenced them. Quantitative methods are applied to compare the tax burden in Ukraine, Georgia and OECD countries. The success and failure of the tax reforms was measured by the index of economic freedom (including its component – the index of tax burden). The first hypothesis suggested that a reduction in the tax burden had a positive impact on the indicators of economic freedom; the second hypothesis stated that a reduction in the tax burden affected fiscal freedom but did not affect the index of economic freedom. Regression dependences of the average tax burden (including the tax burden resulting from social security contributions) and the index of economic freedom (including the index of tax burden) were built in the R environment. The regression analysis confirmed the first hypothesis for Ukraine and the second, for Georgia. This result can be explained by the fact that, unlike Ukraine, the Georgian tax reforms focused on institutional changes, which determined their success. In 1996–2018, Georgia rose in the ranking of economic freedom and joined the group of economically free countries. Moreover, this country has been steadily improving its position in the ranking. Ukraine, on the contrary, has remained in the group of economically unfree countries. Due to the unbalanced reforms and insufficient structural changes, the country’s government failed to ensure the desired effect from the tax burden reduction.

For citation

Bedianashvili G., Ivanov Yu. B., Paientko T. V. Tax Reforms in Ukraine and Georgia: Changing Priorities. Journal of Tax Reform. 2019;5(2):107–128. DOI: 10.15826/jtr.2019.5.2.063

Article info

Received June 25, 2019; accepted July 27, 2019


tax, tax reform, tax-to-GDP ratio, tax burden, index of economic freedom


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