Reforming Taxation in Ukraine in the Context of Human Capital Development: The Experience of France and the United Kingdom

Abstract

The aim of the article is to assess the impact of the tax systems of the United Kingdom and France on human capital development and demographic sustainability, and to determine which elements of these systems could be effectively adapted to the Ukrainian context in conditions of demographic decline and post-war recovery. The study applies comparative analysis, structural-logical synthesis, socio-economic interpretation, and quantitative modeling of tax burdens for different household types. The research is based on legislative frameworks, official tax guidelines, academic studies, and analytical materials published by British and French governmental institutions.

The results show that the UK tax model is built on a progressive income tax scale supplemented by a system of social transfers (Child Benefit, Tax-Free Childcare, Universal Credit), which ensures moderate redistribution and targeted support for families with children. In contrast, the French model is strongly social-oriented due to the use of the family quotient system (quotient familial), which adjusts tax liability based on family size and composition. Applied calculations demonstrate that households with identical incomes but different numbers of children face dramatically different tax burdens, highlighting the system’s effectiveness in stimulating fertility, reducing child poverty, and strengthening long-term human capital formation.

The study concludes that Ukraine’s current flat tax system does not adequately reflect taxpayers’ financial capacities and fails to provide sufficient incentives for supporting families with children. It is argued that Ukraine would benefit from introducing progressive income tax mechanisms, expanding tax allowances for dependents, and adapting the French family quotient, including increasing coefficients for children in large families. These reforms could contribute to reducing social inequality, improving demographic indicators, reinforcing human capital development, and enhancing demographic resilience in the long term.