The Impact of Excise Taxation on Gasoline on Fiscal Revenues and Economic Activity: Assessment Using the Laffer Curve and European Union Practices

Abstract

The purpose of the study is to assess the impact of excise taxation on gasoline on fiscal revenues and economic activity in the context of Ukraine’s economic transformation, as well as to analyze the possibilities of applying the Laffer curve concept to determine the optimal level of tax rates. The study uses a set of economic and statistical analysis methods to determine the dependence of budget revenues on excise rates, a comparative analysis of the structure of tax systems in European Union (EU) countries, and an assessment of the elasticity of demand for gasoline. Data from the State Tax Service of Ukraine and public EU statistical sources on excise duties and fuel consumption were used. The results of the study show that there is a clear dependence between the level of excise taxes and budget revenues, which confirms the feasibility of applying the Laffer curve in the field of gasoline taxation. Raising excise rates to a certain level can increase budget revenues without significantly reducing consumption, while exceeding the optimal threshold leads to a decrease in revenues and stimulates the growth of the shadow fuel market. A comparison with the practices of EU countries shows that European states apply a comprehensive approach, combining fiscal incentives with consumer behavior regulation and support for alternative modes of transport, which ensures stable tax revenues and socio-economic efficiency. The conclusions indicate that adapting elements of European experience to Ukrainian conditions can increase the effectiveness of tax policy by balancing the fiscal needs of the state, the economic activity of the population, and environmental priorities. The results obtained are of practical importance for the formation of strategies for state regulation of excise taxation, forecasting budget revenues, and assessing the socio-economic consequences of tax decisions.