Modelling the Relationship Between Economic Development and Tax Competitiveness: An Eu-Informed Framework for Ukraine’s Fiscal Model

This article examines how economic development levels relate to national tax competitiveness within the European Union, offering an empirical basis to guide Ukraine's fiscal policy as it seeks closer EU integration.While the link between tax policy and growth has been widely discussed, clear cross-country evidence for how income disparities align with the competitiveness of corporate and individual tax systems remains limited.The study's objective is to quantify this relationship to support the development of a balanced fiscal framework that avoids over-reliance on low tax rates alone.The research draws on Eurostat GDP per capita figures and the 2024 European Tax Policy Scorecard rankings for corporate and individual taxes across all 27 EU member states.Spearman's rank correlation was applied to test whether statistically significant monotonic relationships exist between a country's GDP per capita rank and its tax competitiveness rank.The results reveal a clear and statistically significant inverse correlation: higherincome EU member states consistently rank lower in tax competitiveness indices, with Spearman's rho values of -0.446 for corporate taxes and -0.678 for individual income taxes.This confirms that more developed economies, such as Luxembourg and Denmark, pair high GDP levels with progressive tax regimes to fund welfare systems, while less affluent members like Bulgaria, Latvia, and Estonia rely on more competitive tax structures to attract investment and offset structural gaps.The study is based on a single year's comparative snapshot and does not incorporate dynamic scenario modelling or test sensitivity to policy shocks.Addressing