The goal of the work is to develop scientifically theoretical principles about taxation and give recommendation for improvement of tax system. The main tasks of the work are: 1) to make scientifically economical research of taxation system in Latvia and EU, to estimate existing problems and disadvantages; 2) to research how various tax rates influence the taxable object; 3) to research the influence of the taxes on enterprises activity and to estimate the rate of the taxes that they stimulated activity of local enterprises and what practice changes necessary to introduce in the taxation system; 4) to estimate tax burden on persons with different incomes and to develop practical offers about improvement of taxation system, that all tax payers have identical tax burden and to determine, which particular changes are necessary for this purpose; 5) to research dynamics of tax revenue, as the various factors influence tax revenue using various kinds of modelling of economical process, to predict how the result changes the situation; 6) to develop way of improvement of taxation system, that it corresponds to the requirements of EU and that it functions in situation when there are no borders between memberstates; 7) to develop way of improvement of taxation system, which the limits evasion of taxation and improves taxation process and tax administration system.