Kyiv, August 19, 2015. The state tax system model will be presented on September 3 at a meeting of the National Council of Reforms, said Olena Makeyeva, Deputy Minister of Finance of Ukraine, at a press briefing at Ukraine Crisis Media Center as a part of Ukraine Communications Taskforce project.
“As soon as the Minister of Finance presents the state tax system model, which we expect to happen late August, we will forget about all the unpleasant talks and will rejoice. It means we will get a transparent Internal Revenue Code with clear rules of the game and fairness between a taxpayer and a fiscal officer. Moreover, businesses will be able to pay taxes and will be incited to pay them in Ukraine,” said Makeyeva.
Further, Makeyeva emphasized that the Ministry of Finance remains indecisive regarding the model as discussions continue. In view of this, on August 17, the Ministry published a presentation on its official website titled, The Tax Reform: Not Only on Taxation Rates. According to Makeyeva, the Ministry of Finance attempted to solicit the business community’s opinion on a number of innovations.
“This presentation does not represent the tax reform model. We wanted to have a discussion with the public and businesses on what other important aspects of the tax system are to be changed. We have been speaking of the taxation rates recently, but have forgotten that tax reform is not just about tax rates. In discussing tax rates we omit the details,” explained Makeyeva.
The Deputy Minister said that the issue of combining unified social tax (UST) and personal income tax (PIT) is still open. According to Makeyeva, the ministry will decide within the week. As part of the reform, the ministry will simplify the tax system for entrepreneurs. The criteria qualifying taxpayers for one of three different types of taxable entities will remain unchanged. Changes will however take place in the sphere of value added tax (VAT). “There has already been an attempt to cancel zero taxation rates for land owners, but it failed. Nevertheless, we will go back to it. We aim at creating equal conditions for all the tax payers, for all of them are in equally difficult circumstances during the financial crisis,” said Makeyeva.
The deputy minister also said that the existing system of taxes on vehicles would be revised in accordance with the principle of social justice. “We suggest a new model of imposing a tax in the sum of 25,000 hryvnia on luxury cars or premium cars. The Cabinet of Ministers will pass a separate resolution on establishing this tax. The same principle exists in other European countries, and we are studying their experience at present. Other car owners must also pay personal property tax, but it should not exceed 1000 hryvnia,” explained Makeyeva.